In their latest Collective Bargaining Agreement, which went into effect in 2017, the NBA and NBPA relaxed the rules for veteran contract extensions and introduced the “super-max” extension. The changes made it easier for players to qualify for extensions and ensured that many of those players wouldn’t necessarily earn more money if they waited for free agency.
As a result, the number of veteran stars agreeing to extensions prior to free agency has increased in recent years. Already this offseason, for instance, 10 players have finalized veteran extensions, and many of those players – including Stephen Curry, Kevin Durant, and Joel Embiid – are among the NBA’s biggest stars.
Under the previous CBA, there was little incentive for most veteran stars to get a deal done early. For instance, as Bobby Marks of ESPN (Insider link) writes, after Durant won his MVP award in 2014, the Thunder could’ve only offered him a two-year, $44.9MM extension. If the current rules had been in place, a four-year, $139MM offer would’ve been possible. Or Durant could’ve signed a five-year, $178MM extension with Oklahoma City a year later.
While we don’t know if Durant would’ve accepted such an offer, we do know that opting for free agency was, at the time, the only viable path for him if he wanted to maximize his earnings. That opened the door for him to leave Oklahoma City for Golden State as a free agent.
“The extension rules have been a game changer to teams,” an Eastern Conference GM told Marks. “At least we are not caught off guard now if a player does not want to stay.”
As Marks details, players have become more inclined to lock in their lucrative long-term contracts early, knowing that if they do eventually want a change of scenery, there are ways to put pressure on the team to try to make that happen. Ben Simmons is currently pushing the Sixers to trade him with four years left on his contract, while it looked briefly this summer like Damian Lillard – who has four years left on his deal with the Trail Blazers – might take the same path.
“I always tell my client to take the money now in an extension and worry about the future later,” one agent said to ESPN. “We can always force a trade later and it would be reckless giving up guaranteed money now.”
With stars increasingly more likely to agree to extensions, we’ve seen fewer big names change teams as free agents as of late. In 2020, Gordon Hayward – coming off an injury-plagued stint in Boston – was the biggest star to join a new team as a free agent. This offseason, that honor may belong to 35-year-old point guard Kyle Lowry. And the list of free agents for 2022 isn’t exactly loaded with star power — James Harden, Kyrie Irving, Bradley Beal, and Zach LaVine are the most noteworthy names, but Harden and Irving seem likely to agree to extensions this fall, and it’s possible Beal will too.
It wasn’t long ago that teams deliberately hoarded cap space in the hopes of making a run at star free agents, but that approach hasn’t really paid dividends during the last couple summers and is perhaps falling out of fashion.
“You are naive to think that the best way to build your roster is through free agency and not the draft and trades,” a Western Conference GM told Marks. “Preserving cap space and waiting for that next great player to become available will get you fired.”
As Marks notes, it remains to be seen whether this is a short-term trend or a sign of things to come, especially since we don’t know how certain rules could be tweaked in the next CBA. Still, given how many of 2022’s potential star free agents have already come off the board and how few teams project to have significant cap space next offseason, it doesn’t look like this trend will reverse in the immediate future.