For Bucks fans, June 30, 2020, is an important date on the calendar. It’s the start of NBA free agency, and it could be the moment reigning MVP Giannis Antetokounmpo signs his five-year, $253.75 million supermax extension with the Bucks.
But now that date may not mean much.
The global pandemic due to COVID-19 has made events in the next few months questionable. At this point, there is no way of knowing what will be happening on that date, but it seems likely free agency could be delayed.
The timing is far from the only thing surrounding Antetokounmpo’s decision regarding his supermax extension. To help make sense of it all, The Athletic Wisconsin reached out to The Athletic NBA’s cap expert Danny Leroux.
The Athletic Wisconsin: Projecting when the NBA will get back on the floor and when the next financial year begins is a fool’s errand. There is no way of knowing what might happen in the next few months, but we do know that the salary cap will be affected by the long layoff we’ve already seen and continue to see.
Some contracts would not be affected by a lower cap figure due to being a set dollar amount. But Antetokounmpo’s supermax total is based on an annual salary that comes from a percentage of the salary cap and then eight percent raises each year. How could we see that total impacted?
Leroux: The good news for Antetokounmpo is that designated veteran extensions rely on the first new year of the contract independent of when they agree to the deal. That is arguably more significant in this specific circumstance than almost any other time in NBA history because of the uncertainty we face over the next year or so. Antetokounmpo is already under contract for the 2020-21 season so a designated veteran extension would not kick in until the 2021-22 campaign. The world and league may be still feeling ripple effects from COVID-19 at that point, but it is far less likely to affect the salary cap and thus his contract value.
While nothing is certain at this time, it is fair to assume that the 2021-22 season is far enough out that it will be “normal,” potentially the first 82-game slate since before the pandemic. The collective bargaining agreement relies on the prior season’s basketball-related income (BRI) to calculate the following season’s salary cap but the players and owners also can agree to a different cap value if desired.
In this case, both sides would be strongly motivated to figure out a reasonable cap number because underpaying the players relative to the BRI generated in that 2021-22 season would create a shortfall to the players and a cap spike in 2022. We already know the value of the national TV contract and will know all the local TV deals by then too, so expect a fair and substantial number.
That is good for Antetokounmpo but also likely for the Bucks because a higher 2021-22 cap means a larger difference between what they can offer and what everyone else can bid. After all, Milwaukee can pay him 35 percent of the cap for five years with 8 percent raises while every other team can only offer 30 percent of the cap for four years with 5 percent raises.
The Athletic Wisconsin: Before the 2019-20 season began, we detailed just how much larger the Bucks’ supermax offer sheet is than what other teams can offer Antetokounmpo. The projected numbers may be lower than what was projected last summer as the world recovers and the league’s financial future becomes clearer.
| BUCKS | OTHER TEAMS | |
|---|---|---|
Year 1 (2021-22 – Age 27) | 43,750,000 | 37,500,000 |
Year 2 (2022-23 – Age 28) | 47,250,000 | 39,375,000 |
Year 3 (2023-24 – Age 29) | 50,750,000 | 41,250,000 |
Year 4 (2024-25 – Age 30) | 54,250,000 | 43,125,000 |
Year 5 (2025-26 – Age 31) | 57,750,000 | N/A |
Total | 253,750,000 | 161,250,000 |
The difference between the offer sheets is staggering. $92.5 million is a massive amount of guaranteed money to give up. Some will point to one deal being five years and the other offers only being four years, but even if you take out the $57.75 million in Year 5 (which is a massive year to remove), there is still a $34.75 million difference in the first four years.
The financial advantages of signing with the hometown team as an MVP winner are clear when signing an extension eight seasons into your career. Some of the differences between what the Bucks could offer as opposed to other teams in the league disappear following Year 10 though.
With the league possibly still recovering financially in the 2021-22 season, is there any reason to believe Antetokounmpo might be better off signing something like a two-year deal with a player option for the third year to get him to the 10-year threshold?
Leroux: Oh, absolutely. You are right to mention the financial margin between the designated veteran extension and what Antetokounmpo can get elsewhere, especially emphasizing the big gap in the first four seasons, but remember how much control he would cede to the Bucks in exchange for that payday.
The growing prevalence of short-term contracts for superstars illustrates the layered priorities of superstardom in the modern NBA. That designated veteran extension is likely Antetokounmpo’s way to maximize career earnings, but those are only an element of both his overall earnings and decision-making process.
Part of the NBA’s cachet is that the landscape can change quickly. Free agency, trades and the draft keep talent moving and the shift towards shorter contracts has further amplified the whirlwind. Committing to a team for six seasons largely takes a star out of that process for better and worse. While Antetokounmpo is just 25 now and looking like an MVP contender for the foreseeable future, the designated veteran extension would lock him in until his early 30s, presumably covering the entirety of his prime.
It may end up that Milwaukee is the best place to spend those years, and it would be awesome for the Bucks and NBA more broadly to see a superstar stay in place on a perennial contender. However, how certain can he be that they will stay in the title picture? Top teams choose late in the draft if they even keep their picks and capped out front offices only have the mid-level exception to work with.
The other big challenge is the passage of time. Brook Lopez and Eric Bledsoe are already in their 30s while Khris Middleton turns 29 this summer. All three of them are under contract through at least 2022-23 but that is just halfway through a designated veteran extension. Is Antetokounmpo willing to slide all his chips for his age-29, age-30 and age-31 seasons on a single number three years early?
The Athletic Wisconsin: The quickly changing landscape is something that was brought up repeatedly last season as the Bucks dominated the regular season and people questioned their playoff pedigree. This isn’t the 1980s or '90s when teams needed to slowly build toward trying to win a championship. Teams can become championship contenders in a single season.
Unfortunately for the Bucks, teams can move just as quickly in the opposite direction, so the danger for Antetokounmpo signing on for five years (plus the one he already has next season) with a supermax extension does carry some risk for him. Veteran players like Bledsoe or Lopez could break down in a hurry, and Middleton could become less effective once he turns 30. Six years is a lifetime in the NBA.
If six years is too long of a time to trust an organization, this is the part where the chorus from Milwaukee sings, 'Why not just sign him to that supermax for two or three years if that is what Antetokounmpo wants?'
Leroux: Interestingly and importantly, there is no wiggle room in contract length for designated veteran extensions or contracts. Laid out in Article I, Section 1 (r) and (s) of the collective bargaining agreement, designated veteran extensions can only cover six seasons (counting any remaining years on the contract, so five new seasons in Antetokounmpo’s case) while designated veteran contracts must run for five seasons.
That means if Antetokounmpo wants any contract shorter than that, he cannot get the 35 percent max until 2023-24.
The Athletic Wisconsin: This was an interesting conversation. The goal was to elucidate how the supermax extension option has changed for Antetokounmpo and the Bucks in the last month. But the last half of this discussion shows that the decision will be about how much trust Antetokounmpo has in the organization to remain one of the top teams in the NBA going forward.
The dollar figures may change and the economic outlook of the league could shift, but he will ultimately decide what's best for him and his family.
For Bucks fans, June 30, 2020, is an important date on the calendar. It’s the start of NBA free agency, and it could be the moment reigning MVP Giannis Antetokounmpo signs his five-year, $253.75 million supermax extension with the Bucks.
But now that date may not mean much.
The global pandemic due to COVID-19 has made events in the next few months questionable. At this point, there is no way of knowing what will be happening on that date, but it seems likely free agency could be delayed.
The timing is far from the only thing surrounding Antetokounmpo’s decision regarding his supermax extension. To help make sense of it all, The Athletic Wisconsin reached out to The Athletic NBA’s cap expert Danny Leroux.
The Athletic Wisconsin: Projecting when the NBA will get back on the floor and when the next financial year begins is a fool’s errand. There is no way of knowing what might happen in the next few months, but we do know that the salary cap will be affected by the long layoff we’ve already seen and continue to see.
Some contracts would not be affected by a lower cap figure due to being a set dollar amount. But Antetokounmpo’s supermax total is based on an annual salary that comes from a percentage of the salary cap and then eight percent raises each year. How could we see that total impacted?
Leroux: The good news for Antetokounmpo is that designated veteran extensions rely on the first new year of the contract independent of when they agree to the deal. That is arguably more significant in this specific circumstance than almost any other time in NBA history because of the uncertainty we face over the next year or so. Antetokounmpo is already under contract for the 2020-21 season so a designated veteran extension would not kick in until the 2021-22 campaign. The world and league may be still feeling ripple effects from COVID-19 at that point, but it is far less likely to affect the salary cap and thus his contract value.
While nothing is certain at this time, it is fair to assume that the 2021-22 season is far enough out that it will be “normal,” potentially the first 82-game slate since before the pandemic. The collective bargaining agreement relies on the prior season’s basketball-related income (BRI) to calculate the following season’s salary cap but the players and owners also can agree to a different cap value if desired.
In this case, both sides would be strongly motivated to figure out a reasonable cap number because underpaying the players relative to the BRI generated in that 2021-22 season would create a shortfall to the players and a cap spike in 2022. We already know the value of the national TV contract and will know all the local TV deals by then too, so expect a fair and substantial number.
That is good for Antetokounmpo but also likely for the Bucks because a higher 2021-22 cap means a larger difference between what they can offer and what everyone else can bid. After all, Milwaukee can pay him 35 percent of the cap for five years with 8 percent raises while every other team can only offer 30 percent of the cap for four years with 5 percent raises.
The Athletic Wisconsin: Before the 2019-20 season began, we detailed just how much larger the Bucks’ supermax offer sheet is than what other teams can offer Antetokounmpo. The projected numbers may be lower than what was projected last summer as the world recovers and the league’s financial future becomes clearer.
| BUCKS | OTHER TEAMS | |
|---|---|---|
Year 1 (2021-22 – Age 27) | 43,750,000 | 37,500,000 |
Year 2 (2022-23 – Age 28) | 47,250,000 | 39,375,000 |
Year 3 (2023-24 – Age 29) | 50,750,000 | 41,250,000 |
Year 4 (2024-25 – Age 30) | 54,250,000 | 43,125,000 |
Year 5 (2025-26 – Age 31) | 57,750,000 | N/A |
Total | 253,750,000 | 161,250,000 |
The difference between the offer sheets is staggering. $92.5 million is a massive amount of guaranteed money to give up. Some will point to one deal being five years and the other offers only being four years, but even if you take out the $57.75 million in Year 5 (which is a massive year to remove), there is still a $34.75 million difference in the first four years.
The financial advantages of signing with the hometown team as an MVP winner are clear when signing an extension eight seasons into your career. Some of the differences between what the Bucks could offer as opposed to other teams in the league disappear following Year 10 though.
With the league possibly still recovering financially in the 2021-22 season, is there any reason to believe Antetokounmpo might be better off signing something like a two-year deal with a player option for the third year to get him to the 10-year threshold?
Leroux: Oh, absolutely. You are right to mention the financial margin between the designated veteran extension and what Antetokounmpo can get elsewhere, especially emphasizing the big gap in the first four seasons, but remember how much control he would cede to the Bucks in exchange for that payday.
The growing prevalence of short-term contracts for superstars illustrates the layered priorities of superstardom in the modern NBA. That designated veteran extension is likely Antetokounmpo’s way to maximize career earnings, but those are only an element of both his overall earnings and decision-making process.
Part of the NBA’s cachet is that the landscape can change quickly. Free agency, trades and the draft keep talent moving and the shift towards shorter contracts has further amplified the whirlwind. Committing to a team for six seasons largely takes a star out of that process for better and worse. While Antetokounmpo is just 25 now and looking like an MVP contender for the foreseeable future, the designated veteran extension would lock him in until his early 30s, presumably covering the entirety of his prime.
It may end up that Milwaukee is the best place to spend those years, and it would be awesome for the Bucks and NBA more broadly to see a superstar stay in place on a perennial contender. However, how certain can he be that they will stay in the title picture? Top teams choose late in the draft if they even keep their picks and capped out front offices only have the mid-level exception to work with.
The other big challenge is the passage of time. Brook Lopez and Eric Bledsoe are already in their 30s while Khris Middleton turns 29 this summer. All three of them are under contract through at least 2022-23 but that is just halfway through a designated veteran extension. Is Antetokounmpo willing to slide all his chips for his age-29, age-30 and age-31 seasons on a single number three years early?
The Athletic Wisconsin: The quickly changing landscape is something that was brought up repeatedly last season as the Bucks dominated the regular season and people questioned their playoff pedigree. This isn’t the 1980s or '90s when teams needed to slowly build toward trying to win a championship. Teams can become championship contenders in a single season.
Unfortunately for the Bucks, teams can move just as quickly in the opposite direction, so the danger for Antetokounmpo signing on for five years (plus the one he already has next season) with a supermax extension does carry some risk for him. Veteran players like Bledsoe or Lopez could break down in a hurry, and Middleton could become less effective once he turns 30. Six years is a lifetime in the NBA.
If six years is too long of a time to trust an organization, this is the part where the chorus from Milwaukee sings, 'Why not just sign him to that supermax for two or three years if that is what Antetokounmpo wants?'
Leroux: Interestingly and importantly, there is no wiggle room in contract length for designated veteran extensions or contracts. Laid out in Article I, Section 1 (r) and (s) of the collective bargaining agreement, designated veteran extensions can only cover six seasons (counting any remaining years on the contract, so five new seasons in Antetokounmpo’s case) while designated veteran contracts must run for five seasons.
That means if Antetokounmpo wants any contract shorter than that, he cannot get the 35 percent max until 2023-24.
The Athletic Wisconsin: This was an interesting conversation. The goal was to elucidate how the supermax extension option has changed for Antetokounmpo and the Bucks in the last month. But the last half of this discussion shows that the decision will be about how much trust Antetokounmpo has in the organization to remain one of the top teams in the NBA going forward.
The dollar figures may change and the economic outlook of the league could shift, but he will ultimately decide what's best for him and his family.
