New CBA rule: Designated veteran extension

[saltlover]

While the new CBA hasn't been officially released, one new nugget that's supposedly in it is called a "designated veteran extension."  The current CBA has a designated rookie extension, that allows one rookie extension during the length of the CBA to be signed for 5 years instead of four, and potentially for a higher dollar amount than the 0-6 max if you meet certain performance qualifications.  Examples of players who've signed such deals include Russell Westbrook, Kyrie Irving, Damien Lillard, and Anthony Davis.  Kevin Love's divorce from Minnesota started because they wouldn't give him the 5-year deal (they wanted to save it for Rubio, which was not wise.)  It really helps keep star rookies with their drafting franchise, discouraging them from ever testing free agency after their first contract.

From what I understand, the designated veteran extension will operate similarly.  It will let the team offer up to the 10-year max salary, even if the player does not have 10 years of experience.  This would have been helpful for OKC to potentially keep Durant.  It also will allow a team to offer it even if over the cap.  Previously, if a team was over the cap, the new contract could start at no more than 7.5% more than the most recent season.  If the parties wanted to create a larger raise cap room needed to be sued.  For this one special designated veteran, however, a large raise can be given even if over the cap.

This can both help and hurt the Celtics.  The bad news is that, if this extension truly exists, it is unlikely that the Kings will trade Boogie until he rejects their designated veteran offering.  In other words, if Boogie comes on the market, it won't likely be until next summer, and there's a greater chance he stays in Sacramento, due to the max salary advantage offered by this new rule.

The good news is that if the Celtics want to extend IT (or AB), they can do so next summer after spending their cap room on free agents.  What isn't clear to me is if a max deal is required for the designated veteran (it is for the rookie version).  I'm a little hesitant on paying IT the full max, personally, unless ownership gives Ainge a very large budget that includes significant luxury tax payments.  Which they might if we score another max free agent this summer, and if they're willing to spend big, all the more power to them.

Anyway, I find this new part of the CBA most interesting, and I would be somewhat surprised if Ainge didn't use it this summer on IT.

[tazzmaniac]

Designated veteran extension is only for players that meet certain performance criteria (e.g. MVP, All-NBA).  I wouldn't expect any of our players to qualify. 

http://basketball.realgm.com/wiretap/244286/New-CBA-To-Contain-Designated-Veteran-Extension-Provision

[saltlover]

Designated veteran extension is only for players that meet certain performance criteria (e.g. MVP, All-NBA).  I wouldn't expect any of our players to qualify. 

http://basketball.realgm.com/wiretap/244286/New-CBA-To-Contain-Designated-Veteran-Extension-Provision

I've also seen all DPOY and NBA-Defense listed by Woj since I posted this, and All-Star appearances worked for the designated rookie.  So it's certainly possible that some could qualify.

It's also not clear whether the performance requirements are just to exceed the max salary threshold, as it is for the rookie extension, or qualify for an extension at all.

[tazzmaniac]

Designated veteran extension is only for players that meet certain performance criteria (e.g. MVP, All-NBA).  I wouldn't expect any of our players to qualify. 

http://basketball.realgm.com/wiretap/244286/New-CBA-To-Contain-Designated-Veteran-Extension-Provision

I've also seen all DPOY and NBA-Defense listed by Woj since I posted this, and All-Star appearances worked for the designated rookie.  So it's certainly possible that some could qualify.

It's also not clear whether the performance requirements are just to exceed the max salary threshold, as it is for the rookie extension, or qualify for an extension at all.

Regardless of the details, I don't see where it will benefit us.  We can already pay more than enough to keep our players if we want to overpay.  It is going to reduce even further the chance of stars actually becoming available in free agency. 

[saltlover]

Designated veteran extension is only for players that meet certain performance criteria (e.g. MVP, All-NBA).  I wouldn't expect any of our players to qualify. 

http://basketball.realgm.com/wiretap/244286/New-CBA-To-Contain-Designated-Veteran-Extension-Provision

I've also seen all DPOY and NBA-Defense listed by Woj since I posted this, and All-Star appearances worked for the designated rookie.  So it's certainly possible that some could qualify.

It's also not clear whether the performance requirements are just to exceed the max salary threshold, as it is for the rookie extension, or qualify for an extension at all.

Regardless of the details, I don't see where it will benefit us.  We can already pay more than enough to keep our players if we want to overpay.  It is going to reduce even further the chance of stars actually becoming available in free agency.

If you do not have to give the max to your designated veteran, it could allow the Celtics to pay IT more next year, saving on future years.  For example, suppose the 30% max in 2018 is projected to be $30 million.  Over the course of a 4-year deal signed in free agency, he could make about $130 million.  Let's also suppose the Celtics and IT believe he has a very good chance of the max.  So that means that from 2017-2022, both sides might think that IT could make about $136 million, including the $6 million he is owed next season with the 4-year deal signed the following free agency.  If they signed a 5-year deal next summer, they could probably save about $5 million per year over the same time period that his free agency deal would cover.

Now, $5 million may not sound like much, but there is valid concern that the Celtics cheap contracts are ending soon, and key players will walk away because at a certain point the Celtics will have a budget.  $5 million a year might keep the team under the apron, avoiding the hard tax, or save $10+ million in luxury taxes.  Before too long the Celtics will find themselves constrained by budgets -- which they haven't been in quite some time.  Any ability to shift some of the current salary discounts to future years could prove to be very useful.

Also, while it's true that it could keep free agents off the market, as I started the entire post out regarding Cousins, I think that after summer 2017, the Celtics will enter a new period of never having cap space, so a dearth of stars in free agency, which is already largely the case, is unlikely to actually affect us.

(Additionally, the point isn't to debate about what IT could actually make.  I think we can all agree he's a bargain now.  The point is that, if a max salary isn't required for the designated veteran, there is an ability to create future savings.  What IT should get in his next deal is a flash point around here -- I'm just saying this rule could allow him to take several million less per year.)