Editor’s note: This story has been updated. It originally published on July 26, 2020.
SALT LAKE CITY — As the 2019-20 NBA season was rolling along, the Utah Jazz front office knew that when things wrapped up, big decisions would have to be made regarding the future of the roster — most notably, the future of Donovan Mitchell and Rudy Gobert.
Then the Jazz were planted squarely at the center of the coronavirus pandemic chaos. Gobert tested positive, Mitchell tested positive, the NBA shut down, the world seemed to come to a halt, reports and rumors of unrest between Mitchell and Gobert swirled, and still those decisions about the future remained.
Though plans for a restart emerged and the NBA calendar shifted, a mountain of concerns were thrust onto every NBA team’s plate. Meanwhile, Gobert and Mitchell were bobbing and weaving, saying all the right things when asked about tension between them, Bojan Bogdanovic had season-ending surgery, issues of racial inequality dominated the conversation, and still, an elephant sits in a Utah Jazz conference room reminding the team’s brass that decisions have to be made about Mitchell and Gobert, the dual faces of the franchise.
Here’s the situation: Gobert is under contract through the 2020-21 season, after which he will become an unrestricted free agent. This offseason, though, Gobert is eligible to sign a “designated veteran player extension,” which is more commonly referred to as a supermax extension. This would allow the Jazz, and only the Jazz, to offer Gobert a five-year contract extension on a salary of up to 35% of the cap that could be worth roughly $250 million over the course of the deal.
Mitchell is set to become a restricted free agent following the 2020-21 season, though he, too, is eligible for some big money. The Jazz can offer Mitchell a “designated rookie extension,” more often referred to as a max extension, which would give him up to 25% of the salary cap with a chance for up to 30% of the cap in the fifth year of the contract. Again, only the Jazz can offer this large and lengthy of deal.
On Wednesday, Sept. 2, the day after the Jazz were eliminated by Denver in their first-round playoff series, Yahoo! Sports’ Chris Haynes reported Mitchell will sign a rookie max contract extension with Utah. Haynes said the deal is expected to be for five years and approximately $170 million.
The importance of the word “eligible” is important here. Just because both players are eligible to receive these max extensions doesn’t mean that’s what they will be offered.
Because Mitchell will become a restricted free agent in the summer of 2021, if the Jazz elect not to extend his contract they can match any offer another team makes next year in order to retain him for the 2021-22 season. But, in doing so, the Jazz would risk having another Gordon Hayward situation play out. If allowed to enter the 2022 offseason as an unrestricted free agent, there would be plenty of teams ready to woo Mitchell away from Utah.
Conventional wisdom would suggest that since Mitchell is 23 years old, coming off his first All-Star season and showing continued growth each year, the Jazz will want to avoid another Hayward departure scenario and lock up one of the most marketable rising stars in the league. They can do so at a price tag of roughly $170 million over five years.
Weighing the risk and reward of Gobert’s extension eligibility is a little more difficult than Mitchell’s.
Gobert will be 29 heading into the 2021-22 season, and for a traditional center in the NBA that makes the back-end of a five-year deal, in which he would make around $50 million as a 34-year-old, less attractive than if he were younger or even playing at a different position.
Additionally, the NBA has transitioned into an era that makes playing with a traditional center more difficult. While Gobert is the league’s two-time reigning defensive player of the year, he is not perfect and there are deficiencies in his game that are worrisome now, and could become even more worrisome as he ages and his defensive recovery speed slows.
For the Jazz to commit to a full supermax extension with Gobert, they would tie up more than half their future cap space on Gobert and Mitchell and leave the team with few options to upgrade the roster. As things stand, the Jazz are a playoff team but not necessarily considered a championship contender. In order to break into the next tier of the NBA, they’ll need to get better — and that will cost.
“I plan on winning a championship in Utah. I don’t even think about the extension and the money, I think about being healthy physically, mentally and just go out there and try to win. Try to win and keep getting better as a person and as a basketball player.” — Rudy Gobert
The Jazz also face some risk if they do not offer Gobert the full supermax. If Gobert expects to be offered the full amount and is not happy with the Jazz seeking a discount, he could turn down their offer and test the free-agent market. In that case, if the Jazz and Gobert can’t reach an agreement before his current contract ends, the Jazz would potentially be forced to at least consider trading him to avoid seeing him leave without getting anything in return.
Recently, Gobert made some statements that made it sound like he would be willing to work with the Jazz to reach a deal and that he has high expectations for the future of the Jazz and himself.
“I plan on winning a championship in Utah,” he said. “I don’t even think about the extension and the money, I think about being healthy physically, mentally and just go out there and try to win. Try to win and keep getting better as a person and as a basketball player.”
It’s not like Gobert is not deserving of a supermax contract. He’s one of few players that qualifies for the deal, and the reason he does is because of those consecutive DPOY honors. Also, deals like this are often made because of the front-end value, not the back end. Expecting Gobert to continue to be one of the league’s best defenders and most reliable post scorers could be enough to justify the full amount.
Player decision and the NBA market
Ultimately, this could all come down to what each player wants and believes he deserves. If Mitchell wants to see what other teams are interested in him and what they would be willing to pay, he could turn down a max extension. If Gobert sees himself as more valuable than what the Jazz are willing to offer, he, too, can test the free agency waters.
If either player is offered the max by the Jazz, the decision to turn down the offer would be about the desire to go elsewhere since the Jazz will be able to offer both players more money than any other team. The rules of the designated veteran player and designated rookie extensions give the Jazz the financial upper hand. The whole reason the NBA created these contract rules is to give a team the ability to incentivize its stars to stick around rather than seek greener pastures.
Part of each player’s decision could include what the Jazz decide to do with the other player. If the Jazz offer Gobert the supermax, will Mitchell be confident in the team’s ability to win a championship?
Gobert is going to get paid a lot of money to play basketball, no matter where it is. Will he believe Utah is the place where he can win a ring? Or, would he take a slight discount to go somewhere else and join a title contender?
There are other factors at play. Just as the Jazz have limited money that they can spend — and even more so that they are willing to spend — so does every other team.
No one knows yet how the suspended 2019-20 season and the coronavirus will impact the salary cap moving forward, but any significant hit to the cap and tax threshold could mean that teams are less willing or able to spend big over the next couple seasons. That’s where the risk for both Mitchell and Gobert turning down offers from the Jazz comes into play.
Trying to predict the future is a dangerous game, and that includes the future of NBA careers.
But that’s exactly what an extension is — a prediction that a player will have value in future years. And that’s why from a team perspective, a young player like Mitchell is a better bet than Gobert.
But the players also have to be wary of trying to predict their own futures. If either player elects to turn down what the Jazz offer, and they’re injured, the market will not be kind. If either player sees a decrease in production, has an off-year, or comes up short in the playoffs, the market will adjust accordingly.
If another team doesn’t offer Mitchell or Gobert what they think they deserve, the Jazz will have more leverage and negotiating power.
From the Jazz’s perspective, it would make sense to offer Mitchell the max extension this offseason and make sure that he’s happy. Then, the ideal situation would be getting to an agreement with Gobert that is less than the supermax but still enough to keep him happy and keep him in Utah.
Let’s say, though, that the Jazz offer Gobert the supermax and sign Mitchell to a max extension, and down the line they run into a situation where they have to pay a luxury tax in order to build around the two stars.
“My expectation going forward is that the Millers will fully fund any request that we have regarding player personnel,” Jazz executive vice president of basketball operations Dennis Lindsey said.
Things in the NBA can change quickly. But these decisions will need to be made, and the time to make them is nearing.
Planning for the 2020-21 season
Rather than free agency beginning on July 1, as it would in a normal NBA season, this year’s free agency period opens Oct. 18. In addition to Mitchell’s and Gobert’s extended future, the Jazz will have to make some more immediate decisions regarding the rest of their roster.
In an effort to provide a better understanding of how the NBA’s salary cap works and what the Jazz’s options are heading into the 2020-21 season, we’ll break things down in a little more detail.
For the beginners out there, the NBA’s salary cap is the amount of money that a team is able to spend on players. The salary cap is based on projected earnings and revenue and is set just before the NBA’s free agency period opens each year.
Due to the NBA’s loss in revenue following the suspension of the season because of the coronavirus, it’s expected there will be some changes to the salary cap.
Next season’s cap was projected to be $115 million, so that’s the figure that we’re going with here.
The other two numbers that are important are the luxury tax threshold, projected at $139 million, and the luxury tax apron, projected at $145 million. I’ll explain a little later how these numbers come into play.
When trying to figure out how much cap room the Jazz have to work with, it is necessary to calculate the money they have on the books in salaries next season. In order to do that, we have to talk about Mike Conley’s contract. Conley has an early termination option for next season, which, unless something very unexpected happens, he is likely to forego, meaning that his $34.5 million salary, as seen in the table above, will be spent money for the Jazz.
With Conley’s salary, plus the guaranteed salaries of Gobert, Mitchell, Joe Ingles, Bojan Bogdanovic, Royce O’Neale, Tony Bradley and Ed Davis, along with the non-guaranteed salaries of Georges Niang, Juwan Morgan, Miye Oni, Rayjon Tucker and Nigel Williams-Goss, the Jazz’s total team spending comes to $119,839,442. If you haven’t noticed, that’s already over the $115 projected salary cap and it doesn’t include any of the team’s cap holds.
Cap holds are monetary value placeholders for players that a team retains the rights to or that a team is expected to sign in the future, and the cap hold for each player counts toward the team’s salary cap. For example, Emmanuel Mudiay will be a free agent this summer, but until the Jazz renounce rights to him or he signs a new contract, a $1.7 million cap hold will be applied to the Jazz’s 2020-21 books.
In the Jazz cap holds table you can see that Conley has a cap hold of roughly $40 million. That won’t be a factor once Conley opts in to his salary for 2020-21. Only his salary will count against the Jazz’s total cap.
Additionally, there is a cap hold for the upcoming draft selection, which can be signed, traded or ultimately signed and waived before the offseason. The Jazz also still have the rights to their 2008 draft pick, Ante Tomic, who most recently played for FC Barcelona. Though the Jazz retain the rights to Tomic, he’s unlikely to ever play with the team and they won’t have to worry about a cap hold for him.
Jarrell Brantley and Justin Wright-Foreman, the Jazz’s current two-way players, have cap holds as well, but can be renounced or again signed to two-way contracts, which don’t count against the salary cap.
With the rotational use of Niang, it may be safe to assume the Jazz will keep him on the team and potentially offer him an extension. The other four non-guaranteed players could be waived in order to utilize the small amount of cap room they occupy, or the Jazz could keep them on the books. Those roster spots will eventually have to be taken up no matter what.
The Jazz’s first order of business this offseason will likely be to get rid of Davis’ contract via trade. In doing so, they’ll want to make it so that whatever they bring back in salary is on a non-guaranteed contract that they can waive so it doesn’t count against the cap and they can open up that $5 million that Davis is currently occupying. The Jazz will probably let Mudiay walk if he wants anything more than a minimum contract, and they’ll deal with Brantley and Wright-Foreman in pretty quick fashion by either waiving or signing them to new two-way deals.
The most interesting and possibly most important offseason dilemma the Jazz face, as it relates to their immediate future, revolves around Jordan Clarkson and how the Jazz can maneuver re-signing the second-unit player, who became an integral part of their rotation following his arrival in the Dante Exum trade, while still maintaining the ability to get the most out of the NBA’s salary cap exceptions.
The Jazz will be able to exceed the salary cap in order to sign Clarkson because they own his Bird rights. This applies to any player who has played for three consecutive seasons without clearing waivers or changing teams as a free agent. This rule was created in order to give a team the ability to keep its longer tenured players even if it means going above a spending limit.
The Jazz will be able to sign Clarkson without going above the tax threshold (that $139 million mark), which is great news for ownership’s pockets, but staying under the tax apron ($145 million) is more important.
The kind of deal the Jazz can get Clarkson on (somewhere between $10 million and $13 million would be ideal) will directly impact what else they’re able to do because the other exceptions available to above-cap teams differ depending on whether they can stay under the apron.
The first, and most valuable exception to teams above the cap, is the non-taxpayer mid-level exception. Currently expected to be set at around $9.75 million next season, teams above the cap can use up to that amount on free agents so long as after the exception is used they do not go over the apron.
If the Jazz can stay an additional $3.8 million under the apron after re-signing Clarkson and using the non-taxpayer mid-level they will also be able to use that much more by way of a biannual exception. If either of the non-taxpayer mid-level or biannual exceptions would push the Jazz’s cap above the apron, they won’t be able to use them. In that case, the Jazz will still have an option, though not as valuable.
The taxpayer mid-level exception ($6 million for 2020-21) can be used by teams to go above the apron to sign free agents.
It’s necessary to point out that you can’t use both mid-level exceptions. The Jazz can’t stay under the apron to use the non-taxpayer mid-level and/or the biannual exceptions, then use the taxpayer mid-level to go above the apron. The taxpayer mid-level can only be used if the other exceptions have not been exercised.
That pretty much gives us the parameters in which the Jazz have to work within this offseason. With all that in mind, here’s how the ideal scenario for the Jazz might play out:
- Davis is traded for a non-guaranteed contract. (As noted, this is the ideal scenario, so stay with me.)
- With his contract gone and Clarkson’s cap hold the only one left to worry about, the Jazz agree to a three-year $34 million deal with Clarkson. Since the Jazz have his Bird rights they can stagger each year so that next year’s salary is roughly $10.8 million with 8% increases the next two seasons.
- Even with all the non-guaranteed contracts on the books, that brings the Jazz’s team salary total to $125,634,092. At this point the Jazz would have enough room to not only sign players using the full non-taxpayer mid-level exception and biannual exception, but also their 2020 draft pick while conceivably staying under the luxury tax threshold.
- Being able to stay under the tax would definitely make the LHM Group happy, especially considering what could be on the books for seasons to come (I’m looking at you, Gobert and Mitchell extensions).
- After next season it’s very likely the Jazz won’t be able to build a contending team without paying some luxury tax so, even if the Jazz have to splurge a little extra to keep Clarkson around while staying under the apron, they should do it. Utilizing the more valuable exceptions in order to bring in some role players is not something the Jazz will be able to do if they become a luxury tax paying team, so getting them on the books now is a good idea.
- The starting unit is not the issue with the Jazz. Once Bogdanovic returns from injury and the Jazz have a full season to really go for it, with Conley having more time to gel with everyone, it’s the bench that needs to be beefed up. Keeping Clarkson is the first step there, and getting some more athletic bodies and firepower could do the trick to keep the Jazz in the upper echelon of the Western Conference.