Anthony Davis Becomes Extension-Eligible

Lakers big man Anthony Davis is now eligible to sign a veteran contract extension, as Bobby Marks of ESPN tweets.

Davis officially signed his current contract, a five-year, maximum-salary deal, on December 3, 2020. Typically, a player who signs a five-year contract must wait three full calendar years before he becomes extension-eligible, but the 2020 offseason was an unusual one due to the schedule irregularities caused by COVID-19.

Free agency didn’t begin until November 21 that year, with the regular season tipping off on December 22. The NBA determined that Dec. 3 of that offseason would have corresponded to August 4 in a typical offseason, which is why Davis became extension-eligible today.

Davis has two years left on his current contract — he’s owed a guaranteed $40,600,080 salary in 2023/24, with an early termination option worth $43,219,440 in 2024/25.

Exercising an early termination option is essentially the same as declining a player option — in either case, the player ends his contract a year early. However, there’s one key difference: an early termination option can’t be exercised as part of a veteran extension agreement. That means that if Davis wants to sign an extension this offseason, he would have to decline that ETO, which would lock in his current 2024/25 salary and result in his new deal beginning in ’25/26.

Davis will have until the day before the regular season begins in October to sign an extension this year. If he and the Lakers haven’t worked out a new agreement by that time, he would have to wait until the 2024 offseason to revisit his contract situation. At that point, he could either opt into the final year of his current contract and extend off that deal, or opt out and seek a new contract as a free agent.

The maximum value of a potential extension for Davis will depend on the rate at which the NBA’s salary cap increases during the next two offseasons. In an NBA Today appearance on ESPN on Thursday (YouTube link), Marks stated that a three-year extension for Davis could be worth up to about $169.1MM, but that would be based on a relatively conservative cap projection in the neighborhood of $149MM in 2025/26.

If the cap were to increase by the maximum allowable 10% in each of the next two seasons, a three-year extension for Davis could instead be worth as much as $186.6MM.

That may seem like a risky investment for a player who has battled injuries throughout his career and who wasn’t necessarily playing at a superstar level offensively during the Lakers’ postseason run this spring (he averaged 22.6 points per game in 16 contests).

However, Davis is still one of the NBA’s top two-way stars when healthy, and he’s only 30 years old. It’s worth noting too that extending him now would pay off in the long run if the alternative is negotiating a maximum-salary free agent contract of up to five years in 2024. If the Lakers were to extend Davis now, they’d lock him into a salary below his max in 2024/25 and would only have to commit to up to four total seasons beyond ’23/24, rather than five, reducing some of the risk on the back end.

ESPN’s Brian Windhorst recently suggested that there’s an expectation the Lakers will make Davis an extension offer fairly soon, while his colleague Dave McMenamin predicted the two sides will have a deal in place before training camp.

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