As we look for clues in Deron Williams' quotes, tweets, and summer travel plans to try to determine where this summer's top free agent might sign, it's worth examining exactly how his options break down financially. A number of reports in the last week or two have suggested that the Nets have the advantage over other teams since they can offer him five years and $109MM, as opposed to the four years and $81MM everyone else can offer. Those numbers, and perhaps the argument itself, aren't entirely accurate, so let's take a closer look at Williams' options for a maximum contract this summer.
As I outlined last week when I explained the idea of a maximum salary in the NBA, a player with Williams' NBA experience (seven years) is eligible for a starting salary worth 30% of the salary cap. In 2011/12, that amount was $15,506,632, and it's unlikely to rise in 2012/13. A player's maximum salary can never be less than 105% of his prior salary, and since Williams' 2011/12 salary was $16,359,805, he'll be eligible for a starting salary of $17,177,795 (105% of $16,359,805).
A free agent with Bird rights can sign a contract for up to five years with 7.5% raises with his previous team, or four years and 4.5% raises with a new team. So here's how the breakdown of a max contract would look for Williams, as confirmed by CBA FAQ author Larry Coon:
So Williams' options for a max contract this summer are re-signing with the Nets for five years and about $98.77MM, or signing with another team for four years and about $73.35MM. However, leaving Brooklyn doesn't necessarily mean that Williams will "lose" $25MM. While it's true he'll make that extra $25MM in guaranteed money, there's a very good chance he'll make most of it up in his next contract.
Looking at just the first four years of each hypothetical deal, Williams would earn $76,441,187 in Brooklyn and $73,349,185 elsewhere, a difference of only about $3MM. It's possible that an injury or decline in performance would mean Williams would have to take a pay cut on his next contract, but if he were to sign with a non-Brooklyn team this summer and ink another max deal in the summer of 2016, he'd be eligible for a starting salary of $20,471,637. Add that to his four-year salary of $73,349,185 and his five-year total would be $93,820,822, about $5MM less than he would have earned with the Nets.
It's true that Williams would be giving up some money if he were to leave Brooklyn in free agency this summer, but the difference isn't significant enough that it should be the deciding factor in his decision. After all, if money were Williams' only concern, he'd be best off exercising his $17,779,458 player option this summer — playing the final year of that contract and signing a max deal next offseason would result in his biggest payday.
makes sense.