Q&A: Breaking Down Deals, Future Star-Hunting, Is This It?

Three Jazzmen celebrate three new contracts. (via utahjazz.com)

The Jazz are mostly done with their 2018 offseason. Salt City Hoops readers, on the other hand, are not.

There were still a ton of great questions in this week’s offseason Q&A. Specifically, readers wanted to hear more about the deals signed by Utah’s incumbent free agents, and also had questions about how to secure Ricky Rubio’s future, about future targets, and about whether or not the Jazz are done transacting.

Dive in!

Did the Jazz overpay Derrick Favors & Dante Exum?

@_am_h

I don’t think so, and in particular, I think the contract details that have come out about both guys make them look like very good deals.

Exum’s base salary is $27.3 million, which is right in the range most people foresaw and basically equates to an Mid-Level deal. (An MLE contract from another team would have come to $27.1M.) Utah basically gets him on a deal as though they’d matched an offer sheet starting at the MLE, as far as his base. And if he makes the extra $1.9M per season, it’s because he is performing at a level where you don’t mind paying him up to $11M per season. My educated guess: the half million of likely incentives for Exum are probably based on him participating in some form of development program. That means the other $1.4M would be contingent upon some sort of performance threshold. We don’t know the details yet, but it’s safe to assume that if Exum is earning that extra $1.4M check, it’s good news for Utah, basketball-wise.

Same logic applies to the $2.8M of yearly incentives in Favors’ contract. His $16M base salary is a little richer than what I had forecast, but that extra cash bought the Jazz a completely non-guaranteed second year. I had guessed on a starting Jazz salary of up to $15M¹, but I wouldn’t consider $16M base an egregious overpay, since the Jazz bought some extra 2019 flexibility for that extra million. And, as with Exum, if they’re paying the extra $2.8M, it means they’re getting a high-performing Favors.

I will say this: the percentage of each guy’s salary that is incentive-based — 17% for Exum and 15% for Favors — is pretty significant. I’ll be interested to find out exactly what those are tied to.

Raul Neto’s deal was also very reasonable: at $2.1M per season base, that’s just a few hundred thousand over Neto’s minimum salary. The deal also includes $50K of likely incentives (again, probably development-related) and $50K of unlikely bonuses (probably stat-based), as well as a July 6 guarantee date on year two.

Explain more the significant of these incentives in regards to the cap. When do the incentives “hit” the cap?

@lairddoman

Performance incentives count against a team’s salary cap when they are considered “likely,” which means a level of performance the player hit the previous season. Unlikely incentives aren’t counted initially, with two caveats. 1) Likely and unlikely incentives are included when calculating whether a team is over the “Apron.” That way a team that is subject to a hard cap at the Apron wouldn’t spend money thinking it was safe, and then accidentally (and illegally) go over if a guy reaches the performance threshold. 2) Incentives that are paid will count on a team’s salary at the end of the year, so if you’re trying to stay under the tax, it’s better to budget as though they will be paid out.

So, is that it? No more moves? I understand it, but it’s kind of frustrating seeing nothing new.

@JazzNationBr

Wouldn’t a changeless Jazz roster equal too much risk in a really loaded Western Conference?

@_am_h

So first of all… yes, it sounds like the Jazz are pretty much done, barring a too-good-to-be-true trade offer falling into their laps.

And I understand both of your trepidation — after all, it’s more exciting and comforting when a team makes moves. But the Jazz decision-makers think they can be significantly better than last year without a major roster overhaul, and they might be right. That doesn’t mean they’re simply betting on internal improvement, either. What they’re really betting on is that the baseline of this team is better than their final 48-34 record. Their approach this offseason shows that they believe their point of departure is much closer to the 29-6 finish than to the season overall. Rudy Gobert missed a third of the season, Thabo Sefolosha missed half and Dante Exum missed all but 14 games. Their best offensive player was still learning up from down, even while averaging more than 20 a game, and Jae Crowder joined the team with two months left.

So they’re trusting that there’s value in seeing what a healthier version of this group could accomplish, while keeping their options open for later. Of course, there’s no guarantee that staying the course will yield amazing results, but I’ve seen several models that project the Jazz as a top Western Conference team.

Is there any upside in not using our $8.6 million Mid-Level Exception this Summer?

@zarinf

Well for starters, I don’t know who they’d spend it on. The MLE won’t be enough to get the big-name restricted free agents away from teams with matching rights. And the unrestricted guys still available would be depth pieces at best. For example, Greg Monroe and Alex Len are traditional centers, and the Jazz are a team with all of its center minutes pretty much spoken for. Wayne Ellington is a really good shooter, but Utah already has like seven guards. 

There’s also something to be said for flexibility. Keeping the MLE on the shelf keeps salary off of the 2019 books, and it also keeps options open to swing an uneven trade without crossing over into the tax. But mostly, I think it just comes down to the fact that the Jazz like their depth across all positions, and they’d prefer not to pay $8.6M to someone who doesn’t really represent an upgrade.

Since the Jazz have some cap room to spare (if Georges Niang is our 15th), do you expect a front-loaded Ricky Rubio contract extension this summer or is it too early/unwise to make that commitment considering Exum’s future?

@Sporkaccione1

Do you think a preseason Rubio extension is possible?

@kja2064

Well for starters, Spork, the Jazz don’t have cap space this summer, so they can’t do a renegotiate-and-extend deal where they bump his 2018-19 salary and then base an extension off of that amount. The most they could offer in an extension would be an extra four years, starting at $17.9M.

It’s possible, but I think the Jazz would prefer to go into next summer with options. If they extend Rubio at that amount, it would be hard to hit the summer with a max slot available in case the right free agent says yes. Don’t get me wrong, retaining Rubio might wind up being the right call, but I think the Jazz would like the opportunity to at least check in on some free agents before making that determination.

Speaking of which…

If Rubio is re-signed to a similar average annual value contract, will Utah still have enough room for one big FA in 2019?

@kja2064

Can Jazz keep Rubio and/or Favors and still open significant cap room or do they have to let one or both of those guys go? for next offseason

@jazzies12

If the Jazz let Favors, Raul Neto, Alec Burks, Ekpe Udoh and Thabo Sefolosha all go next offseason, would they have enough money to re-sign Rubio and still sign another freee agent to a max contract?

@dozer5001

A popular theme there.

Let’s start with what space the Jazz could create and then you can work backwards from there. If the Jazz cut everybody who’s not guaranteed (except Mitchell), and rescind all of their free agents, they’re about $49 million under, minus a cap hold for their draft pick (let’s say $2M) and five empty roster holds (~$4M total). It’s probably a no-brainer to keep Royce O’Neale at the minimum, which adds $1.6M but brings off one of those $850,000 roster holds.

So start with about $42M and work backwards depending on whom you want to keep. Keep Rubio at somewhere around his current $15M salary and you have $27M left to offer to a free agent. Let Rubio walk and keep Favors and you have $23-26M, depending on which incentives he hit in 2018-19. Keep both and you’re back to where you’d get more mileage by just operating as an exceptions team. The good news in Favors’ case is that the late guarantee on his second year (July 6) means Utah can make that decision after they see which free agents are returning their calls. 

The Jazz set themselves up to try to use their cap space next summer. Who do you think should be their top 3-5 targets?

@rflcaa

There will be a huge selection next summer, the result of a bunch of one-year signings this year. And assuming that the Jazz could be coming off another successful season with a promising core, they should be able to get an audience with some key guys.

The headliners of next summer’s free agency will be stars like Kawhi Leonard, Jimmy Butler, Kyrie Irving and Kevin Love, all of whom have player options. Karl-Anthony Towns will be restricted and thus impossible to pry away from Minnesota, as is the case with Indiana’s Myles Turner. Everyone there might be out of Utah’s reach.

From a basketball perspective, the best fits would be another big wing or combo forward type, someone who’s a dynamic scorer and can also defend. That’s why we keep coming back to names like Khris Middleton, Tobias Harris and Klay Thompson. Those would be my three guys to keep an eye on, and probably in that order. 

Next summer seems to have an inordinate amount of players due to the nature of the contracts signed this summer. How could this affect the Jazz and the league as a whole next summer?

@JazzHoopsLife

For starters, it seems like some agents are getting fired next year, right? It feels like everybody got the advice that they should just kick the can to next year to get paid, and so many dudes took that advice that now there are going to be a LOT of mouths around that trough next July. There are currently 130 players who are slated to receive at least $10 million this upcoming season, and as many as 59 of them could be free agents in 12 months. Then add in guys coming off of scale contracts — like Towns and Turner — and you have a LOT of guys expecting to be paid next summer.

It probably won’t affect free agency much at the top. Enough teams have money, and the megastars always get paid. But once you get down past the first and maybe second tiers, there’s a good chance we’ll start to see some signings that look like bargains. As always, though, it depends on how many marquee free agents stay home, because that’s the variable that determines whether 15 teams have cap room, or half that number.

When can each of the guys who we brought back be traded?

@lairddoman

Oooh, good one. 

The guys who signed free agent deals — Favors, Exum and Neto — can be traded as early as January 15. Normally, signees can be traded starting December 15, but because all three of those players signed using Bird Rights and received raises above 20%, the Jazz have to wait a little extra before they’re trade eligible.

The guys who had their contracts guaranteed — Sefolosha and Udoh — can be traded at any time. Grayson Allen can be traded starting August 1, 30 days after his rookie contract was signed.

Everybody else is fair game at any time.

What is Niang‘s nba skill that will allow him to contribute to the Utah? I agree he’s having a great summer, but he’s also 25; he should be better than most Summer League players.

@caseyadamson

In general, it’s pretty dangerous to take too much from a Summer League performance at all, and I don’t think that’s why the Jazz like Niang. They like him because he’s big, moves the ball well, is a decent shooter, and is smart. In short, he’s just really skilled for his size and knows how to get things done on the basketball court. Sometimes a player’s NBA skill is just that: being able to figure out the game. Think about it this way: four years ago, not a lot of people could identify Joe Ingles’ NBA skill, either. But the Jazz liked his mindset and his between-the-ears game, so they took a low-cost flier on him. And that panned out. They like Niang for some of those same reasons, even though it’s way early to know if he’ll pay similar dividends.

How sensitive are players coming out of their rookie deals? Granted they can get more re-signing versus a matched deal, but do you think players/agent take offense when their drafted team says, “Go find out what you’re worth?” As happened with Zach LaVine, Otto Porter or *ahem* yeah, that guy.

@iPrinceJester

That second contract is most players’ first opportunity to really get paid. So yeah, it can come off a little heavy-handed when a team overplays its considerable leverage and refuses to pay a guy a single nickel more than he can get from the open market. Rationally speaking, players can probably understand why teams don’t want to bid against themselves when there’s no need to, given how restricted free agency is set up. But emotionally, it’s certainly easy to see how it could bother a person to see their livelihood and self-worth subjected to the callousness of game theory and cap mechanics.

It’s obviously bothered Hayward — likely the object of your “ahem” — when the Jazz sent him to find a max contract elsewhere instead of just ponying up. By contrast, this year they have a very happy Exum telling the media that he feels “taken care of as a person.” Could they have saved a few bucks by waiting for Exum to bring them an offer sheet? Maybe². But giving a player in Exum’s situation a sense of security and backing has got to be worth some dollar amount. 

Where is Jabari go considering he seems upset about his current situations. Will Jazz target him next season?

@O_Uchiy

I’d still keep an eye on his hometown Bulls and on Brooklyn, now that the latter can get to around $12M in space. If not those two, Sacramento and Atlanta are obviously getting calls from every RFA whose agent is trying to find some leverage. But ultimately, it could be a rough ride for Parker.

The Jazz are obviously intrigued by Parker’s potential to be a dynamic scorer, but it’s also fair to wonder how he’d fit in Utah’s defensive culture. I can’t get a real solid read for how interested they’d be if he became a free agent after next season, but I also think that’s still pretty unlikely. Offer sheets to RFAs have to be for two or more years, so the only way he’s a free agent next year is if he takes the paltry $4.1M qualifying offer.

If I tell you Jabari won’t sign his QO and the Hawks and Kings don’t want to spend money on him, then he must leave through sign-and-trade. Do you think Milwaukee can do a trade with us to release space (for Middleton’s 2019 opt-out)? Would the Jazz do it if they can get JP at $11M?

@Sirenazjj

I’m sure the Jazz have done their due diligence on this, so the fact that they’re not introducing Jabari at the practice facility right now tells me it’s probably not that workable. First of all, it’s tough money-wise: to get Jabari at $11M, the Jazz would have to send out at least $6.23M in salary, and the Bucks couldn’t take more than $11.78M. So the only players that work in straight-up deals are Crowder and Burks. Do the Bucks have any need for those two?

The reality is that the Bucks are in no hurry here. Every day that passes just deepens their leverage and increases the amount of sweat on Jabari’s brow. They’re in control of this situation, so they won’t accept a trade package they’re not wild about.

Understanding it’s a unique market, with so many players taking less favorable deals for them, what are your thoughts on potential of moving toward franchise expansion in the future for more potential landing spots for players?

@Dgthatisme

Yeah, I think both the league (welcome in 1-2 big markets) and players (30 more NBA jobs available) would welcome expansion under the right circumstances. It wouldn’t completely solve the specific cap shortage that led to this year’s wild rush on one-year deals, though. I catch your drift: two more teams means at least a couple of additional MLE slots each summer. But the expansion process is pretty drawn out isn’t something they could do as a quick fix for a specific micro cap environment. When the Board of Governors weighs expansion, they’re far more interested in evaluating the impacts five, 10, 20 years down the road, etc. 

Thanks all for the questions!