Hoops Rumors Originals

Five Key Offseason Questions: New Orleans Pelicans

After the in-season acquisition of DeMarcus Cousins didn’t pay immediate dividends for the Pelicans down the stretch in 2016/17, head coach Alvin Gentry and GM Dell Demps weren’t a lock to stick with the team last summer. New Orleans retained both, however, and the club was rewarded for its patience with its best regular-season record since 2009 and its deepest playoff run since 2008.

With Anthony Davis having become a perennial MVP candidate and Jrue Holiday establishing himself as one of the NBA’s best perimeter defenders, the Pelicans have a pair of building blocks under contract for multiple years. Now, the team will have to figure out how to retain enough pieces around those two stars to remain in contention going forward, particularly with two major contributors – Cousins and Rajon Rondo – up for new deals.

Here are five key questions facing the franchise this summer:

1. Will the Pelicans re-sign Cousins?

In 48 games before he tore his Achilles tendon, Cousins put up some truly incredible numbers, racking up 25.2 PPG, 12.9 RPG, 5.4 APG, 1.6 BPG, and 1.6 SPG. For good measure, he also led the team with 2.2 three-pointers per contest.

That production made Cousins an obvious candidate for a long-term, maximum-salary contract, but his ongoing recovery from Achilles surgery complicates matters significantly. While Achilles tears aren’t necessarily career-ending injuries, they’re often career-altering ailments, with players never quite looking the same as they did prior to the injury.

There’s no guarantee that will be the case with Cousins. It’s possible he’ll return to the court next season and look just as good as ever. However, that’s virtually impossible to predict, and teams willing to gamble on that sort of prognosis will have to pony up the max – or something close to it – months before Cousins is ready to return to action to find out if they’re right.

After giving up a slew of assets for Cousins just 16 months ago, the Pelicans probably can’t afford to just let him walk for nothing, especially since doing so wouldn’t get the team below the cap. That leaves two probable scenarios — either New Orleans brings back the ex-King, or the club negotiates a sign-and-trade deal to send him elsewhere.

Given the overlap between Davis’ and Cousins’ skill sets, the idea of signing-and-trading Cousins for a wing who might fit better alongside Davis and Holiday is intriguing. But sign-and-trades require two teams and the player to all be on the same page, and roadblocks can often get in the way of finalizing a deal. So that scenario might be a last resort for the Pelicans, whose preference will be to bring back Cousins on a shorter-term or less expensive deal that would mitigate the risk in case his Achilles continue to be an issue going forward. It remains to be seen whether the star center will be on board for that sort of contract or whether he’ll receive better offers.

2. Will the Pelicans re-sign Rondo?

While Rondo isn’t the sort of marquee free agent that Cousins is, the Pelicans won’t overlook him this offseason. Not every stop in Rondo’s NBA career has been a huge success, but teams that like him really like him, and that appeared to be the case in New Orleans, where he was credited for helping set the culture for a team that won 48 games and a playoff series.

Rondo is coming off a one-year, $3.3MM pact, and will be in line for a raise this summer. If the Pelicans bring back Cousins or sign-and-trade him for another highly-paid veteran, the club will have to be cautious about how much it offers Rondo.

New Orleans already has nearly $93MM in guaranteed money on its books for 2018/19, and re-signing Cousins could add another $25MM+ to that figure. If Rondo commands a salary in the $8-10MM range, the Pelicans would be into luxury-tax territory unless they can cut costs elsewhere.

That doesn’t mean that Rondo won’t return — it simply means that the franchise will have to think long and hard about where its priorities lie and how it wants to spends its money. I imagine the Pelicans will do all they can to make sure the veteran point guard is back on the roster next season.

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NBA Salary Guarantee Dates For Summer 2018

Most NBA teams have at least one player on their books with a non-guaranteed salary or a partially guaranteed salary for the 2018/19 season. In the majority of those cases, the team has the ability to waive the player and get off the hook for that entire salary before it becomes guaranteed. However, many of those decisions will be due well before next year’s regular season gets underway.

Below, we’ve broken down the upcoming salary guarantee dates for many players currently on non-guaranteed or partially guaranteed contracts for 2018/19. Not every player on a non-guaranteed deal is included here — if a player’s contract doesn’t include any early salary guarantee dates, and won’t become fully guaranteed until January 2019, we’ll look at his deal at a later date.

For now, we want to get a better idea of which teams will have to make decisions on salary guarantees during or before the free agent period. So if a player’s non-guaranteed contract becomes fully or partially guaranteed during the months of June, July, August, or September, that’s noted below.

When his deadline date passes, we’ll note below if a player was waived. If he remained on the roster, receiving his guarantee, that’s noted with a ✔️ symbol. However, since teams and players can agree to push back guarantee dates, we’ll wait for confirmation one way or the other on those guarantees — if a player simply remains on the roster, without any updates, we won’t necessarily assume his deal has become guaranteed.

With the help of contract information from Eric Pincus of Basketball Insiders and ESPN’s Bobby Marks, here are this summer’s upcoming salary guarantee dates by team:

Atlanta Hawks

  • Isaiah Taylor: $1,544,951 salary becomes partially guaranteed for $300,000 after June 22. Full salary becomes guaranteed after July 27.

Boston Celtics

  • Daniel Theis: $1,378,242 salary becomes guaranteed after July 10.
  • Semi Ojeleye: $1,378,242 salary becomes guaranteed after July 15. Already partially guaranteed for $901,965.
  • Abdel Nader: $1,378,242 salary becomes guaranteed after August 1. Already partially guaranteed for $450,000.

Brooklyn Nets

Charlotte Hornets

  • Julyan Stone: $1,656,092 salary becomes guaranteed after August 1.

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Weekly Mailbag: 6/11/18 – 6/17/18

We have an opportunity for you to hit us up with your questions in this, our weekly mailbag feature. Have a question regarding player movement, the salary cap or the NBA draft? Drop us a line at HoopsRumorsMailbag@Gmail.com.

Who do you see the Kings selecting with the second overall pick now that Iman Shumpert has opted in? — Pat Aukes

Shumpert’s decision really doesn’t factor into Sacramento’s draft strategy. His contract only runs for another year, and the Kings have to be thinking about the long-term future with this draft. Luka Doncic was considered a co-No. 1 prospect with Deandre Ayton for most of the winter, and the Kings are said to have their eyes on Michael Porter Jr., assuming team doctors approved him at Friday’s medical exam. If they really want Porter, their best move is find a team that likes Doncic and trade down a few spots. The Kings need a lot of help up front, so if they stay at No. 2, look for them to take Marvin Bagley III or Jaren Jackson Jr.

Considering the deep draft, who are the teams most willing to trade on draft night? — Fernando Bravo

The Grizzlies have let it be known that their selection at No. 4 is available to anyone willing to take on Chandler Parsons‘ contract, and as we relayed earlier today, the Sixers have more draft picks than open roster spots. We could see a lot of movement on draft night as this year’s crop of players offers intriguing prospects through the middle of the first round. Porter presents a wild card that makes this year’s draft especially unpredictable. He may have been in contention for the No. 1 spot without the back injury, and it’s hard to say who might try to engineer a trade to get their hands on him. The farther he falls on draft night, the more likely it is that someone will be willing to take the risk.

Which player will be the first shock with how early he went? — Jimmy Robinson, via Twitter

There are several contenders, especially after the way Donovan Mitchell shocked the league after falling to 13th last year. No one wants to miss the next Mitchell, so teams are taking a long look at prospects pegged to go in the middle of the first round. One potential surprise is Kentucky guard Shai Gilgeous-Alexander, who turned into a star for the Wildcats over the second half of the season. He stands 6’6″ with a 7-foot wingspan and can handle either backcourt position. Don’t be surprised if he moves into the top 10.

Community Shootaround: This Year’s Donovan Mitchell

“He made strides as a playmaker in his sophomore season and operating out of the pick and roll … However, he still plays too fast at times, not always reading the defense and making the simple play … He also lacks the ideal height and court vision to see over the top of the defense, especially with bigger opponents guarding him … He has a tendency to settle for tough, contested two-point jumpers, partially due to his inability to consistently get all the way to the rim, and also because of his average decision making skills … While he can make some of these attempts, it will not be a reliable way to score at the next level, and it will decrease his overall offensive efficiency, as it has in college.”

From NBAdraft.net, that was part of last year’s scouting report on Donovan Mitchell. Those concerns led to him being passed over by 12 teams and then traded by the one that did select him. Mitchell was viewed as an undersized player for his position who needed to land in the right situation to be successful.

He blew away expectations, of course, providing the Jazz with the go-to scorer they needed after the loss of free agent Gordon Hayward. Mitchell became a finalist for the Rookie of the Year award and reminded us that the draft remains hard to predict, no matter how closely the prospects are studied.

It’s easy to criticize the teams that didn’t see Mitchell as a future star. It’s much harder to pick out a similar surprise from this year’s crop. The first 10 selections in the latest mock draft by ESPN’s Jonathan Givony are Deandre Ayton, Marvin Bagley III, Jaren Jackson Jr., Luka Doncic, Mo Bamba, Wendell Carter Jr., Michael Porter Jr., Trae Young, Kevin Knox and Mikal Bridges. The next version of Mitchell might be somewhere outside that group. Here are a few candidates:

  • Shai Gilgeous-Alexander — The late-blooming Kentucky star has exceptional size for a point guard, standing 6’6″ with a nearly 7-foot wing span. He is an aggressive defender who can guard several positions, and scouts are confident that his offense will improve as he ages.
  • Lonnie Walker — Miami’s shooting guard is blessed with considerable athletic ability and a nice shooting stroke that should transfer well into the NBA. He was impressive at the combine both on and off the court, as teams took notice of how he smoothly conducted himself with the media.
  • Collin Sexton — For all the attention that went to Young, Alabama’s Sexton may have been the best pure point guard in college basketball. He displayed a combination of strength, speed and agility and seemed to raise his game in big moments.
  • Zhaire Smith — Athleticism stands out for the Texas Tech freshman, who proved to be a dangerous scorer from all over the court and is particularly adept at drawing fouls. He also made strides on defense and as a rebounder and could develop into an all-around player.
  • Miles Bridges — An A-plus athlete who can match up with guards and forwards, Bridges might have been a certain lottery pick if he had left Michigan State last year. He has a smooth jumper and can get easy points on cuts to the basket, but scouts are most impressed by his athleticism and competitive drive.

Of course, there are a lot more candidates, and we want to get your input. Which player projected to be drafted outside the top 10 has the best chance to turn into a star? Please leave your feedback in the comments section below.

Five Key Offseason Questions: Utah Jazz

Losing a homegrown All-Star like Gordon Hayward in free agency last summer could have set the Jazz back years. Instead, it only set them back by three regular-season wins, as the club returned to the postseason and once again advanced to the second round before being bounced from the playoffs.

It was a very encouraging year for the Jazz, showing they’d be able to withstand the loss of a franchise cornerstone without slipping back into the lottery. Rookie guard Donovan Mitchell helped smooth the transition to the post-Hayward era, emerging as a long-term building block in his own right. Now, Utah will have to figure out what roster moves are necessary to give the franchise a better chance at making a slightly deeper playoff run.

Here are five key questions facing the Jazz this summer:

1. Will the Jazz re-sign Derrick Favors?

For a time, it seemed as if a frontcourt combination of Favors and Rudy Gobert simply wasn’t compatible, with Favors struggling to make an impact alongside Gobert and thriving when given a chance to handle the center position on his own. However, Quin Snyder and the Jazz made it work in the second half of the 2017/18 season.

In Favors, the Jazz have not only a reliable backup center for Gobert who can step in and play starter minutes in the event of an injury, but a power forward capable of matching up with other teams’ two-big lineups. Neither Favors nor Gobert can shoot from beyond the arc, but Favors has a mid-range game that stretches the floor to some extent, and as long as they’re on the court with two or three other players capable of hitting threes, it seems to work.

Assuming Utah is confident that the pairing can continue to have success, I’d expect the club to make a strong effort to re-sign Favors as a free agent this summer. If the Jazz have the opportunity to land a versatile impact player at the four, the team could let Favors walk and look to add a more affordable backup center separately, but if not, the Jazz have the cap flexibility to outbid teams that only have the mid-level exception available. It wouldn’t be a surprise to see Favors land a deal worth slightly more than the MLE — perhaps three years for $30-35MM.

2. Will Dante Exum‘s time in Utah continue?

Selected right after Joel Embiid and Aaron Gordon and right before Marcus Smart and Julius Randle in the 2014 draft, Exum is perhaps the only player in that group who isn’t assured a big payday this summer. Various injuries have limited him to 80 regular-season games in the last three seasons, but Exum is still just 22 years old, and flashed tantalizing play-making potential when he got healthy down the stretch in 2017/18.

With Ricky Rubio under contract for one more season and Raul Neto also eligible for restricted free agency this summer, Utah’s long-term outlook at the point guard spot is somewhat hazy. As such, it might make sense for the club to invest in Exum on a sort of a bridge deal for two or three years. If he stays healthy and keeps improving, he could be a ready for a bigger role by the time Rubio’s contract expires. If he continues to battle injuries and fails to make major strides, then the Jazz can get out from under his deal before too long.

Finding a price point that works for both Exum and the Jazz could be a challenge. Near the end of the regular season, one front office executive estimated that a two-year offer worth a total of $18-20MM might be enough for a rival team to pry the former fifth overall pick out of Utah, and I wouldn’t be shocked if a team drew up an offer sheet even more aggressive than that. A team like the Suns, for instance, could afford to roll the dice on a young player like Exum developing into their point guard of the future.

If an offer sheet of that caliber doesn’t materialize, the Jazz should be able to retain Exum on a more reasonable deal, perhaps in the range of $7-8MM per year.

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Hoops Rumors Originals: 6/9/18 – 6/16/18

Every week the Hoops Rumors writing staff strives to create interesting and original content to complement our news feed. Here are the original segments and features from the last seven days:

Taking A Closer Look At LeBron James’ Future

One of the NBA’s all-time best players can become a free agent this summer, and despite rumors about which cities he does and doesn’t like, or where his kids might be attending school next fall, LeBron James‘ next team remains a mystery.

We will, of course, be covering all the latest news and rumors on James’ decision in the coming weeks, but before he decides on his home for the 2018/19 season, we want to take a look at several key factors which will help determine where LeBron will continue his career.

Let’s dive right in…

Why June 29, not July 1, may be the most important LeBron-related date of the summer:

Discussing James’ upcoming “free agency” is getting a step ahead of ourselves, since there’s a very real chance that the four-time MVP won’t become a free agent at all. James currently holds a player option for the 2018/19 season.

Star free agents usually decline player options because doing so gives them a chance to earn a larger salary and to potentially secure a long-term deal if they so choose. However, in James’ case, his $35,607,968 player-option salary actually exceeds the projected maximum salary based on a $101MM cap ($35.35MM). As such, there may not be a strong incentive to opt out of his contract.

Exercising that player option would open up more doors for James this offseason. There are barely any teams around the league that project to have $35MM+ available in cap room to sign him outright as a free agent, but virtually any club could put together a trade package to acquire him if he opts in.

This situation is very reminiscent of Chris Paul‘s 2017. Widely expected to reach free agency, Paul instead picked up his 2017/18 player option before his late-June deadline in order to accommodate a trade to the Rockets, who didn’t have the cap space to sign CP3 outright.

A looming June 29 player-option decision deadline means that James and his representatives may ultimately have to make a decision on his next destination before the end of the month. If LeBron wants to go to a team that will need to trade for him after he opts in, he’ll have to reach an understanding with the Cavaliers by June 29 to ensure that they don’t just keep him for next season once he picks up his option. Additionally, in that scenario, the Cavs would need to feel comfortable that they’ll be able to work out an acceptable trade with the team James wants to join.

It’s an unusual situation, and one that could mean we find out James’ 2018/19 destination even before the new league year begins on July 1.

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Notable Trade Exceptions Available This Offseason

For NBA teams lacking the cap room to make impact additions to their roster this offseason, traded player exceptions represent one tool available to accommodate that sort of acquisition.

As we explain in our glossary entry, traded player exceptions are created when a team trades away a single player without immediately taking salary back in return. The club then has up to one year in which it can acquire one or more players whose combined salaries amount to no more than the traded player’s salary (plus $100K).

That means sizable traded player exceptions created during the 2017 offseason are on track to expire in the coming weeks or months, so teams will have to use them or lose them during the 2018 offseason. Trade exceptions generated during the 2017/18 regular season prior to the February deadline will be available through the offseason and into the 2018/19 season.

The full list of available traded player exceptions can be found right here, but here are a few notable TPEs worth keeping an eye on during the coming offseason:

Portland Trail Blazers
Value of traded player exception: $12,969,502
Expiry date: 7/25/18
Created when they traded Allen Crabbe to the Nets.

The Trail Blazers already have more than $110MM in guaranteed salaries on their books for 2018/19, and that figure doesn’t include a potential new contract for Jusuf Nurkic. So unless they’re able to significantly cut costs elsewhere, it may not be realistic for the Blazers to use their $13MM trade exception to take on another sizable contract.

Still, president of basketball operations Neil Olshey talked earlier this offseason about feeling as if Portland has been too “protective” of some of its assets, including its trade exception. So it sounds like he’ll explore possible uses for it, even if the club ends up not finding a viable deal.

Chicago Bulls
Value of traded player exception: $12,500,000
Expiry date: 2/1/19
Created when they traded Nikola Mirotic to the Pelicans.

The Bulls have been in an odd spot from a cap perspective for the last year, having carried a variety of exceptions that technically made them an over-the-cap team even though their players salaries have never exceeded $99MM. Chicago will have another opportunity to dip below the cap this offseason, and it seems likely that the club will do so, which would mean forfeiting this exception.

Toronto Raptors
Value of traded player exception: $11,800,000
Expiry date: 7/13/18
Created when they traded DeMarre Carroll to the Nets.

The Raptors, who also have a $6,125,440 exception left over from last July’s Cory Joseph deal, are in a similar spot to the Blazers. While their TPEs are good tools to improve the roster in theory, the Raptors have a potential luxury-tax bill to worry about. As such, adding salary without sending out any in return probably isn’t practical for Toronto, and I wouldn’t be surprised to see these exceptions expire.

It’s worth noting that are ways for the Raptors – and other teams on this list – to roll over at least one significant TPE for another year. For instance, let’s say Toronto dealt a player like Norman Powell for someone making about $10-11MM in 2018/19. In that scenario, the Raps could acquire the incoming player with the Carroll TPE and create a new exception worth Powell’s salary.

Los Angeles Clippers
Value of traded player exception: $7,273,631
Expiry date: 6/28/18
Created when they traded Chris Paul to the Rockets.

The Clippers have less than two weeks to use this exception, created in last June’s CP3 blockbuster. This limits their options, since many deals won’t be made until the new league year begins in July. I think this exception is a good bet to go unused.

Detroit Pistons
Value of traded player exception: $7,000,000
Expiry date: 1/29/19
Created when they traded Boban Marjanovic to the Clippers.

With nearly $112MM in guaranteed money on their 2018/19 cap, the Pistons have a little more flexibility than teams like the Blazers and Raptors, but not by much. For instance, Detroit likely wouldn’t be able to use its full mid-level exception and acquire a $7MM player using this TPE. However, if the Pistons can’t find a player they like on the free agent market worth a mid-level investment, this exception could provide an alternate path to adding a bench piece.

Cleveland Cavaliers
Value of traded player exception: $5,811,114
Expiry date: 8/22/18
Created when they traded Kyrie Irving to the Celtics.

There are a ton of moving pieces in play for the Cavaliers‘ offseason, so this modest exception will get overlooked. Still, it could be a useful tool to try to acquire help for LeBron James if he stays — or to help accommodate some roster reshuffling if he departs.

Five Key Offseason Questions: Oklahoma City Thunder

After losing Kevin Durant during the summer of 2016, the Thunder made an effort to reintroduce some star power to their roster during the 2017 offseason, finalizing trades for Paul George and Carmelo Anthony to create a new “Big Three” along with Russell Westbrook.

However, Oklahoma City sacrificed important depth in those deals, and it came back to haunt the team, particularly after Andre Roberson went down with a season-ending injury — the bench ranked 29th in the NBA in scoring during the regular season, and was dead last in PPG during the playoffs. Whether or not George and Anthony are still on the roster next season, OKC will have to find a way to replenish its rotation with reliable contributors.

Here are five key questions facing the franchise this summer:

1. Will George re-sign with the Thunder?

A year ago, it seemed like a foregone conclusion that George would be traded to a team like the Lakers – his preferred landing spot – or the Celtics, who had more than enough assets to put together any number of competitive trade offers. The Thunder ended up shocking the world by snatching George out of Indiana in a blockbuster deal that virtually no one saw coming.

Twelve months later, it’s tempting to once again write the Thunder off as a long-term home for George, particularly after the team’s unceremonious first-round exit from the postseason. There’s a clear path for George to return home to Los Angeles and join the Lakers, who can create enough cap room to sign two stars this offseason.

Still, we keep hearing that the Thunder remain confident about their chances of re-signing George, and Marc Stein of The New York Times wrote this week in his newsletter that there’s a “growing belief” around the league that the club’s confidence is well-founded. I’m still not entirely convinced that George sticks in Oklahoma City. After all, the last time the Thunder were conveying this sort of confidence heading into a star player’s free agency, he bolted for the Bay Area.

It would be fascinating to see what happens if the Thunder do re-sign George. A maximum-salary contract for the two-way forward would start at $30MM+. With about $89MM in guaranteed money already on the club’s 2018/19 cap, and Anthony’s expensive player option likely to add another $28MM or so to that figure, OKC probably can’t really afford George unless costs are cut elsewhere.

2. Will Anthony be on the Thunder’s roster in 2018/19?

Whether or not George is back, Anthony’s player option is a problem. He hasn’t technically opted in yet, but there’s no chance he’ll turn down a $27.9MM+ salary. He’d be lucky to receive a third of that on the open market.

Anthony’s situation is somewhat reminiscent of Dwyane Wade opting into his $23MM+ contract with the Bulls last June. Wade was unlikely to ever get that sort of payday again, so he couldn’t pass up the money, but it quickly became clear that he had no interest in playing for the rebuilding Bulls, and the two sides reached a buyout agreement that saw Wade give up about $8MM in order to sign with a team of his choice.

While the Thunder and Anthony could reach a similar agreement, Carmelo may not quite as eager as Wade was to leave his current situation. Chicago was entering a full-fledged rebuild, whereas OKC hopes to contend again next season, particularly if George returns. Paradoxically though, it looks like there’s no way the Thunder could reasonably keep Anthony on board at his current cap figure if they re-sign George. The tax penalties would be too high.

If George re-signs, I’d expect Anthony to be waived and stretched, even if he’s not willing to give up any money in a buyout. Stretching the final year of his contract over three seasons would reduce his cap charge by about $18.6MM, creating some badly-needed relief for the Thunder. Even if George isn’t back, it wouldn’t be a total surprise to see OKC take that route, since doing so would move team salary well below the tax line and would generate some flexibility for other roster moves.

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Hoops Rumors Glossary: Over-38 Rule

The Over-38 rule, formerly known as the Over-36 rule under the NBA’s previous Collective Bargaining Agreement, closes a loophole in the CBA, preventing teams from paying older free agents more than their cap room or cap exceptions allow. It also limits the ability of players in their mid- to late-30s to sign long-term contracts.

The original purpose of the Over-38 rule was to block teams from circumventing the salary cap by offering a contract that extends beyond when the club expects a player to end his career. For instance, if a team wanted to offer a 37-year-old free agent a two-year contract worth $35MM but only had the mid-level exception available, the team could have made it a four-year offer in order to fit the average annual salary within the MLE, knowing that the player could collect his third- and fourth-year salaries after retiring. The Over-38 rule prevents that.

The Over-38 rule generally takes effect when a free agent signs a long-term contract that extends beyond his 38th birthday. In these cases, the salary in the year(s) after the player turns 38 is considered deferred compensation, and is applied to the years earlier in the contract, when that salary is actually being earned. In most cases, this prevents the team from completing the contract using the necessary cap room or exception.

The Over-38 rule is a little complicated, so let’s use a real-life example to illustrate it. In the summer of 2017, the Rockets and Nene fell victim to the Over-38 rule when they tried to complete a four-year deal using Nene’s Non-Bird rights. The contract would’ve looked like this:

Year Salary
2017/18 $3,477,600
2018/19 $3,651,480
2019/20 $3,825,360
2020/21 $3,999,240
Total $14,953,680

Unfortunately for Nene and the Rockets, the final year of this deal would have violated the Over-38 rule because the veteran center will turn 38 on September 13, 2020, prior to the start of the fourth season of his contract.

The start of a season is considered to be October 1 for Over-38 purposes, so if Nene’s birthday was on October 13 rather than September 13, he would have been okay. But because a four-year deal for him had to be considered an Over-38 contract, the fourth-year salary needed to be viewed as deferred compensation, which would be spread out in a prorated fashion over the first three years of the deal. It would have looked like this:

Year Salary Deferred Compensation Cap Charge
2017/18 $3,477,600 $1,269,600 $4,747,200
2018/19 $3,651,480 $1,333,080 $4,984,560
2019/20 $3,825,360 $1,396,560 $5,221,920
2020/21 $3,999,240 $0 $0
Total $14,953,680 $3,999,240 $14,953,680

Due to the increased cap hits on the new-look deal, the contract would have violated the rules of the Non-Bird exception, which limited Nene’s first-year salary to 120% of his previous salary ($2,898,000). As such, the Rockets couldn’t complete the four-year contract using those Non-Bird rights.

It’s important to note that the Over-38 rule didn’t prevent the Rockets from signing Nene to a four-year, $15MM deal. If the team had wanted to use part of its mid-level exception, it could have given him that same contract the two sides originally negotiated. But Houston had earmarked its MLE for P.J. Tucker, leaving the Non-Bird exception as the team’s only viable means of bringing back Nene. So while Nene technically could have signed a contract that extended beyond his 38th birthday, the Over-38 rule significantly limited the Rockets’ ability to complete such a deal.

In Nene’s case, that fourth year was referred to as a “zero year,” reflecting the adjusted cap charge. Determining what seasons are considered “zero years” is tricky, since a variety of factors relating to the length of the contract, the player’s age, and the player’s Bird rights are taken into account. Here are some of those factors:

  • The Over-38 rule only applies to four- or five-year contracts, or extensions that keep a player under contract for a total of four or five years.
  • The first “zero year” is either the fourth season of the contract or the first season after the player’s 38th birthday, whichever comes later.
  • Players who re-sign with their previous teams prior to October 1 using full Bird rights get some extra leeway. If a player who is 35 or 36 years old signs a four-year contract with his previous team using Bird rights, the Over-38 rule wouldn’t apply. If that player signs a five-year contract, only the fifth season would be considered a zero year. In other words, if Nene had full Bird rights last summer, his four-year deal wouldn’t have been subject to the Over-38 rule.
  • These special exceptions for players with Bird rights don’t apply to players who change teams via a sign-and-trade.

If the Over-38 rule doesn’t already sound complicated enough, there’s an additional aspect of the rule that affects what happens when a veteran on an Over-38 contract plays out most or all of his deal. In that scenario, his deferred compensation gradually stops being considered deferred, and his cap hits are adjusted accordingly over the course of his contract. You can check out Larry Coon’s CBA FAQ for more details on that component of the rule if you’re interested.

Finally, it’s worth noting that LeBron James and Chris Paul reportedly played major roles during the last CBA negotiations in having this rule changed from the Over-36 rule to the Over-38 rule. It’s probably no coincidence that both James and Paul head into the 2018 offseason at age 33 with the opportunity to sign five-year deals that would have been considered Over-36 contracts — the new Over-38 rule won’t interfere with those deals.

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.

Photo courtesy of USA Today Sports Images.