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The Rarity Of Team Options

People around the NBA often use the term “team option” in reference to a year that’s covered by non-guaranteed salary, but there are key differences. Front offices have to make decisions on a team option for a season before the July 1st preceding that season, but they can wait until opening night to make a decision on a player with a non-guaranteed season without having to shell out any salary, and until the leaguewide guarantee date in January without having to pony up the full salary. Partial guarantees mitigate this advantage to some degree, and contracts often have specific dates well in advance of the leaguewide guarantee date that specify a full or partial amount must be paid to the player if he remains under contract. Still, those deals are almost always more flexible than team options, which helps explains why team options are as rare as they are.

All rookie scale contracts, by rule, include two team options for the final season, and the decision on each is due a year ahead of time. Only five non-rookie scale contracts include team options for next season. A few more are on the books for 2016/17 and 2017/18. Some of them involve salary that’s non-guaranteed as well, since the collective bargaining agreement allows team option years to remain non-guaranteed even after the option is exercised. Thus, some executives have found value in signing second-round picks and undrafted rookies to four-year deals that include dual team options and non-guaranteed salary for the fourth year. That gives teams the choice of making the player a restricted free agent after year three or an unrestricted free agent after year four, as I examined a while back. That strategy backfired this past summer for the Rockets, who declined their team option on Chandler Parsons to make him a restricted free agent only to watch him sign an offer sheet for nearly the maximum salary.

Still, others, most notably the Sixers and GM Sam Hinkie, continue to sign similar deals. And occasionally, front offices will consent to team options for veteran talent, perhaps because their agents push to avoid the threat of a release without pay hanging over their clients for months. Perhaps that’s why Michael Beasley emerged with a team option on his multiyear deal with the Heat, as Eric Pincus of Basketball Insiders reported last week.

Here’s a look at the five players with team options for next season, in descending order of value.

And here are those with team options for future seasons, in descending order of value:

The Basketball Insiders salary pages and RealGM were used in the creation of this post.

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