Extension Candidate: Klay Thompson

Klay Thompson was among several players eligible for rookie scale extensions whom I examined earlier this week, and in the weeks ahead we’ll take in-depth looks at some of them as part of our Extension Candidate Series. Thompson is also a trade candidate of sorts, but it increasingly seems as though the Warriors have no intention of parting with their sharpshooting two-guard, even if doing so would mean netting Kevin Love in return.

Co-owner Joe Lacob made it plain this spring that he’s a fan of Thompson’s, declaring in a radio appearance on 95.7 The Game in the Bay Area that the team would reach a deal with him one way or another. “We are going to re-sign Klay Thompson,” Lacob said. “I will say that unequivocally.” Lacob didn’t specify whether that would happen via extension this year or restricted free agency next summer, but it nonetheless established the organization’s commitment. Not surprisingly, agent Bill Duffy is seeking the max, as could be expected when a team owner publicly vows to come to terms. Duffy has the leverage necessary to test Lacob’s willingness to either acquiesce to shelling out the max or go back on his public statements if Thompson and Duffy pass on signing an extension and find a max offer from another team in restricted free agency.

Still, the struggles that Eric Bledsoe and Greg Monroe have endured this summer in restricted free agency loom as cautionary tales for a player in Thompson’s position. Other teams could view Lacob’s comments in the same light as ones from Suns owner Robert Sarver and president of basketball operations Lon Babby, both of whom threatened to match any offer another team might make to Bledsoe in restricted free agency. It doesn’t appear as though any team has stepped forward with a max offer for Bledsoe, or at least one trumping the four years and $48MM reportedly on the table from the Suns, in spite of his immense talent. The market has appeared similarly stingy for Monroe, who doesn’t engender the same sort of concern about a short track record as Bledsoe does. The threat of the match from both the Suns and Pistons has loomed too large for other clubs to bear.

Duffy and Thompson could just as easily point to Gordon Hayward and Chandler Parsons, who wound up with max or near-max offer sheets this summer. With them, and with Parsons in particular, there was seemingly less of a chance that their original teams would match. The restricted free agency market has been turned upside-down this summer, such that Hayward, whom I ranked No. 7 in the Hoops Rumors Free Agent Power Rankings, and Parsons, who was outside that top 10, are poised to wind up with better deals than Bledsoe and Monroe, Nos. 4 and 5, respectively.

The potential for another topsy-turvy summer of restricted free agency paints Golden State’s extension talks with Thompson in a new light. The trade chatter surrounding him had already added an unusual dimension to the negotiations. The chances of Thompson signing an extension seemingly go up as soon as the Wolves trade Love elsewhere, in part because the chances that the Warriors would trade Thompson for Love would appear to go down if Thompson inks an extension. Players who sign rookie scale extensions are subject to the Poison Pill Provision that makes it difficult to match salaries in a trade. The Warriors would have a choice to make if Love remains in Minnesota by the end of October, though unless the Wolves somehow find a way to sweeten their proposals in a way that would convince Golden State to budge on Thompson, it appears that choice has been made.

Thompson might not be a superstar on the level of Love, or even an All-Star, but he’s an eminently valuable player. He, rather than Stephen Curry, often takes on the job of defending point guards, and Thompson’s three-point accuracy has helped the backcourt pairing fully live up to its Splash Brothers moniker. He hasn’t shot less than 40% from behind the arc over the course of any of his three pro seasons, and last year’s 41.7% mark established a new career high.

He fits the profile of the “Three-and-D” type that’s a sought-after commodity in today’s NBA. Thompson is also just 24 years old and has missed only one game in his entire pro career. He scored the majority of his 18.4 points per game from inside the arc this past season, so he’s much more than just a spot-up artist.

The Warriors have reportedly budgeted for a max deal for Thompson, an effort that apparently dates back to the team’s veteran extension with Andrew Bogut last October. The max that Thompson is eligible for is the smaller max, roughly equivalent to 25% of the salary cap in the first season of the deal. The value of the max won’t be known until next summer regardless of whether Thompson signs an extension or a new contract, but this season it entailed a starting salary of $14.746MM. That’s not the sort of cap-crippling figure that a max contract for a veteran like LeBron James or Carmelo Anthony would bring.

It would nonetheless be quite a bit more than the four-year, $44MM extension that Curry signed in 2012 amid fear about the long-term health of his ankles. The Warriors lucked out with that deal, and it preserves the team’s ability to give Thompson a five-year extension under the Designated Player rule. It also means that Curry can hit free agency just two years through Thompson’s next deal, when he’ll be eligible for a higher max that would help him recoup the money he missed out on in his discount extension.

Such a concern is likely one that the Warriors have considered as they’ve planned for the possibility of a max deal for Thompson. That Golden State has budgeted for a max deal and that Lacob has made pronouncements that a deal of some kind will get done would have made it unsurprising if the Warriors had signed Thompson to a max extension as soon as they could at the beginning of July. That they haven’t done so may well have connection to the Love talks, but the Warriors needn’t have made such a quick move to get him to sign even independent of trade considerations. This year’s restricted free agency market has made Golden State’s hesitancy to immediately ink Thompson to a max deal look wise. The Warriors also have the privilege of being able to offer Thompson the chance to play on a club that’s not far from title contention, a far cry from the state of the Wolves or another team to which Thompson could be traded.

That’s why I predicted this week that Thompson will ink an extension for four years and $58MM, a figure that would probably end up roughly $8-9MM less than the most he could get in a deal for that length. The four years, rather than five, would allow him to hit free agency sooner and reap a higher max, or something close to it. Signing an extension this year instead of waiting for restricted free agency would also help Thompson ensure that he won’t be traded. Sacrificing the max now would represent a giveback for Thompson, to be sure, but the benefits of doing so make it an enticing choice.