It’s crunch time for Tristan Thompson. Training camp starts in less than two weeks, and October 1st is the last day for Thompson to accept his qualifying offer from the Cavaliers. The Rich Paul client could let that date pass and continue to be a restricted free agent, but it seems much more likely that a resolution of some sort will come before then.
The former No. 4 overall pick is not without attractive choices. The Cavaliers have apparently been willing to give him $80MM over five years since his free agency began July 1st, but Thompson believes he can do better. He’s reportedly prepared to sign the qualifying offer if the Cavs don’t deliver a max deal, and Paul has said that if Thompson does take that qualifying offer, which would set him up for unrestricted free agency next summer, the power forward wouldn’t re-sign with the Cavs in 2016. Paul, who just watched client Norris Cole sign his qualifying offer from the Pelicans, apparently believes Thompson can receive a max deal from his hometown Raptors next summer, while another report indicated that Paul has three teams willing to pay him the max if he hits the open market next year.
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Normally, the qualifying offer would entail a financial sacrifice that wouldn’t make sense for a top free agent. However, the spike in the salary cap projected for 2016/17 changes the equation for Thompson. Here’s what a five-year, $80MM contract, like the one the Cavs are apparently offering to Thompson, might look like:
Five-year, $80MM contract
Here’s what Thompson would make if the Cavs relented and gave him a max deal this year:
Max contract this year from Cavs
Now, here’s what Thompson would get if he signed his qualifying offer and followed it up by signing a max deal with another team next summer, assuming the NBA’s 2016/17 maximum salary for a player with Thompson’s level of experience comes in at the projected $20.4MM:
Qualifying offer, then leave for max deal
2016/17: $20,400,000 (figure based on projection)
2017/18: $21,318,000 (figure based on projection)
2018/19: $22,236,000 (figure based on projection)
2019/20: $23,154,000 (figure based on projection)
Total: $93,885,589 (figure based on projection)
As you can see, the totals in those last two scenarios are pretty close. So, if the Cavs believe that Thompson can indeed score a max deal elsewhere this summer, they’d have reason to exceed $80MM in their offer.
Let’s look at a couple of other scenarios that could come into play. The Trail Blazers are the only team with enough cap flexibility as of now to sign Thompson to a max offer sheet. It seems unlikely, but Portland signed Enes Kanter to a max offer sheet earlier this summer before the Thunder matched, so we can’t entirely discount the idea. Here’s what Thompson would make on that:
Max offer sheet
(Estimated 2019/20 max: $28,822,000)
I added an estimate for the 2019/20 max for which Thompson would be eligible, for comparison’s sake, since an offer sheet could only extend for four years while a deal with the Cavs could run for five. If Thompson can get a max deal in 2019, the offer sheet would be more lucrative for him in the long run, though it’s difficult to project four years into the future.
Qualifying offer, then re-sign with Cavs
2016/17: $20,400,000 (figure based on projection)
2017/18: $21,930,000 (figure based on projection)
2018/19: $23,460,000 (figure based on projection)
2019/20: $24,990,000 (figure based on projection)
2020/21: $26,520,000 (figure based on projection)
Total: $124,077,589 (figure based on projection)
Finally, perhaps the most lucrative hypothetical involved would be one that Paul has said Thompson won’t consider. That would entail him playing on his qualifying offer this season and re-signing with the Cavs next summer. He would be able to take advantage of a surging salary cap to make a projected amount of more than $124MM over six years. The first five years of that scenario would add up to $97,557,589, greater than $3MM more than he would get if he simply signed a five-year, maximum-salary contract with the Cavs this summer.
Of course, that doesn’t take into consideration the estimated 2020/21 max of $30.235MM that Thompson could get if he signed a five-year deal with the Cavs this year. So, let’s say that Thompson signs in the next couple of weeks for five years at the max and comes up with another max deal when he hits free agency again in 2020. He’d make an estimated $124,578,125 over the next six seasons, roughly $500K more than he would make in that same period if he signed his qualifying offer and took the projected five-year max from the Cavs next year.
Still, the difference is miniscule enough to suggest that all the hand-wringing over the past two and a half months has been for little reason. Of course, the caveat is Cleveland’s willingness to do the max at any point. If the Cavs aren’t willing to pay Thompson the max now, it’s reasonable to assume they won’t be willing to do so next summer, especially when the max would entail a starting salary of about $4MM more. The luxury tax threshold is projected to be much higher for 2016/17, so that would alleviate some concern for Cleveland, but with a new contract for Timofey Mozgov due a year from now, and LeBron James poised to score yet another more lucrative max deal of his own, the payroll headaches figure to remain.
So, much of it largely comes down to the willingness of both sides to bet on whether Thompson can command the max from one team or another next year. Thompson and Paul seem ready to wager that he will. Soon, we’ll see if the Cavs follow suit.
Which of these scenarios above do you think is the most likely outcome? Leave a comment to share your thoughts.