The Devil’s in the (salary cap) details

It’s almost Christmas in July for all the NBA geeks out there.

The transaction season means that there are many opportunities to unleash the inner geek and delve into the details behind player agreements and team plans. Add in a new collective bargaining agreement (CBA), and this offseason has allowed for a whole new level of geekiness. This particular geek has spent far too much of the offseason with Google Sheets open in one browser tab, the transaction page open in another, and the full text of the CBA in a third.

But this is important to more than the dweebs. The rules that govern the NBA’s summer business actually affect how your favorite team is able to assemble personnel, establish an identity and plan for the future. The way deals are structured makes a huge difference in options going forward.

For people less likely to treat a 600-page document of collectively negotiated transaction rules as fun summer reading, here are the “what you need to know” details behind some of the Utah Jazz’s summer trades — or why it’s important moving forward that the Jazz chose to operate the way they did for certain transactions.

Clarkson R&E

Jordan Clarkson was already set to make $14.26 million this coming season, which is pretty good value for a 20-man scorer in today’s NBA economy. Then the Jazz pulled off the “renegotiate and extend” maneuver, using most of their remaining cap space to add $9.2 million to his current salary and then extend him based on that number.

You can look at the net effect of Clarkson R&E in one of two ways:

That’s basically the same as if Clarkson had opted out and signed a new 3-year, $51.9 million deal. That’s a very reasonable number, and right in line with what the Jazz likely offered as an extension during the season. (As a refresher, the most the Jazz could have given Clarkson on a 3-year extension offered during the season under the previous veteran extension rules was… wait for it… $51.9 million.)

But more to the point, the structure of the $51.9M deal would have had to be a classic escalating extension to reach that number on a traditional extension: his new salary would have been $16M, followed by $17.3M. and $18.6 million. By waiting and making the deal now, the Jazz had more flexibility to frame the amounts year by year in a way that could make Clarkson an extreme value contract in 2024-25 and 2025-26.

The other way to look at it is that Clarkson picked IN and then got a total of $37.6 million in new money for two more years of his services. That’s an annual value of $18.8 million in the new years, which is already a very good number. (Consider that role players like Dillon Brooks and Bruce Brown made more than that per year on new deals.) But what does that make $18.8M/year. looks even better is the fact that moving $9.2 million to this year’s cap sheet allows Utah to pay him just $28.4 million over the final two years of the deal.

However you choose to look at it, Clarkson’s cap numbers after this year ($14.1M and $14.3M) could make him one of the best non-rookie contracts in the league. If the cap jumps as much as expected in 2025-26, Clarkson will enter the 2025 offseason still just 33 and on a contract that is essentially midlevel exception money. If his production is close to last season’s level, that contract will be a huge asset.

Leftovers

The Jazz then slid Omer Yurtseven into their last remaining cap space ($2.8M). This makes sense because it keeps the “room mid-level” exception intact. We will return to that exception later.

As for Yurtseven himself, he’s… interesting. He played just 83 minutes last season, but as a Miami rookie he put up per-36 figures on 15-and-15, and his rim protection numbers (.588 opponent field goal percentage at the rim) were pretty solid. The Jazz have a lot of flexible frontcourt pieces, but only had one true center on the roster before this deal, so Yurtseven will add depth there. Kelly Olynyk will likely head into camp penciled in as the second-unit center, but if Walker Kessler should ever miss any time, the Jazz would probably take comfort in knowing they have a traditional center option in reserve.

And by the way, depth is never a bad thing, as the Jazz also have the assets and salary to match to be involved in almost any trade scenario.

Anyway, Jazz is right at the hood now, but with Room MLE left to play with.

Room MLE options

So what can they do with $7.7 million? Granted, the free agent list is a little overwhelming at this point, but that’s probably OK considering the slate. Utah is at 15 standard contracts and three two-way contracts, meaning anyone they add now requires them to waive (or trade) someone before the end of October. They probably only do if there is a clear upgrade that they could grab with the $7.7M room MLE.

That dollar figure probably isn’t enough to pry remaining restricted free agents like Ayo Dosunmu, PJ Washington or (perhaps my favorite) sharpshooter Isaiah Joe, but there are some value free agents left who might warrant part of the exception.

The other option is to stick with it and see what needs develop later. Any “buyer”-type trade the Jazz make from here would likely be a multiple-to-1 deal that would leave some open space. One way to use the space MLE is to take some shots at minimum level players, but for more years than the actual minimum salary exception allows.

A deal signed with the cap space exception can last three seasons (as opposed to the minimum exception, which allows for two), so if a young guy comes in and really shows up, the team can choose to keep him until they have full Bird rights. Usually, teams offer a little bit of guaranteed salary up front (or give him a little more than his minimum salary) in exchange for all kinds of team-friendly options and guarantee triggers, so there’s little long-term risk, but so they have the ability to control the guy’s future if he turns out to be good. That’s how OKC locked up Lu Dort, San Antonio secured Tre Jones, and so on.

So if the Jazz don’t use the $7.7M exception. all in one shot this summer, be aware of the contract length of any deals they sign later.

Trade restrictions

By virtue of the renegotiation-and-extension he just signed, Clarkson cannot be traded until January 7th. Yurtseven cannot be traded until December 15th because of his new contract, and the three first-round rookies cannot be traded until August 2nd. (Joey Hauser technically and Johnny Juzang are untradeable at all, but rarely can two be traded in August).

Everyone else on the roster is tradeable, though John Collins can’t have his salary combined in a trade between now and Sept. 7. He can technically be traded along with other players (as long as his salary doesn’t have to be combined with anyone else’s for the trade to work financially), but it seems unlikely that the Jazz would already try to flip their primary veteran acquisition.

Warranty details

By making it through Tuesday without being waived, Luka Samanic is now guaranteed $400,000 of his $2.1 million salary. spring. He will get another $200K guaranteed if he makes it to Opening Day without being cut. Kris Dunn will have his $2.6 million salary fully guaranteed if he makes it to Opening Day. According to reports, about half of Yurtseven’s $2.8 million salary is guaranteed this season. All of these players fully guarantee if they are not cut in time to clear waivers by January 10th.

Hauser, Juzang and Micah Potter have small guarantees attached to their two-way contracts ($75,000 or less), but those deals don’t count against the cap. They could be cut at any time without affecting Utah’s cap sheet.

Urgent Halloween

The Jazz have until Oct. 31 to decide whether to exercise third-year options on Walker Kessler and Ochai Agbaji to keep them under contract through 2024-25. But let me spare you the suspense: they address these possibilities.

Adieu TPEs, we hardly knew you

I’ve been asked a few times how the Jazz could use the traded player waivers they accumulated from all their previous deals. The answer is: they won’t.

In order to function as a cap room team and complete the Collins acquisition and Clarkson R&E, the Jazz had to waive the remaining TPEs. They will now start fresh with TPEs, meaning they will generate a credit every time they take back less than an individual player’s salary in return for future deals.

Extension eligible

It is the summer when Lauri Markkanen officially becomes eligible for an extension. He could — the operative word being “could” — sign an extension between August 28 (the 2-year anniversary of his current contract being signed) and the final day of the offseason. Such an agreement can continue with up to three new years until the end of his agreement.

But… not planning on it. There is very little upside to him signing an extension now, even with the new rules that allow teams to offer a higher starting point on veteran extensions. The $25.3 million that Utah could offer him as a starting point will prove to be well below the typical rate for an All-Star once the cap goes up. In 2025-26, Markkanen’s maximum salary will be around $45 million. Starting next offseason, he can put in another extension for another four years, but his starting salary will still be capped at $25.3 million. — probably too low a number to lock in an All-Star in the 20s.

The Designated Veteran triggers won’t even help the Jazz get into his price range because, as Twitter user @aJAZZfan98 reminded me, Markkanen is now ineligible for that bump because he was traded after his rookie contract.

Kelly Olynyk and Talen Horton-Tucker could both sign extensions starting in August or at any point during the season, but the educated guess here is that the Jazz will take the wait-and-see approach with the expiring contracts.

Collins and Collin Sexton will technically be extension eligible next offseason, but again, that might not be a highly likely outcome for either guy. The four players currently on 2-year contracts (Yurtseven, Dunn, Samanic, Simone Fontecchio) will not be eligible for an extension, nor can Clarkson’s contract be extended further. The five players on rookie-scale contracts will be eligible in the offseason before their fourth season: two summers away for Kessler and Agbaji, three for Taylor Hendricks, Keyonte George and Brice Sensabaugh.

Just for kicks

Something I like to keep track of is how the Jazz originally acquired their current guys.

• Originally acquired by trade: Collins, Clarkson, Markkanen, Olynyk, THT, Agbaji
• Drafted with traded picks / acquired draft rights after trade: George, Kessler, Sensabaugh
• The draft with Utah’s own picks: Hendricks
• The Jazz initially signed as free agents: Fontecchio, Yurtseven, Dunn, Samanic (and the two ways). You can choose to count Sexton here when he signed as a free agent, or above since he arrived via sign-and-trade. I generally think of S&T acquisitions more as free agent additions since Sexton after all chose to play in Utah.

Related