A Contract Extension for Bradley Beal? | Wizards Blog Truth About It.net

A Contract Extension for Bradley Beal?

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Updated: November 2, 2015

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The Wizards can extend Bradley Beal’s contract for four years beyond next season (2016-17), making him a Wizard through 2020-21 by 11:59 EST on Monday night.

NBA teams are allowed to designate one player for a five-year extension, but that was given to John Wall in 2013. The first year of that extension kicked in last season (25% of the cap at $14.746 million, per CBAFAQ.com), meaning Wall is signed for four more seasons in Washington (including this one) through 2018-19.

If the Wizards extend Beal by Monday’s just-before-midnight deadline, he is eligible to receive that four-year deal worth a maximum of 25 percent of the salary cap in the first season with max annual raises of 7.5 percent. The salary cap for 2015-16 came in higher than expected at $70 million. But if Beal signs a max extension now, the 25 percent of the salary cap won’t be factored until the 2016-17 numbers are set, when the cap is expected to rise to $90 million.

In late-September, Beal claimed that the Wizards had not yet offered him a contract extension, while the Washington Post‘s Jorge Castillo reported, “not what I was told.” Perhaps Beal meant that the Wizards had not offered him a max extension, which seems likely given that they might not think he’s worth the max just yet. (Times could be a-changing.)

There are a couple reasons why the Wizards would not extend Beal now:

  1. Beal has yet to prove his durability. He has already been slipping and sliding and getting banged up this season. A smart investor would wait a season to commit money when rules exist to help prevent said investor from losing his investment. That is, if the Wizards don’t extend Beal now, but do extend the qualifying offer before June 30, 2016—they would have the right to match the contract of any team that signs Beal to an offer sheet next summer.
  2. It saves the Wizards money. If they don’t extend Beal now, his cap hold going into next summer will be around $14.2 million (per Nate Duncan at Sports Illustrated). A cap hold acts as a placeholder for salary cap purposes when a team is expected to resign their own player. Beal’s hold is expected to be below his market value, which the Wizards would aim to use to their advantage in free agency next summer.
  3. Speaking of that… Agreeing on an extension now moves Beal’s cap hold toward the $21 million mark, meaning that waiting provides the Wizards with almost $7 million more in flexibility next summer. That could be significant. Also in re-signing Beal to an extension in 2016, the Wizards could exceed the salary cap, but not when they sign free agents who played for another team this season. Or those $7 million could be the difference in being able to retain Kris Humphries at a very affordable rate of $4.6 million for 2016-17 instead of renouncing his rights to gain cap room like the Wizards would likely have to do with free-agents-to-be Nene and Jared Dudley, as well as those on non-guaranteed deals like Martell Webster and Drew Gooden (if they want to chase other free agents like Kevin Durant or Al Horford). The timing matters, here, and the Wizards will have more options if they wait.

Why the Wizards do want to extend Beal now:

  1. He’s looking like a star so far, and a very early candidate for Most Improved Player. The Washington franchise has long flubbed the retention of home-grown, talent and the regime of Abe Pollin was known to haggle for contracts to be below market value (Pollin made Juwan Howard cry!—but it was all good, because that led to the NBA’s rookie salary scale, which is a win for teams, and fans). Beal damn near fell into Washington’s lap in 2012 after they landed Wall in 2010 and missed on Jan Vesely in 2011. The Wizards would be wise to keep one of their sons happy with the promise of maximum dollars now in exchange for #MaxEffort in the future.
  2. Because… Beal could very well be one of those players who suddenly wonders what the grass would be like if he got a team all to himself (or so the sales pitch would go). If he was courted and wined and dined like the most attractive of free agents, which is totally possible even in the Summer of Durant when so many teams will have almost a billion to throw around, one could see Beal being ‘that guy’ with an ego rising with his game. It’s only natural, most of the time. (Plus, it seems more likely than not at this point that Durant re-signs to hang tight with Russell Westbrook—for one more season, at least, so Beal could be the first priority for a lot of teams.)

Renowned NBA reporter and local Washingtonian David Aldridge concedes that the Wizards’ plan “makes sense,” but that it’s still a gamble. This sentiment made its way across the Twitter as Beal looked to be taking the game over against the Knicks on Saturday.

Aldridge followed up his thought by pointing out the time when Houston lost the services of Chandler Parsons, 2011 second round pick (out of Florida), who became a budding star.

Houston surprised many when they declined a $964,750 option for Chandler Parsons for 2014-15, allowing him to become a restricted free agent that summer. People figured that the Rockets would simply match whatever offer Parsons got. Marc Cuban and the Mavs then swooped in with a three-year, $46.1 million contract, and the Rockets—chasing Kyle Lowry, Carmelo Anthony, and Chris Bosh in free agency—decided that the high price tag for Parsons was not worth the handcuff. Instead, when they missed out on bigger names, Houston signed Trevor Ariza for four years and $32 million (probably the better move). Parsons, for what it’s worth, has the same agent as John Wall (Dan Fegan, who also represents Dwight Howard, Demarcus Cousins, Martell Webster, and Drew Gooden).

Aldridge had one more point to make:

One can certainly appreciate the money that’s invested in simply investigating ways for NBA teams to be creative these days. Don’t discount another team’s ability to throw a “poison pill” contract Beal’s way and for him to sign it, even knowing the Wizards would likely match but that said contract might hinder the team’s flexibility going forward.

But let’s not kid ourselves. These two situations are very different. Houston had cornerstones in James Harden and Dwight Howard when they elected not to match the contract extended to Parsons by Dallas. Rockets GM Daryl Morey said he didn’t do it because Parsons’ contract was “untradeable.” If anyone should know about finding ways to trade the untradeable, it should be Morey. Perhaps he is only trumped by Ernie Grunfeld, who found a way to trade Gilbert Arenas and Rashard Lewis—part of the fruits from those series of trades still resides on the Wizards in Marcin Gortat.

Sure, the Wizards will be going after the ultimate cornerstone in Kevin Durant, but everything else on the roster has been set up to allow them to retain Beal irrespective of Durant’s decision. (There are only four guaranteed contracts for next season: Wall, Gortat, Otto Porter, and Kelly Oubre.)

Maintaining flexibility so the Wizards can set the highest ceiling possible while Wall and Beal are still in their primes by not signing Beal to an extension now is the right gamble to make. Beal is a cornerstone—well, likely. As mentioned, the Wizards are performing their due diligence by allowing time to help them make a final determination. Rest assured, if Beal continues on his current path to the top, the Washington Wizards won’t ever let their Big Panda go.

UPDATE #1: Aldridge on Monday morning reports that Beal won’t be extended (with a max deal or otherwise), and so the Wizards continue with their wise plan, as risky as it may be. You can read more from D.A. on NBA.com.

 UPDATE #2: The Washington Post’s Jorge Castillo also notes that once Beal’s rookie deal runs out next season, without an extension, Beal will no longer be subject to the NBA’s limitation on rookie year extensions. Each team may only extend one rookie year deal at a time for five years (the Wizards have designated Wall in that capacity). However, like Jimmy Butler, once Beal’s rookie deal runs out, he’ll be eligible for a five-year max deal independent from an extension.

 

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Kyle Weidie
Founder / Editor / Reporter / Writer at TAI
Kyle founded TAI in 2007 and has been weaving in and out the world of Wizards ever since, ducking WittmanFaces, jumping over G-Wiz, and avoiding stints on the DNP-Conditioning list. He has covered the Washington pro basketball team as a member of the media since 2009. Kyle lives in D.C. with his wife, loves basketball, and has no pets.




  • Llaarryy

    Some speculated earlier that this could be the same kind of wink-wink type of deal that Kawhi did last year with the Spurs, postponing the extension so that a guy like Lamarcus Aldridge could be signed. The benefit to the player is to get a bigger max deal.

    My questions are: 1. Anything in the grapevin indicating this is a similar situation? 2. What happens if the player suffers a career ending injury before the max extension next summer can be signed?

    If the player takes on the bulk of the risk of not doing an extension now, these wink-wink deals will end after the first major injury is suffered by a player who just winked.

    • You make some good points.

      Yes, I think this is a similar trend as the Leonard deal. It looks like Detroit is doing the same with Drummond.

      The Wizards, technically, offered a contract extension to Beal … it just wasn’t the max that he wanted (I’m not sure how close it was). So, Beal is taking on risk, but somewhat by choice.

      Ultimately, it’s probably a good choice by him, too, as the risk he’s taking could likely earn him a larger contract. Plus, career-ending injuries aren’t as much of a factor as they used to be … at least not for young guards like Beal.

      I’m not sure such ‘wink-wink’ deals, as you say, will ever end, but do wonder if the next CBA is adjusted so that stars nearing the end of their rookie contracts don’t have a Cap Hold below their market value, and thus creating less of an incentive for teams to wait for salary cap purposes.

      Thanks for reading.

      -Kyle

      • Llaarryy

        Well let me say this was a well written article, and I’m not even a Wizards fan.