Report: Raptors signing Norman Powell to four-year, $42 million contract extension

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The new Collective Bargaining Agreement allows extensions to start at 120% the estimated average salary and be added to three-year contracts after two years.

The Heat used the new mechanisms to extend Josh Richardson, and now the Raptors are following suit with another 2015 second-rounder who initially signed a three-year contract – Norman Powell.

Adrian Wojnarowski of ESPN:

Toronto Raptors guard Norman Powell has agreed to a four-year, $42 million contract extension, league sources told ESPN on Thursday.

The deal, which starts with the 2018-’19 season, includes a player option on the fourth year, league sources said.

Powell will earn the minimum ($1,471,382) this season, then his extension will kick in for 2018-19. I presume he got the same amount as Richardson, the maximum allowable $42,166,656 with a starting salary of $9,412,200.

There’s a decent chance Powell could have gotten more in restricted free agency next summer, and I bet, if he were free to negotiate any extension, he could have even gotten more now. But so much guaranteed money is difficult to pass up for someone who has earned barely more than minimum salaries so far.

The Raptors capitalize by locking up the 24-year-old for the next three years at a value salary. Powell might even start at small forward this year. If not, he’ll be a top reserve. Players like that typically get more money.