Hoops Rumors Glossary: Poison Pill Provision
The poison pill provision isn’t technically a term that is defined in the NBA’s Collective Bargaining Agreement. However, the concept of a “poison pill” has colloquially come to refer to a pair of NBA concepts.
The first of those concepts relates to the Gilbert Arenas Provision, which we’ve explained in a separate glossary entry. When a team uses the Arenas provision to sign a restricted free agent to an offer sheet, that team can include a massive third-year raise that is often referred to as a “poison pill.”
No current NBA contracts fit this bill, but the one Tyler Johnson signed in 2016 did — the Nets included a third-year raise in that four-year offer sheet. After the Heat matched, they had to deal with Johnson’s cap hit jumping from $5.88MM in the second year of his contract to $19.45MM in the third year.
However, the concept we’re focusing on today doesn’t involve Johnson, the Arenas provision, or RFA offer sheets. Instead, this second meaning of the “poison pill” relates to players who recently signed rookie scale extensions, something 10 players did in 2020.
The “poison pill provision” arises if a team extends a player’s rookie scale contract, then trades him before the extension officially takes effect. It’s not a situation that arises often, but it features its own set of rules, since extensions following rookie contracts often create a large gap between a player’s current and future salaries.
For salary-matching purposes, if a player is traded between the time his rookie contract is extended and the start of the following league year (when that extension takes effect), the player’s incoming value for the receiving team is the average of his current-year salary and the annual salary in each year of his extension. His current team, on the other hand, simply treats his current-year salary as the outgoing figure for matching purposes.
Let’s use Kyle Kuzma as an example. Kuzma signed a three-year, $39MM rookie scale extension with the Lakers this year, which locks him up through the 2023/24 season, assuming he picks up his final-year player option. However, he’s only on the books for $3,562,178 in 2018/19.
If the Lakers sought to trade Kuzma this season, the poison pill provision would complicate their efforts. From Los Angeles’ perspective, Kuzma’s current-year cap hit ($3,562,178) would represent his outgoing salary for matching purposes. However, any team acquiring Kuzma would have to view his incoming value as $10,640,545 — that’s the annual average of the four years and $42,562,178 he has left when accounting for both his new and old contracts.
As we explain in our glossary entry on the traded player exception, NBA rules dictate that over-the-cap teams must send and receive approximately the same amount of salary in any trade. So applying the poison pill provision to a player like Kuzma and creating a $7MM+ discrepancy between how two trade partners account for him would make salary-matching much more difficult than usual, especially since so many teams this season are hovering around the luxury-tax and hard-cap thresholds.
Trades involving a player who recently signed a rookie scale extension are already rare. After all, those players are generally young, and a player who signed an extension is promising enough to have warranted a long-term investment. Those aren’t the type of players that teams typically move, so it’s not as if guys like Jayson Tatum, Donovan Mitchell, Bam Adebayo, and De’Aaron Fox would be trade candidates this season anyway.
The poison poll provision further disincentivizes a deal involving one of those recently-extended players by complicating salary-matching rules, making those trades even rarer. In other words, even the players who could theoretically be available just months after signing rookie scale extensions, such as Kuzma or Clippers sharpshooter Luke Kennard, are unlikely to be dealt this season.
Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.
Earlier versions of this post was published in 2012 and 2018. Photo courtesy of USA Today Sports Images.
Southeast Notes: Heat, Gay, Anthony, Zeller, Wizards
The Heat made their deal for Trevor Ariza with over a week to go until the March 25 trade deadline. One reason for Miami’s willingness to act early was the team’s inability to find common ground with the Spurs or Rockets on trade compensation for Rudy Gay or P.J. Tucker, a source tells Barry Jackson of The Miami Herald.
Gay and Tucker had been previously mentioned as potential Heat targets, and Gay was the preferred choice for some of those within the organization, according to Jackson. However, the Spurs’ asking price was deemed too high for Miami’s liking — the two teams also made no progress in talks for LaMarcus Aldridge, Jackson adds.
Here’s more from around the Southeast:
- Magic rookie Cole Anthony, who has been sidelined since February 9 due to shoulder and rib injuries, isn’t close to returning, head coach Steve Clifford said this week, per Roy Parry of The Orlando Sentinel. “He was on the court yesterday for the first time just doing some light shooting,” Clifford said on Wednesday. “Let’s put it this way: It’s more than days, it’s weeks before –– and I shouldn’t even say –– I don’t know exactly, but it’s not that close is the feedback (from the training staff).”
- After starting Thursday night’s game vs. the Lakers, Hornets center Cody Zeller didn’t play at all in the second half, writes Rick Bonnell of The Charlotte Observer. Zeller’s role is worth watching with the trade deadline around the corner — if Charlotte makes a move, it could involve the center position and Zeller’s $15.4MM expiring contract.
- Fred Katz and John Hollinger of The Athletic teamed up to break down some hypothetical trade deadline deals involving the Wizards, including swaps that would send players such as George Hill, Spencer Dinwiddie, and Wayne Ellington to D.C.
Central Notes: Tucker, Markkanen, Pacers, Lee
The Bucks took strides to improve their hoped-for playoff readiness in trading for a package headlined by defensive ace P.J. Tucker. Jonathan Tjarks of The Ringer posits that the Bucks should remain aggressive in looking to shore up their depth with further trades and potential buyout targets.
Tjarks wonders if Tucker, who will be an unrestricted free agent this summer at age 36, can help compel Milwaukee to pivot to a more aggressive defensive approach. Tjarks hopes that the Bucks will be similarly aggressive off the court as well, in looking to add perimeter help as they continue to rethink their bench.
There’s more out of the Central Division:
- After playing in his 19th game of the season yesterday, Bulls power forward Lauri Markkanen has achieved the starter criteria in his rookie contract, Bobby Marks of ESPN tweets. His qualifying offer for the summer of 2021 will now be worth $9.03MM instead of $7.03MM. In the two seasons leading up to Markkanen’s restricted free agency, he needed to start at least half of his games with Chicago to qualify. Markkanen started in all 50 games he was available for during the 2019/20 season, and has started in all 19 games he has played thus far this season.
- After 21 years with the Pacers, advance scout Jimmy Powell has retired, per Scott Agness of the Fieldhouse Files. Powell has been replaced by former Celtics scout Gary Schmidt.
- Pistons rookie point guard Saben Lee has been methodical in approaching his development during the 21-year-old’s first NBA season, according to Rod Beard of the Detroit News. “With the tortoise and the hare, the process was faster for the rabbit and everyone thought the rabbit was going to win,” Lee told Beard. “The turtle just kept his head on the end goal — and he messed around and won… That’s my mindset and how I feel like my process has been.” Lee has appeared in 19 games with Detroit, averaging 15.2 MPG thus far.
Pacific Notes: Oubre, Ranadive, Craig, Hill
In previewing trade possibilities facing the Warriors during the final week before the March 25 deadline, Anthony Slater of The Athletic explains the appeal wing Kelly Oubre Jr. could hold for other teams around the league.
Slater notes that Oubre, a young, athletic wing with upside left at age 25, is currently earning $14MM in the last year of his contract, and could be used in a trade to acquire an interesting player along the lines of shooting guards Victor Oladipo and Evan Fournier (both also on expiring deals), small forward Aaron Gordon, or restricted free agent point guard Lonzo Ball.
There’s more out of the Pacific Division:
- Kings majority owner Vivek Ranadive apparently is averse to surrendering to a full-on tank this season, and hopes to remain semi-competitive by retaining two of the team’s most trade-friendly players, Harrison Barnes and Buddy Hield, Howard Beck of Sports Illustrated asserted on the podcast Locked On Kings. Dan Feldman of NBC Sports Bay Area contends that “staying competitive” is not really much of an option as, with a 16-24 record, Sacramento is currently well below the threshold to compete for even a top-10 record in the Western Conference, and thus an appearance in a play-in game.
- Suns head coach Monty Williams expressed his excitement about the potential on-court fit of new reserve guard Torrey Craig, Duane Rankin of the Arizona Republic writes. “He’s a big, strong wing defender who can guard ones and twos and power forwards and can switch onto a bigger guy,” Williams raved. “We liked him when he was in Denver. Hated competing against him because he was such a good defender and a tough guy for sure.”
- The Clippers appear in need of a point guard upgrade. Brian Windhorst of ESPN (video link) thinks that Thunder veteran George Hill could be a fit, but that a player at the level of Lou Williams may need to be sent back in a deal. “He’s a guy who played for [LA head coach Tyronn] Lue in Cleveland and could fit there, but it would probably take a trade of Lou Williams to get that to happen,” Windhorst said.
Bagley To Have Broken Hand Re-Evaluated In Four Weeks
After fracturing the fourth metacarpal in his left hand on Monday against the Hornets, Kings big man Marvin Bagley III will not require surgery, per Jason Jones of The Athletic (via Twitter). Jones adds that Sacramento will reassess the malady and update Bagley’s recovery timeline in four weeks.
The No. 2 overall selection in the 2018 draft out of Duke, Bagley is averaging 13.9 PPG and 7.4 RPG this season across 25.7 MPG for the 16-24 Kings in a starting role, very much in line with his career stats of 14.5 PPG and 7.5 RPG in 25.5 MPG.
Various injuries have impeded the 22-year-old Bagley’s development for much of his NBA career thus far. He has appeared in just 112 of a possible 194 games over the course of his tenure in Sacramento. Bagley looked like a possible trade candidate this season, but his latest injury – combined with his overall lack of availability – will limit his value, and the Kings likely won’t be eager to sell low.
Atlantic Notes: Perry, Robinson, Ainge, Powell
During a conversation on the Glue Guys Podcast, do-everything Nets guard Bruce Brown expressed his excitement about rookie power forward Reggie Perry, freshly returned to Brooklyn after logging time in the G League “bubble” for the Long Island Nets. As relayed by Net Income of Nets Daily, Brown raved about Perry.
“The person I hadn’t seen a lot that was killing it in training camp was Reggie Perry,” Brown said. “He looked like he could be in the rotation. He was doing a little bit of everything, hitting threes, jump hooks, killing people, killing (center DeAndre Jordan) low key. He literally was killing training camp.”
There’s more out of the Atlantic Division:
- Though the Knicks have yet to supply a recovery timeline for the fourth metacarpal fracture incurred by center Mitchell Robinson on February 12, a Northwestern University-based orthopedic hand surgeon indicated to Marc Berman of the New York Post that Robinson could be out for a total of six to eight weeks.
- During a conversation with Brian Robb of Mass Live, Celtics president of basketball operations Danny Ainge discussed a variety of topics, including just how active Boston will be in the week leading up to the trade deadline. “I always go into the trading deadline, thinking that there’s something that we can do to help our team,” Ainge said. “I’m not talking about a big talent swing, I’m talking about just incremental positional changes you know one position in place of another, that we could use.”
- Raptors guard Norman Powell, on a tear of late, has emerged as perhaps Toronto’s top trade asset ahead of the deadline next week, according to Josh Lewenberg of TSN Sports. Powell has an $11.6MM player option for the 2021/22 season.
Rockets Notes: Young Players, Tucker Deal, Lamb
As injured Rockets veterans continue to rejoin the roster, head coach Stephen Silas still intends to keep some rotation minutes open for the development of Houston’s youth movement, according to Jonathan Feigen of the Houston Chronicle.
The most recent player to return to the Houston lineup is center Christian Wood, who rejoined the team on the floor last night after a 17-game absence due to a sprained ankle. Wing Danuel House Jr. also recently returned from his own injury absence, and veteran guards John Wall and Victor Oladipo are expected back Friday.
A pair of tantalizing 20-year-olds – Kevin Porter Jr. and Kenyon Martin Jr. – still figure to earn major minutes even with the older players back on the floor. “I will say I am working on it and I am attentive to the fact I want those young guys to play,” Silas said.
There’s more out of Houston:
- Following the deal that sent P.J. Tucker, Rodions Kurucs and a 2022 first-round draft pick (Milwaukee’s own) to the Bucks, Kelly Iko of The Athletic explains why he thinks both the Rockets and Milwaukee should be happy with the trade. In return, Houston received some promising draft assets, plus veteran reserve point guard D.J. Augustin and young power forward D.J. Wilson. Iko is intrigued by the lengthy Wilson’s upside and fit within a Silas system, Augustin’s veteran know-how, and the Rockets front office’s acquisition of two Bucks first-round picks in the deal.
- Rockets two-way player Anthony Lamb was named the G League’s Most Improved Player due to his stellar output for the Rio Grande Valley Vipers, G League affiliate for the Rockets, according to an NBAGL press release.
- As we previously relayed, Rockets swingman David Nwaba initially opted to avoid surgery on his injured wrist to help a Rockets club riddled with player absences. He subsequently re-aggravated the injury, making surgery a possibility once again.
Lakers Notes: Trade Deadline, Center, Caruso
Several key Lakers contributors, including Dennis Schröder, Alex Caruso, and Talen Horton-Tucker are up for new deals this offseason, and Adrian Wojnarowski of ESPN said in the latest episode of The Woj Pod that he has the sense the team would like to move some long-term money off its books to create more flexibility to re-sign those players.
“I do think they would like to free up some of that money they owe down the line to put themselves in position to keep the guys they have there,” Wojnarowski said, per RealGM. “I think that’s kind of at the center of some of their talks here around the trade deadline.”
While Woj didn’t specifically name Kyle Kuzma and Kentavious Caldwell-Pope as players the Lakers are discussing in trades, he observed that they’re the non-stars on the roster who have multiyear contracts. Kuzma would be tricky to move this year because he has a contract extension going into effect in 2021/22, so if L.A. wants to move some long-term money, KCP could be the team’s top trade candidate by default.
Here’s more on the Lakers:
- Jovan Buha of The Athletic breaks down the defensive performance of Marc Gasol and Montrezl Harrell, weighing whether the Lakers need to pursue a center upgrade via trade or on the buyout market. Buha contends that the concerns about the club’s interior defense have been overblown and that the return of Anthony Davis could sufficiently address the issue.
- Lakers guard Alex Caruso, who has missed the team’s last two games, has been cleared from the NBA’s concussion protocol and will be available vs. Charlotte on Thursday night, as ESPN’s Dave McMenamin relays (via Twitter).
- In case you missed it, the Lakers are reportedly among the teams to watch if free agent Isaiah Thomas gets another NBA opportunity.
Draft Notes: K. Jones, Springer, Camper, S. Mitchell
Sam Vecenie of The Athletic published his latest 2021 NBA mock draft this week, while Kevin O’Connor of The Ringer posted the initial version of his draft guide, complete with prospect rankings. Like just about every other draft expert, Vecenie and O’Connor have Oklahoma State’s Cade Cunningham atop their boards, with Evan Mobley, Jalen Green, Jalen Suggs, and Jonathan Kuminga filling out the top five, in some order.
Beyond the top five though, there are some interesting choices filling out the lottery in Vecenie’s mock draft and in O’Connor’s rankings. Both analysts are high on the raw potential of Texas big man Kai Jones, with O’Connor placing him eighth and Vecenie putting him at No. 10 — Jones falls outside the lottery on ESPN’s big board.
Meanwhile, Tennessee guard Jaden Springer is the No. 27 player on ESPN’s board, but is considered a potential lottery pick by both Vecenie (No. 12) and O’Connor (No. 14). Vecenie acknowledges that there’s a wide range of opinions on Springer, who has some “real inefficiencies in his game,” but believes the 19-year-old is boosting his stock with a strong finish to the season.
Here’s more on the 2021 NBA draft:
- After testing the draft waters a year ago, Siena swingman Manny Camper has declared for the draft in 2021, confirming his decision on Twitter. Camper was a senior this year, but because NCAA players were granted an extra year of eligibility due to the coronavirus pandemic, he isn’t automatically draft-eligible.
- Boston College senior forward Steffon Mitchell is entering the draft, he announced on Instagram. Mitchell averaged 9.1 PPG and 7.3 RPG in 16 games (32.6 MPG) in 2020/21.
- In case you missed it, potential lottery pick Isaiah Jackson is testing the draft waters, as we detailed earlier today.
Northwest Notes: Millsap, Nuggets, Thunder, Blazers, Wolves
After being sidelined for 10 games by a left knee sprain, Nuggets big man Paul Millsap came off the bench in his first game back, but was reinserted into the starting lineup on Saturday when Monte Morris and Gary Harris were unavailable.
According to Nuggets head coach Michael Malone, Millsap approached him after that Saturday loss and reiterated that he’d be happy to continue coming off the bench or to accept another role to avoid impending the chemistry the new starting group had established (Twitter link via Mike Singer of The Denver Post). Millsap has started both of Denver’s games since then – both wins – but could return to the bench once Morris and Harris return.
Here’s more from around the Northwest:
- The Nuggets will begin allowing fans into Ball Arena as of April 2, the team announced today in a press release. The plan is to limit capacity to 4,050 fans, approximately 22% of the building’s overall capacity.
- The Thunder used a portion of their $19.5MM traded player exception created in the Danilo Gallinari sign-and-trade to absorb Meyers Leonard‘s $9.4MM contract, tweets ESPN’s Bobby Marks. As a result, Oklahoma City created another TPE worth Trevor Ariza‘s salary ($12.8MM), which will be available until the week before next year’s trade deadline.
- Within his latest mailbag, Jason Quick of The Athletic says the Trail Blazers are gaining hope that Zach Collins (ankle surgery) can return by the postseason. Quick also believes LaMarcus Aldridge would be a great fit (and a great reunion story) for Portland if he’s available on the buyout market.
- Jon Krawczynski of The Athletic breaks down the Timberwolves‘ trade tiers, writing that Karl-Anthony Towns and Anthony Edwards are the untouchables, while Malik Beasley and Jaden McDaniels would only be in play for a star-caliber player.