Davis’ representatives surely know how close they can get to supermax money by cycling through short-term deals until Davis locks in the largest long-term contract — a strategy interested teams expect Davis to follow, sources say.
Consider this another signal Davis will leave New Orleans. There’s little point going this route if staying.
A designated veteran player can sign for up to 35% of the salary cap in his ninth and 10th seasons. A player with that level of experience can usually get just 30% of the cap. Players who’ve completed 10 seasons can get 35% of the cap, anyway.
So, this is about the two seasons following Davis’ current contract. After those, he’d be eligible for 35% of the cap, regardless.
If Davis wants a super-max salary, he’d either have to sign a five-year extension with the Pelicans next offseason or re-sign with them after his current contract ends in 2020. If he re-signs with New Orleans rather than staying through an extension, he could ink a shorter deal while still getting the super-max salary. But if he’s already getting 35%, why not just lock into a long-term deal in the first place? Especially because the Pelicans might not want to risk keeping him until 2020 free agency if he rejects the supermax next offseason.
The plan makes much more sense if Davis leaves New Orleans. Then, he can earn about 30% of the salary cap for two years then sign for 35% as soon as he’s eligible with 10 years of experience. If he locked in for longer elsewhere, his salary would be stuck with raises based on the 30%.
Still, this would probably mean leaving money on the table. Davis’ max with another team projects to be about $12 million shy of his super-max over the two seasons following his current contract. After that, Davis could re-sign with his new team in 2022 for something like five years, $277 million.* That’d certainly top the projected five-year, $240 million super-max Davis could sign this offseason – by enough to make up for the lost $12 million.
But Davis would be 33 or 34 when that deal ends (depending whether he exercises his sure-to-be-included player option). He’d be just 31 or 32 when a super-max extension signed this offseason would end. Who knows where Davis and the salary cap will be at either point? But Davis reentering free agency in his early 30s sure seems safer than reentering in his mid 30s.
*If he gets to a new team via trade. Then, that team would have his full Bird Rights. If he gets to that team via free agency, he’d need to play three seasons with that team to establish full Bird Rights. Otherwise, his long-term contract would be capped at four years.
This situation differs significantly from LeBron James (who shares an agent, Rich Paul, with Davis) signing short contracts. LeBron did it just before the salary cap was set to skyrocket with new national TV contracts. That ensured he’d get larger annual raises by repeatedly re-signing for a percentage of the new salary cap, which increased 11% and 34% after each of his first two seasons back with the Cavaliers. Raises within a player’s existing contract are generally capped at 5% or 8%, depending on contract type. From last season to this season, the salary cap increased 3%. In the next two seasons, it’s projected to rise 7% and 8%. So, with the salary cap stabilizing, Davis likely won’t get a similar windfall by repeatedly reentering the market.
He’d just ensure the ability to sign for 35% as soon as possible with a new team. If he wanted the 35% as quickly as possible in New Orleans, he wouldn’t have to wait beyond this offseason. The extra contortions suggest he’s leaving.