Staff Scrimmage: Contract Decisions Loom

September 28th, 2016 | by Salt City Hoops

Our SCH staff has been celebrating the return of basketball with a series of roundtable columns about the excitement and expectations around the Utah Jazz and about rotation decisions.

But October doesn’t just bring basketball — it is also decision season for a few pending Jazz contract matters. Perhaps most notably, the Jazz and Rudy Gobert have until October 31 to come to terms on an agreement to extend his rookie contract and keep him from hitting restricted free agency next summer. They also have two guys who are eligible for renegotiations and a number of decisions on players with non-guaranteed contracts.

The Jazz also must decide by Halloween whether to pick up the fourth-year options for Rodney Hood and Dante Exum as well as the third-year option for Trey Lyles. We left those out of this roundtable since retaining those three potential future stars for a combined $9.8 million seems like an easy choice.

But some transaction decisions may not be that easy, for one or both sides. Let’s talk about those.

1. How likely is it that the Jazz and Gobert come to terms on a rookie contract extension by the October 31 deadline?

Note: The Jazz can extend Gobert’s deal by four years1, starting at up to roughly 25% of the 2017-18 salary cap2.

Jarom Moore: Someone is offering Rudy a lot of money this offseason. Can the Jazz convince Rudy to take a little less than market value (almost certainly his max)? If so, this gets done. If he wants to be fully maxed, then I would assume the Jazz match offers next offseason. So how likely? 65% an extension happens.

Clark Schmutz: Agreeing on a contract extension with Gobert in October would eliminate $15 to 20 million in cap space next summer, so it makes no financial sense for the Jazz to agree to a deal this year. But agreeing to terms does show loyalty to Gobert and possibly sends a message to other Jazz players that the franchise takes care of its own, even when it’s financially detrimental. I would give a Gobert extension a 60% chance of happening this October.

Clint Johnson: Possible, but unlikely. Despite a still-developing game with multiple limitations, Gobert is in the max money discussion because of his unique defensive impact. The Jazz have shown that unless they get a meaningful discount on a restricted free agent (such as Favors’ rookie extension back in 2013), they are content to get an additional season’s data on a player and then match whatever the market dictates, as they did with Gordon Hayward.

Spencer Wixom: 40%. It’s in the favor of both sides to wait it out. Gobert will likely get a deal in the neighborhood of Giannis Antetokounmpo’s four-year, $100 million deal. The Jazz can likely lock Gobert down by agreeing to that deal now, but they lose a lot of cap flexibility in doing so. For Gobert, it is probably worth waiting unless he gets the full max, and for the Jazz it might make sense to wait for both financial and developmental reasons.

Dan ClaytonI guess I’ll be the lone optimist. Clark and Spencer raise a good point about cap flexibility, but I don’t think it will make a huge difference. Even with Rudy and Gordon Hayward at their respective cap hold amounts, there’s just not that much cap space left — less so when you add in draft picks, free agent cap holds, and the potential Derrick Favors renegotiation we’re about to discuss. In other words, I won’t be surprised if the Jazz choose to operate as an over-cap team with exceptions next summer. In that case, the difference between Gobert’s cap hold & new salary wouldn’t make a real difference. I think it comes down to whether he would accept a deal that is close to the max, and I still think the answer is yes based on what previous promising bigs have gotten.

2. How likely is it that the Jazz and Favors come to terms on a renegotiation + extension deal?

Note: Starting on October 16, the Jazz can add value to Favors’ remaining contract and then extend him two extra years on the basis of that new salary figure. Full explanation here.

Jarom: I once thought this was very likely and smart, then was convinced otherwise. Derrick may actually want to do what’s best for the Jazz and be here for the rest of his career (which would be incredible). It’s more likely it doesn’t happen than does, but not by much. 40% they deal this October.

Clark: If Favors wants to stay with the Jazz for four more seasons, then an R&E makes total sense for both sides. The Jazz get to lock up an important player for two extra years, potentially in a way that lessens the cap hit down the road, and Favors gets a $20 million “bonus”3 on the next two seasons that he wouldn’t get otherwise. 90% chance of a Favors R&E this fall.

Clint: Unlikely. Favors’ rookie extension was a bargain even under the old CBA; in the new agreement, it’s a steal. Fans love to talk about the players like Tim Duncan prioritizing victories over dollars, but they forgot that Duncan was one of the top ten highest-paid players in the league for seven seasons. There’s little to no incentive for Favors, who has never maxed out his earning potential on a contract and is just entering his prime, to accept less money again, even for a front-loaded deal.

Spencer: 90%. I think this is a done deal. Favors wants to be here, and the Jazz want him long term. An extension for the 25-year-old would also be great insurance in the off chance things go south with the Gobert negotiations, as you could slide Favors back to center and start Lyles or Joe Johnson. I’d be surprised if Favors isn’t locked up by the end of October.

Dan: I used to shout from the rooftops that the Jazz should wait until summer and do a three-year extension as opposed to two, but the way the cap situation is shaping up, now might be their last real chance. More to the point, Utah spent assets to create extra cap room, a clear sign that there’s a tangible plan to do something with it. I think this is it. Maybe these were the “decisions” Fav was coyly tweeting about?

3. How likely is it that the Jazz and Hill come to terms on a R+E deal this fall?

Note: The Jazz could actually R&E Hill at any point between now and February 28.

Jarom: 15%. I would assume Hill wants to actually play with the team. He hasn’t built up that loyalty like Favors has and while being quickly a Jazz guy4, I think this it’s likelier that he re-signs next offseason.

Clark: The Jazz don’t have enough remaining cap room to R&E both Hill and Favors, and it makes little sense for the Jazz to make a long term commitment to Hill before they see Dante Exum return to the court. I’d give a Hill R&E 1% likelihood — so yes, I’m saying there’s a chance.

Clint: Very unlikely. While I suspect Hill may still exceed expectations as a difference-making addition, such an extension doesn’t make sense in this context. The Jazz already have more young talent than they can possibly retain long term without moving deep into the tax. Hill would demand (and deserve) numerous years and money in line with the new CBA math. Would the Jazz offer that contract, which might cost them Exum or Rodney Hood, based primarily on the anticipated impact of Hill? I don’t see it.

Spencer: 20%. I don’t see this R&E happening. Hill and his agent noticed that veterans are still getting paid in this market — like $72 million for Luol Deng — and Hill will be well positioned to cash in after a strong year in Utah. Are the Jazz willing to commit Deng-style money right now, say $50 million extra over three additional years? I don’t think they are. In the end, both sides are happy where they are and will play out the year and talk when there are fewer unknowns next summer.

Dan: I figured out a way to get Favors the equivalent of a 2-year max spread over a 2+2 R&E AND still find Hill an extra $45M on a 1+35… but it puts the Jazz in the tax already next season. So this is looking pretty unlikely.

4. Which guy on a non-guaranteed contract is most likely to make the Jazz’s opening night roster?

Note: The Jazz have 20 in camp, so they must cut five players before the start of the regular season. Six players have contracts that are at least partially non-guaranteed for this season.

Jarom: I guess this answer if Jeff Withey. The top-four bigs are locks, as are at least five wings and three point guards, so that doesn’t leave many choices. Withey has experience and costs little relative to his production. I don’t think this team keeps six wings, so Chris Johnson might be done.

Clark: I think Withey is a lock to make this roster.

Clint: Withey is the only true center on the roster outside of Gobert, and in the few minutes he’s received in a Jazz uniform6, he’s consistently performed well. Fans, media and even team staff have talked about the reasons he should have played more. Also, Gobert and Favors each missed 20 or more games last season. At the very least, Withey is a contingency for that.

Spencer: Withey. Quin Snyder did show some reluctance to play Withey last year, but the one area his team lacks depth is at center. Withey is the best rim protector on the roster outside of Gobert, and will be called upon should Rudy miss any extended time.

Dan: I’ll make this an easy one and agree with those smart fellas.

5. Is there a guy on a guaranteed contract that has some possibility of being cut?

Note: Any guaranteed amount owed to a player who is cut would still be owed the player, and would still count against the Jazz’s cap sheet.

Jarom: No? I don’t think they will cut anyone, but they could trade Raul Neto or Shelvin Mack. The idea of pushing either off to Cleveland could be a good idea. But ultimately I don’t think this happens.

Clark: I don’t think a player with a guaranteed contract gets cut, but I’d venture there is one more trade in the next six months.

Clint: No. This goes against something deep in Jazz DNA. Seeing contracts to their end is a franchise imperative, both as a business ethic and an element of trust. It distilled over years from the philosophies of Frank Layden, Jerry Sloan, Kevin O’Connor and — most of all — the Miller family. If the Jazz decide someone is worth a guaranteed contract, they hold their end of the bargain. It would take a truly toxic personality to make an exception, and thankfully this roster doesn’t appear to have that.

Spencer: Joel Bolomboy. Don’t stone me, WSU fans! Bolomboy will in all likelihood make the roster, but he does have some factors working against him. Favors, Lyles, Johnson, Boris Diaw, Hayward and Joe Ingles can all play some power forward, and that’s Bolomboy’s only real NBA position. He’ll spend a lot of time in the D-League this year, but if injuries come up at other positions and the team needs to add a player, his roster spot could be in jeopardy.

Dan: It won’t happen, but Neto is the fourth option at a pretty deep position. If the Jazz needed to create a roster spot but eating some guaranteed money — like they did with Carrick Felix and Grant Jerrett — Neto’s $938K is palatable. But like Jarom, I think Utah would likely find a taker for either Neto or Mack before it came to that.

One Comment

  1. Jeremy says:

    Isn’t Hayward’s current contract a mini-max, as in the most he could get as a restricted free agent, but could have gotten more from the Jazz? So if Rudy were a restricted free agent next summer, it would be advantageous for the Jazz to pay the mini-max, but that risks losing him to unrestricted free agency later?

Leave a Reply

Your email address will not be published. Required fields are marked *