NBA Extensions May Have Reached A Tipping Point – Forbes

ATLANTA, GEORGIA - JUNE 18: Kevin Huerter #3 of the Atlanta Hawks reacts with Trae Young #11 after ... [+] hitting a three-point basket against the Philadelphia 76ers during the second half of game 6 of the Eastern Conference Semifinals at State Farm Arena on June 18, 2021 in Atlanta, Georgia. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Kevin C. Cox/Getty Images)

A record 11 members of the 2018 NBA draft class signed extensions before last Monday's rookie-scale extension deadline, and they weren't the only ones to secure their financial future. Veterans such as Jonas Valanciunas and Malcolm Brogdon and recent second-round picks Terance Mann and Daniel Gafford also inked new deals with their respective teams.

In total, 25 players signed extensions this offseason, according to ESPN's Bobby Marks, 24 of whom would have otherwise become free agents next summer. It's part of a sea change that's having devastating ramifications for teams pinning their hopes to free agency.

With so many players preemptively taking themselves off the free-agent market, next year's class looks increasingly bleak outside of Bradley Beal, Zach LaVine and Deandre Ayton. Since roster construction is a multi-year process, teams need to be asking themselves whether this is a short-term blip or a long-term trend to plan around.

There's reason to think it may be the latter. With the NBA's salary cap soaring to unprecedented heights, superstars aren't the only ones being presented with life-changing contract offers.

Consider this: Over the first 12 years of Michael Jordan's career, he earned a combined $28.4 million. Mann, who averaged 7.0 points in only 18.9 minutes per game with the Los Angeles Clippers last year, signed a two-year, $22 million extension earlier this month.

Atlanta Hawks guard Kevin Huerter, who agreed to a four-year, $65 million extension prior to the deadline, explained why he didn't hold out for more.

"The NBA does a good job of making $100 million seem like not a lot of money," he said after signing his extension, per Chris Kirschner of The Athletic. "To the rest of the world, my friends, my peers, my family, even $1 million is a lot of money. I tried to keep that in perspective throughout the whole thing. It's life-changing money."

For players such as Huerter and Mann, staying put on a title hopeful for $10-15 million annually may beat the allure of testing free agency. Even though they might be able to find a higher offer elsewhereparticularly given the depleted state of the 2022 free-agent classthose teams would likely be further away from legitimate title contention.

A few recent cautionary tales may also cause would-be free-agents to think twice about turning down big-money extension offers.

Back in 2017, the Dallas Mavericks offered Nerlens Noel a four-year, $70 million extension on the first day of free agency, according to ESPN's Adrian Wojnarowski. He turned it down in the hope of landing a bigger offer elsewhere, but he wound up signing his one-year, $4.1 million qualifying offer with Dallas.

Noel proceeded to sign one-year minimum deals with the Oklahoma City Thunder in each of the ensuing two offseasons. He signed a one-year, $5 million contract with the New York Knicks last summer and a three-year, $27.7 million deal this past offseason, but he still has yet to recoup all the money he passed up four years ago.

Dennis Schroder likewise gambled on himself earlier this year, and it similarly backfired.

The Los Angeles Lakers reportedly offered Schroder a four-year, $84 million extension at some point last season, according to ESPN's Brian Windhorst (h/t Dan Feldman of NBC Sports). He turned that down, as he reportedly wanted somewhere between $100-120 million, according to Armin Andres, the vice president of the German Basketball Federation (h/t Kurt Helin of NBC Sports).

That nine-figure offer never materialized for Schroder in free agency. Instead, he wound up settling for a one-year, $5.9 million deal with the Boston Celtics, although he at least had a good sense of humor about it.

Beyond the risk of cap space drying up in free agency, players also must weigh the risk of injuries affecting their earning potential. Isaiah Thomas and DeMarcus Cousins both looked like locks to receive max deals as recently as the 2016-17 season, but career-altering injuries wound up costing them hundreds of millions of dollars.

Between those cautionary tales and the rapidly rising salary cap, more players may become amenable to signing extensions instead of testing free agency. That could also behoove teams, as they'll be able to construct clearer long-term plans beyond "pray for a miracle in free agency and/or the draft."

Teams should be increasingly willing to offer extensions with the uncertainty of a new collective bargaining agreement and new national television contracts hanging over the league. With the cap likely to soar even higher once the new TV deals begin in 2025-26, any long-term deal signed in the next few years could look like a discount by the latter half of the decade.

The Phoenix Suns seemingly took that approach when they signed Mikal Bridges (four years, $90 million) and Landry Shamet (four years, $43 million) to extensions ahead of the rookie-scale deadline. Fresh off a run to the NBA Finals and with the sixth-best title odds this year, per FanDuel Sportsbook, they bet on continuity helping them to build upon their surprising success this year.

Every front office will be navigating these murky waters for the next few years until the new CBA and TV contracts kick in. It's impossible to know what the league's landscape will look like by the middle of the decade, or howif at allthe new CBA will address extension rules and/or the possibility of cap-smoothing to avoid a huge one-year cap spike. Signing players to long-term deals now can help mitigate those question marks.

We might not see quite as many fireworks during next years rookie-scale extension deadline. Outside of the top few picks, the 2019 draft class doesn't have as many clear-cut extension candidates as the 2018 draft class did.

But if Brogdon, Valanciunas, Terry Rozier and Julius Randle were any indication this offseason, don't be surprised if a number of veterans also wind up signing extensions over the next 12 months rather than test free agency in 2023.

Unless otherwise noted, all stats viaNBA.com, PBPStats, Cleaning the GlassorBasketball Reference. All salary information via Spotrac.

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NBA Extensions May Have Reached A Tipping Point - Forbes