The NBA’s new multibillion-dollar TV deal will kick in for the 2016-17 season, raising the salary cap by several million dollars and changing the landscape of the NBA.
For both players and owners, this is good news: more revenue for the owners, bigger contracts for the players.
A few players (most notably, LeBron James) have taken shorter contracts to make sure they are free agents when the new money kicks in.
But for other players, the financial security of signing a guaranteed contract today outweighs the allure of making more money by becoming a free agent in 2016.
It’s a difficult decision: take the money today, or risk waiting two years and trying to sign an even bigger deal?
Klay Thompson of the Golden State Warriors, one of the best young players in the NBA, has to sign a contract extension by October 31 or he’ll hit free agency in 2016 when the new TV deal kicks in.
“It really is tempting to [become a free agent when the cap rises],” Thompson said. “But I’d rather have the security right now, you know?”
That’s the response you’d get from 99 per cent of the players, but keep in mind Thompson was playing with the U.S. men’s national team in Las Vegas when Paul George went down with that leg-bending, career-altering injury in August. The unthinkable happened right in front of him, and that memory sticks with Thompson.
“It does a little bit, I won’t even lie to you,” Thompson said. “When I play though, I don’t even think about it. I’m sure Paul wasn’t when it happened. You can’t let it hold you back.”
This has always been the the risk players run when they decide to become free agents rather than signing contract extensions. However, now that the cap is rising and bigger contracts are on the horizon, the incentive to forego future financial security is even more enticing. Players could see their earnings rise to historically high levels.
But as Adande and Thompson mention, the risk of injury is always present in the NBA, and there’s no way to predict when it might happen. In the worst case scenarios, players on the final year of their deals can suffer devastating injuries right before free agency and ruin their chances at a big payday.
NBA contracts are almost always guaranteed, so if players choose extensions over free agency, they will still get paid, even if they get hurt.
For Thompson, an extension would pay him considerably less than opting out to become a free agent, as ProBasketballTalk outlines. However, the long-term security of a four-year extension could ensure financial security into his late 20s and keep him on solid playoff team, too.
The Warriors would surely prefer the extension.
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