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Max Contract Scenarios For Kevin Durant

Kevin Durant today denied that he’s given thought to signing a two-year deal with a player option when he hits free agency this summer. It’s a contractual strategy that LeBron James has pursued the last two years to provide for the most flexibility and money possible, and given the rapid escalation in the salary cap that’s about to take place and Durant’s relative youth, it would be an even smarter idea for him than it would be for LeBron.

First, let’s look at what Durant would make if he signs a five-year, maximum-salary contract with the Thunder, based on the NBA’s maximum-salary projections:

  • 2016/17: $24,900,000
  • 2017/18: $26,767,500
  • 2018/19: $28,635,000
  • 2019/20: $30,502,500
  • 2020/21: $32,370,000
  • Total: $143,175,000

He’d see slightly less if he signed a max deal for as many years as he could with another team. Only the Thunder can give him a fifth year, and everyone else is limited to offering 4.5% raises instead of 7.5% raises. Again, the figures here rely on the league’s projection for next year’s maximum salaries.

  • 2016/17: $24,900,000
  • 2017/18: $26,020,500
  • 2018/19: $27,141,000
  • 2019/20: $28,261,500
  • Total: $106,323,000

Signing a two-year deal with a player option after the first season would take him down a more lucrative path, assuming the NBA and the players union don’t significantly alter maximum salaries or contract parameters when they negotiate the next collective bargaining agreement, which will likely kick in for the 2017/18 season. It’s a distinct possibility that they will indeed make changes, as Bobby Marks of The Vertical on Yahoo Sports notes (Twitter link). So, uncertainty exists, but the existing structure makes the short-term deal an intriguing option.

We haven’t seen maximum-salary projections for 2017 yet, but the salary cap is projected to hit a whopping $108MM that summer, a drastic escalation not just from the $70MM cap for this season but also from next season’s projected $89MM cap. The sizes of maximum salaries are tied, though indirectly, to the size of the cap, so using the $108MM projection, it’s possible to estimate how much Durant’s max will be.

The NBA has three different maximum-salary tiers. Players with six or fewer years of experience see a max of roughly 25% of the cap. Those with seven, eight or nine years of experience are eligible for approximately 30% of the cap. And veterans of 10 or more seasons can get as much as about 35% of the cap. Durant is in his ninth season, so he’ll fall into the 30% tier for his free agency this year. That’s reflected in the $24.9MM figure used in the scenarios above. He’d fall into the 35% category after one more season, taking his starting salary in a contract he’d sign in 2017 even higher. I estimated for an earlier piece that the 35% maximum salary for 2017/18 will be $35.603MM, based on the league’s projections and formula for determining max salaries, which Larry Coon explains at the bottom of question No. 16 in his Salary Cap FAQ.

So, with that number in mind, and assuming the next collective bargaining agreement doesn’t bring about drastic change, here’s what Durant could get if he signs a deal with the Thunder this summer that allows him to opt out next year and re-signs on a five-year max deal in 2017:

  • 2016/17: $24,900,000
  • 2017/18: $35,603,000
  • 2018/19: $38,273,225
  • 2019/20: $40,943,450
  • 2020/21: $43,613,675
  • 2021/22: $46,283,900
  • Total: $229,617,250

Durant wouldn’t have the advantage of signing a five-year deal with higher raises with a team other than the Thunder in 2017, even if he signs with that non-OKC team this summer. That’s because he’d need to have been with that team for at least three seasons to accrue full Bird rights. So, here’s what Durant would get if he signs a max deal in 2017 outside of Oklahoma City:

  • 2016/17: $24,900,000
  • 2017/18: $35,603,000
  • 2018/19: $37,205,135
  • 2019/20: $38,807,270
  • 2020/21: $40,409,405
  • Total: $176,924,810

That would give Durant close to $37MM more than he would make over the same five-year period if he simply re-signed for five years at the max with Oklahoma City, even though the Thunder can pay him more than anyone else on a long-term deal this summer. That’s why it would behoove Durant to at least consider the option of signing a short-term deal this year, even given the uncertainty of collective bargaining agreement negotiations ahead. For all we know, the environment for max players could be better under the next labor deal than it is under this one, and with LeBron and Chris Paul, both of whom are currently on max deals, playing prominent roles in the union, that’s certainly not out of question.

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One thought on “Max Contract Scenarios For Kevin Durant

  1. Very likely he signs 2 year extension (player option 2nd year) instead of 5 year max next season, regardless of what team he signs with. Will make the same salary in 2016 regardless of where he signs. Once the salary cap bumps to $109,000,000 in 2017 he will decline the player option and sign 5 year max extension at 35% of cap. So the true difference from signing with Thunder or any other team is only $13,000,000ish over 6 years (according to 2017 salary cap projections), which means leaving OKC could be more likely than we think.

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