Early Termination Options
LeBron James, Carmelo Anthony, Chris Bosh and Dwyane Wade are among the luminaries facing summer decisions about whether to exercise the early termination options in their contracts. Early termination options, or ETOs, are opportunities for players to free themselves from their contracts before they run to term, as the name suggests. They’re essentially player options, but with a few tweaks.
They were originally designed to give players a second chance to escape from their deals, since player options can only cover one season. That’s why James, Bosh and Wade all have early termination options for this summer and player options for 2015 as part of their contracts. The Heat stars signed under the previous collective bargaining agreement. The new CBA prevents deals from running longer than five seasons, and since early termination options may only be included in five-year pacts, contracts can no longer contain both an ETO and a player option.
That ETOs are only allowed in five-year deals also means that most of the players who hold ETOs are marquee names, since few others sign deals that cover five seasons. It also means that going forward, ETOs will be exclusively for free agents who re-sign with their teams via Bird rights, since there’s no other way to obtain a five-year contract in the new CBA.
ETOs allow teams and players slightly more room for negotiation than standard player options do, since the salary in a player option year can’t be any lower than in the previous season. There’s no such rule with an ETO, so players can have the contract front loaded, with an ETO season at a reduced salary around as insurance against an injury or decline in play. If the player is still performing at a high level after four seasons, he can exercise the early termination option and seek another lucrative contract. Teams may also benefit from this rule, similarly using the cheaper fifth season as protection against a drop-off in the player’s production. Still, no existing contract with an ETO is structured this way, in large measure because many of them are for the maximum salary, which precludes front-loading.
A player who signs a deal with a trade kicker stands to benefit if the contract also includes an early termination option. A trade kicker is a bonus that a player receives when he’s traded, and it’s usually equal to a percentage of the money remaining on the deal. Standard player option seasons don’t count toward trade kickers, but seasons covered by ETOs do.
There’s another difference between player options and ETOs that rarely comes into play. If a player opts out using a standard player option, he can still sign an extension before hitting free agency. That’s not the case with ETOs. Still, most players make formal decisions on these options not long before becoming free agents, leaving little time to negotiate extensions. Veteran extensions usually aren’t beneficial to players under the current collective bargaining agreement anyway, so there’s little incentive to choose a player option over an ETO just to gain more flexibility in signing an extension.
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.
Draft Links: 2015, D-League, Saric
GMs are split on whether raising the NBA’s minimum age is wise, and one of them tells Chad Ford of ESPN.com for an Insider-only piece that there are a lot of teams “eyeing 2015 with some real fear” that the change will be made quickly, stripping next year’s draft of talent. Commissioner Adam Silver is a strong proponent of moving the minimum age up from 19 years old, but the issue would be collectively bargained with the player’s union, which remains without an executive director. I’d be surprised if it happened in time for next year’s draft, but whenever the age goes up, it would no doubt slow the rebuilding process for a few teams. Here’s more:
- In another ESPN.com Insider piece, Amin Elhassan hears from an Eastern Conference executive about a proposal to raise the minimum age to 20 or 21 for collegiate players but keep it at 19 for anyone who entered the D-League out of high school. It’s unclear if the idea is gaining traction within the league.
- Lottery prospect Dario Saric tells Toni Horvat of the Croatian website 24Sata that he believes it would be best for his development to stay in Europe, but the 6’10” forward says he won’t make a decision about whether to declare for this year’s draft until after the season (translation via Emiliano Carchia of Sportando).
- Saric reportedly has a lucrative offer on the table from a Turkish team, and his father tells Horvat and 24Sata colleague Ivan Zuric that his son would also consider other European options that would allow Dario to see sufficient playing time. Predrag Saric wants to see his son remain in Europe for two more seasons (translation via Carchia).
Marcin Gortat Unwilling To Sign Extension
The Wizards reportedly offered Marcin Gortat an extension, but sources tell Shams Charania of RealGM that Gortat let the team know before the season that he’s uninterested in signing one. The Guy Zucker client‘s recent comments about his priorties in free agency this summer were a strong hint that he doesn’t want to do an in-season deal.
The January report from Marc Stein of ESPN.com that made mention of the extension offer also noted the Wizards’ strong interest in retaining the 30-year-old center, whom they acquired from the Suns before the season began. He’s averaging 12.8 points, 9.2 rebounds and 1.4 blocks per game as the starting center for Washington, numbers that top his career averages but fall short of the marks he put up in 2011/12, his best season in the NBA. He’s making $7,727,280 in the final season of a five-year deal he originally signed as an offer sheet from the Mavericks. The Magic matched it and later traded him to Phoenix.
Gortat’s salary for this year is identical to Trevor Ariza‘s, and the swingman is also set to become a free agent this summer. Charania’s piece focuses on John Wall‘s leadership of the Wizards, noting that he’s already begun pitching Ariza and Gortat on a long-term future in D.C. Washington has about $43.5MM in commitments for next season, meaning they’ll probably have between $18-19MM worth of flexibility under the cap. I speculated in January that Gortat could command a deal around $10MM a season, and bringing back Ariza on a salary similar to the one he earns now would take up most, if not all, of Washington’s cap room.
Sixers Interested In Casper Ware
The Sixers have interest in point guard Casper Ware and may invite him to audition for the team, a source tells Emiliano Carchia of Sportando. It’s unclear if the interest in Ware, who just parted ways with Virtus Bologna of Italy, is tied to the team’s workouts with four others or its apparent multiyear deal with Jarvis Varnado. Signing Varnado for the season would give Philadelphia 15 guaranteed contracts, so the team would have to cut one of those deals to sign Ware or anyone else.
Ware went undrafted out of Long Beach State in 2012, and aside from summer league stints with the Pistons and Rockets the past two offseasons, he’s conducted his pro career overseas. He was the MVP of Italy’s second-tier league last year, though his numbers tailed off this season with a step up to Italy’s first division. He averaged 11.7 points, 2.7 rebounds and 2.2 assists on just 36.3% shooting in 31.0 minutes per game.
His best assets may lie on defense. He was the Big West Defensive Player of the Year during his junior year in college, and over his four-year college career, he averaged 1.6 steals per game.
Phil Jackson Rumors: Monday
The top story across the NBA as the week begins is Phil Jackson‘s job offer from the Knicks, which he’s reportedly leaning toward accepting. There’s plenty of chatter surrounding that decision, so let’s dive in:
- There’s no guarantee that Jackson will take the job and those in his circle do not believe that an agreement is close, writes Adrian Wojnarowski of Yahoo Sports. Meanwhile, one source claims that owner James Dolan will not give complete autonomy to anyone in the front office.
- Frank Isola of the New York Daily News (on Twitter) says that Steve Kerr could be a head coaching candidate if Jackson takes the job.
- Adam Zagoria of SNY (on Twitter) hears that Jackson would get a deal worth ~$10MM per season.
Earlier updates:
- In a full story, Broussard writes that Jackson will “definitely” not coach the Knicks, and says that owner James Dolan would retain a voice in the club’s decision-making even with Jackson around. Jackson’s hiring would also likely please the team’s non-CAA clients, one of whom complained to Broussard about the preferential treatment that the Knicks give to players affiliated with the agency.
- All indications are that Jackson will take the job, a source tells Chris Broussard of ESPN.com. The title of the position remains unclear, but Jackson will not coach or become a consultant. The possibility of a last-minute change of heart remains, but the Knicks have the sense that he’ll accept their offer (Twitter links).
- Jackson is expected to let the Knicks know his choice today, notes Peter Botte of the New York Daily News. Although other reports suggest that he’s looking for the final word on basketball operations, as Pat Riley has with the Heat, a Jackson confidant claims he’d instead prefer to become more of a consultant, as Jerry West is with the Warriors.
- Carmelo Anthony said this weekend that the team hadn’t told him of any pursuit of Jackson, observes Marc Berman of the New York Post. “I don’t even know what’s going on with that,’’ Anthony said late Saturday night. “Nobody came to me about that. Until that time comes, I’m not going to know what’s going on. It’s hard to say at this particular moment. If anything, it’s not going to be right now. I’m pretty sure they’d try to wait for the offseason and then we’ll deal with all that stuff.”
- It’s possible that Jackson wouldn’t start working for the Knicks until after the season, Berman notes, which would jibe with Anthony’s comment. Jackson is reportedly seeking assurance that Anthony will remain with the Knicks.
- A friend of Anthony who’s “intimately” involved in his decision regarding free agency said last month that he wasn’t sure that ‘Melo would re-sign, reports Ian Begley of ESPNNewYork.com, who examines how Jackson could affect Melo’s willingness to stay. Begley notes that Jackson, unlike Anthony and many in the Knicks organization, isn’t a client of the Creative Artists Agency.
Knicks Sign Shannon Brown To Second 10-Day
3:48pm: The Knicks officially announced the signing, via Twitter.
8:05am: The Knicks will sign Shannon Brown to another 10-day contract today, as Marc Berman of the New York Post notes. Berman reported earlier that Earl Clark will also be getting a second 10-day deal. Both were signed late last month to replace Metta World Peace and Beno Udrih, with whom New York agreed to buyouts.
Brown averaged 2.0 points in 8.2 minutes per game in his first 10-day stint with the Knicks, which ended Saturday. He saw similarly limited playing time on a pair of 10-day contracts with the Spurs earlier this year. It’s his only NBA action in 2013/14, since he spent most of the season as a free agent after Washington released him shortly before the start of the season following his arrival via trade from Phoenix.
The Mark Bartelstein client had a contract guaranteed for $3.5MM this year when the Wizards placed him on waivers, so he continues to receive that salary. Washington recoups a tiny portion of that with each 10-day deal Brown signs this season via set-off rights, with a slightly larger chunk taken off the Wizards’ bill if the Knicks sign Brown for the balance of the season when his latest 10-day pact expires.
Grizzlies, Hawks, Jazz Interested In Joe Ingles
The Grizzlies, Hawks and Jazz are interested in point forward Joe Ingles, who is considering exercising an NBA escape clause in his deal with an Israeli team this summer, reports David Pick of Eurobasket.com (All Twitter links). The 6’8″ 26-year-old rejected a two-year offer from Memphis last summer, Pick tweets. The Pacers, Bucks and Clippers also reportedly had interest at that time.
“I’m definitely thinking about the NBA,” Ingles told Pick (Twitter link). “Every year I don’t go, it closes the door a little more.”
The native of Australia added that he’s not yet ready to shift his focus from helping Maccabi Tel Aviv in the Euroleague, as Pick also tweets. Despite all the intrigue from NBA clubs, his numbers in Israel aren’t eye-popping. He’s averaging 8.1 points, 3.5 assists and 3.4 rebounds in 25.2 minutes per game this year, though he is shooting 39.1% from three-point range. He put up similar stats in his previous two seasons playing in the Spanish ACB league.
He went undrafted in 2009, so he’s free to sign with any NBA team once his escape clause kicks in at season’s end.
Sixers To Audition Scott Suggs, Johnson-Odom
2:32pm: Sixers coach Brett Brown is “thrilled” with Varnado and would like to keep him around, notes Dei Lynam of CSNPhilly.com, suggesting that it’s no certainty that anyone set to work out for the team will receive a contract. Brown has had a say in each of the moves the team has made since the start of the season, according to Lynam.
8:08am: The Sixers will bring in Scott Suggs and Darius Johnson-Odom on Tuesday to audition for the team, reports Shams Charania of RealGM. They also have workouts lined up for James Nunnally and Kevin Murphy, as we passed along Sunday night. Philadelphia has 14 guaranteed contracts and Jarvis Varnado on a 10-day deal, so their pursuit of another signee indicates that Varnado’s time in Philadelphia will be short. His deal expires at the end of the day today.
Suggs is a 6’6″ shooting guard who went undrafted out of Washington this past June. He’s been playing for the D-League affiliate of the Knicks, averaging 17.6 points and 41.4% three-point shooting in 36.0 minutes per game. He saw summer league action with the Bucks, but the 24-year-old wasn’t in camp with any NBA team. Johnson-Odom is a more familiar name, having seen four games of NBA action with the Lakers last season. He joined the Lakers again for camp in the fall and split the season between China and the Nets D-League affiliate. Jorge Gutierrez recently edged out Johnson-Odom for a 10-day contract with Brooklyn.
Sixers coach Brett Brown suggested late last month that the team would be cycling through several players at the end of the season, and it appears they’re indeed planning on giving at least a handful of guys a look. Varnado has scored 2.5 points and 3.8 rebounds on 12.5 minutes per game in his time with Philadelphia. If no one impresses during the workouts, it seems reasonable to think that the team would consider signing Varnado to a second 10-day contract.
Eastern Rumors: Knicks, Gortat, Pacers, Rondo
Carmelo Anthony‘s camp leaked the information about Joakim Noah‘s All-Star break recruiting pitch, and the Knicks have been open about their pursuit of Phil Jackson, observes Sean Deveney of The Sporting News. Deveney concludes the whispers from both sides are intended as posturing for ‘Melo’s free agency decision this summer. While we wait to see how the latest ‘Melo-drama will play out, here’s the latest from the rest of the Eastern Conference:
- Marcin Gortat says the strength of a team’s point guard and its coaching staff will be two qualities he’ll consider when he assesses suitors in free agency this summer, as he tells Kyle Weidie of ESPN.com. Gortat is high on re-signing with the Wizards, though his comments suggest he isn’t interested in signing an extension, reportedly one of Washington’s goals.
- The Pacers were concerned that Danny Granger had slacked off on the daily rehab regimen that was to help him regain his form after he missed almost all of last season with injuries, according to Steve Kyler of Basketball Insiders. That helped precipitate the deadline deal that brought Evan Turner and Lavoy Allen to Indiana, but Kyler wonders if the departure of the longtime Pacer did irreparable damage to the team’s chemistry.
- Danny Ainge embraces Rajon Rondo, stubbornness and all, as the Celtics president of basketball operations tells Baxter Holmes of the Boston Globe for a piece that examines Rondo’s nuanced personality.
D-League To Expand, Knicks To Own New Team
The Knicks officially announced today that they’re going to own a D-League team in White Plains, New York starting next season. The expansion squad will be the D-League’s 18th franchise. The Knicks on Friday confirmed a report from late last month that they were ending their relationship with the Erie BayHawks and planning to set up a team in Westchester County, where White Plains is located.
The Magic may replace the Knicks in Erie, as Josh Robbins of the Orlando Sentinel suggests, noting that the Magic are seeking a one-to-one affiliation in which they would run the basketball operations of a D-League club but leave the business side to local ownership (Twitter links). Orlando is sharing the Fort Wayne Mad Ants with five other NBA teams this year.
The Knicks become the seventh NBA team to own a D-League affiliate outright, while several others have the sort of “hybrid” partnerships the Magic want to arrange for next season. The Timberwolves are investigating the possibility of buying a D-League team, too, notes Andy Greder of the St. Paul Pioneer Press (Twitter link).
Knicks assistant GM Allan Houston will serve as the White Plains D-League club’s GM, so it appears he’ll remain with the organization regardless of whether Phil Jackson joins the Knicks as an executive.
The new affiliate of the Knicks will play at the Westchester County Center, about 30 miles north of New York City. The Knicks also have their training and practice facility in Westchester County, so it appears the Knicks plan to make heavy use of D-League assignments in the future. This year, they’ve only made five, as our D-League assignment/recall log shows.