Re-Examining Stephen Curry’s Extension

Last October, on the final day before 2012's extension deadline, the Warriors and Stephen Curry reached an agreement on a four-year, $44MM deal. As we watch Curry put up one memorable postseason performance after another for the Warriors this spring, it's easy to forget, but at the time the move was viewed as a significant risk for Golden State. Curry was coming off an injury-plagued 2011/12 season and had just reinjured his ankle during camp.

Six months later, it's not as if the Warriors are entirely in the clear, considering the extension hasn't even officially kicked in yet. But if Curry's long-term contract was a high-risk, high-reward move for Golden State, the team is certainly reaping the rewards at the moment.

Earlier today at, Tom Ziller noted that the Warriors saved themselves a significant amount of money by extending Curry when they did. Let's take Ziller's point one step further and take a closer look at exactly how much money the Warriors may have saved, and how the decision to get something done last fall affected Curry's potential free agency and Golden State's long-term cap situation.

First, here's how Curry's actual extension breaks down:


It's safe to assume that if Curry had reached restricted free agency this summer, he would have received at least one maximum-salary offer. The Warriors could have offered Curry a five-year max with 7.5% raises, or matched a four-year max (4.5% raises) offer sheet from a rival team. We won't know the exact amount of next year's maximum salaries until July, but we should be able to make a decent guess. A year ago, maximum salaries for players with 1-6 years of experience increased by 5.77%. If they increase by the same rate this year, these would have been the potential max scenarios for Curry:


For our hypothetical scenario, let's say the Warriors, having been reluctant to extend Curry last fall because of knee troubles, were once again reluctant to commit huge money to him for five years and simply matched a four-year offer sheet from a rival club. That would still put Curry on the books for about $61.74MM over the next four seasons, rather than $44MM. That's an increase of between $4-5MM in annual salary for every season between now and 2016/17.

Would that $4-5MM have made much difference for the Warriors? By '16/17, maybe not, but in the short-term, it would have had a huge impact on the team's cap situation. Assuming Richard Jefferson, Andris Biedrins, and Brandon Rush exercise their player options for next season, the Warriors already have about $69MM committed to guaranteed salaries for 10 players. That doesn't leave much wiggle room below the tax line for the club to bring back Jarrett Jack or Carl Landry, or to add further reinforcements.

Now imagine if the team had to pay Curry a max salary of more than $14MM next season. That would put the Warriors' salary commitments over $73MM, meaning the club would already be in tax territory before even filling out the rest of its roster. Deadline deals this past year allowed the Warriors to avoid being a 2012/13 taxpayer, but barring a more significant trade, they won't be as fortunate in '13/14. Paying the max to Curry would have pushed the club even further into the tax, in a season when CBA changes ensure that tax penalties will become even more punitive.

The Warriors haven't always made the smartest roster decisions — the presence of Biedrins and Jefferson on next year's books is proof of that. But extending Curry when they did looks like a stroke of genius at this point. Not only is the fourth-year guard shooting the Warriors into legit contention in the Western Conference, but his affordable salary next season and beyond should significantly reduce Golden State's tax bill and allow for additional cap flexibility down the road.

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