Multi-Year Madness: Jazz Sign Two to Deals

(Photo by Garrett W. Ellwood/NBAE via Getty Images)

Jack Cooley and Christapher Johnson just inked what are being termed “multi-year contracts” with the Utah Jazz. After playing just 26 minutes to date for the team¹, Cooley reaped a similar reward to those of Bryce Cotton and Elijah Millsap before him. And for Johnson, it’s a reunion of sorts after the swingman played on a 10-day contract but was released just before the trade deadline.

It may seem odd to the see the Jazz make a long-term commitment to a guy who has so far mostly appeared as a garbage-time bruiser and a guy they already bid farewell to once this year. But because of how the deals are structured, they barely differ from a rest-of-season contract except in ways that give the Jazz another tool to work with this summer.

The deals that all four players signed were guaranteed through the end of this season, reportedly with two non-guaranteed years to follow. So they are “multi-year” pacts by definition, but don’t actually represent a commitment beyond June 30.

That means that the only absolute cost associated with Cooley’s new contract is the prorated rookie salary for the final 20 or so days of the season: about $62,000 in total. The Jazz would have paid the same amount if they had found another rookie free agent to sign to successive 10-day contracts to finish the season. Johnson, with two years experience, will cost a little more, but the principle is the same, as it is with Cotton and Millsap: they’re paying a paltry amount per game to have these guys under contract through the end of the season, with no actual commitment to them beyond.

They’re essentially playing on fancied-up 20-day contracts that give Utah all the control over when those relationships ends.

So it’s not like they’re making a long-term commitment to these guys, any more than Donald Trump makes a long term commitment when he agrees to an umpteenth marriage along with a hefty pre-nup. “Til death to us part… or until I decide to move on. Whichever comes first.”

So why even add the non-guaranteed extra years? Well, the obvious answer is that it gives them the option to keep guys they like for cheap or send guys moving along if they don’t fit into the long-term plans. But there’s another astute way that these contracts can be used that might matter this summer.

Non-guaranteed salary can still be included in trades for salary-matching purposes, and then the receiving team has the ability to decide whether having a young player at the minimum salary is interesting to them.

Those types of contracts are often sought after because they help even things out to facilitate a trade, but without shackling the receiving team to a salary commitment. Trevor Booker’s 2015-16 situation is similar: while he has $4.78 million coming his way if he plays the full year on that contract, only $250K is guaranteed. The Jazz appear to really like Booker, but having that as an additional option to make deals doesn’t hurt.

There are a number of ways those guys could be used in trades. The Jazz could trade those five straight up for somewhere around $20 to 21 million² if somebody were willing to unload a talented player in exchange for a pick and a salary dump. Or they could combine a couple of these guys with a player a team wants. Alec Burks (9.46M) and a couple of the rookies could net Utah something like $23 million worth of contracts. Trey Burke (2.66M) plus Booker could allow them to bring back something like $19.3 million.

The key is that these guys add flexibility to trades, the same way erstwhile Jazz man Malcolm Thomas was used in two trades last summer and then waived at no expense to the ultimate acquirer, the Boston Celtics.

(Because of the timing of their signings, Cooley and Johnson cannot actually be traded on draft day. But teams often work around this by agreeing to the framework of a trade, having a team pick for them and announcing it later.)

So why would a player agree to that type of deal, ceding all liberty and giving a team complete control over their fate, including to tack them on in trades only to be waived? Simple: money. If those are the terms you have to agree to in order to get an NBA contract, you do because even on a short deal the money is far better than in the D League, where players make $13 to 25.5K per season. It makes it worth the risk of giving a team all the control over your future. Just between now and April 15, Cooley will have made as much as he would in two to four YEARS in Idaho, and for Johnson it’s about seven seasons worth of D League work. This also increases the chance that they’ll be in some NBA team’s preseason, which helps his prospects and visibility. He gives up a little freedom by agreeing to the deal, but also gets to be financially far ahead of where he would be if the Jazz never made the offer to begin with.

As an under-the-cap team, most of the benefits of throwing these guys into the deal also could be realized just as easily by having the cap space in the first place. But having them signed on non-guaranteed deals is a better chip than having cap space, because then you have a couple of different kinds of currency: you can sell these guys’ merits as players, you can dangle them as salary-shedding options, or you can cut them yourself and use the salary space directly. Also, they can use those players for salary matching even after they have reached the cap again. So it creates options and removes none.

Also, the Jazz are required to send something back in a trade, so having four non-guaranteed, minimum-level guys for a team to choose from is significantly better for Utah than having to tack on a pick or one of their overseas rights guys.

So exactly how much room will Utah have this summer? Even if we assume we know the cap is $67 million, the answer to that question depends on a few guys who affect the Jazz’s cap math in different ways. Eight fully guaranteed players are owed a guaranteed $46.8 million. Beyond that, it gets murky.

• Those three non-guaranteed rookies each count at $845,049, and Johnson at $981,348, until they are waived. If they are on the Jazz’s roster at the beginning of the season, they will earn a prorated amount per day until January 10³ when all contracts become guaranteed for the rest of the season.
• Booker counts at his full $4,775,000 if he’s on the roster past July 15. If the Jazz release him before then, he counts at $250,000.
• As an unrestricted free agent, Jeremy Evans counts on the Jazz’s summer cap at $3,410,255 until he signs for a different amount, signs with a different team, or the Jazz renounce his player rights. This is a cap hold based on 190% of his current salary⁴.
• Joe Ingles is eligible for restricted free agency. If the Jazz decide to make him an RFA by offering him the requisite $1,045,049 (his minimum salary plus $200K), then that becomes his cap number until he signs elsewhere, for a different amount, or is renounced. If the Jazz don’t offer him the QO, he will instead be an unrestricted free agent, and his cap number will be his minimum salary ($845,049) until one of those things happen.⁵
• If they keep their draft pick, that will count at $1,866,500 (12th pick) or slightly more until they sign a player, which usually happens 20% above that figure. If they trade the draft pick, this cap hold doesn’t apply.

So it depends on whose rights they want to keep intact. If they waive everybody non-guaranteed and renounce their rights to Jingles and Evans, they could have as much as about $18M⁶.

If they keep the non-guaranteed guys on the roster, draft somebody in the first round and don’t renounce SloMo and Jeremy, that costs them another $14.5M or so and they’ll start free agency with under $4M in cap room, but can clear more as it’s needed.

That’s a pretty wide range of variance, but that’s the whole point: they’ve given themselves some different avenues to either develop or acquire players, including by signing those “multi-year” deals.