Extension refusals lock up major moves

Reuters Pictures/DayLifeBy this time in July, NBA fans have typically already seen the biggest moves go down. The NBA’s schedule makers are busy piecing together each team’s 82-game schedule and talking with the TV networks about the games they want. That whole process and the next stage of the NBA’s summer (perhaps the first stage, the one thing that should have been done back in December if not in March) is stymied for the moment.

Dwight Howard’s trade demand has pulled in more than five teams into the conversation in a desperate attempt to get Howard out of Orlando and provide Orlando with what the team wants in return. There is still no trade and no rush to do one, it appears.

The Magic are asking for a lot and have one big impediment to work with. Dwight Howard, until recently, seemed open only to signing with the Nets. When that deal broke down, Howard did not seem willing to make that move. Orlando moved on. Howard appears to have moved on to, reportedly opening up to the idea of signing with the Lakers. Howard has expanded his list to two, and the Lakers are moving to make a deal happen to acquire Howard.

Los Angeles had previously intimated that the team would not acquire Howard without a guarantee that he would sign an extension or re-sign in the offseason. Other reports refuted this idea. Certainly though, a report that Howard has gotten over his hang ups in going to the Lakers helps the Lakers in their push to acquire him.

That does not mean much though. There are two important pieces to this Dwight Howard trade that will not ever be definitively solved and it gives players a ton of power in deciding where they go. The issue is signing the extension.

While reports indicated Howard would be willing to stay with the Lakers long term, Howard’s agent, Dan Fegan, spoke with Ric Bucher of ESPN and said Howard will not sign any extension. Howard’s plan has and always will be to enter free agency.

The same could be said for the other main piece of the reported Magic-Lakers-Cavaliers trade, Andrew Bynum. Bynum will also be a free agent in 2013 and one of the supposed hang ups is that Orlando is not interested in acquiring a player they are not sure about that will enter free agency. Complicating matters, Bynum has not expressed much interest in staying in Orlando… or anywhere for that matter.

Bynum appears poised to enter free agency too and that also may hamper a trade. Does Cleveland want to give up all the assets Orlando wants to acquire Bynum for only one season?

You can see the precarious and uncomfortable position teams are in. From the players’ standpoint though, entering free agency even if it is to re-sign with the previous team makes a lot of financial sense.

There are several rules in place for extensions that make it not worth it to sign. According to salary cap guru Larry Coon’s Salary Cap FAQ, veteran players can only sign extensions for four years (including any remaining years on their contract) whereas if a player became a free agent and re-signed with the team possessing their Bird Rights, they could get up to a five-year deal. Players coming off their rookie contracts cannot get the same amount of money or length of years in free agency, and thus it makes sense for them to sign extensions off of their rookie contracts (as Howard and Bynum did). 

AP Photo/DayLifeRaises on the veteran extensions are limited to 7.5 percent of the original year under the extension whereas the maximum raises for a free agent who resigns can be that same 7.5 percent but the base salary is based on (for max players) a percentage of the salary cap rather than the previous salary. If Howard were to leave in free agency for another team, he would be limited to a four-year deal with 4.5 percent raises.

Josh Robbins of the Orlando Sentinel did an incredible job explaining these various options in the Orlando Sentinel on Saturday.

After that rookie extension, in other words, it pays to go to free agency.

And that is all Howard and Bynum are trying to do by not committing to signing extensions while still promising to stay long term in the end.

It has created an atmosphere however where teams are finding it tough to make these major player deals and get something for the star players that will leave in free agency anyway. It is going to become rarer that teams like the Jazz and the Nuggets can pilfer teams of resources in exchange for stars. And those trades, while keeping the Jazz and Nuggets competitive have not helped them rise above the NBA’s middle class.

Players hold the power. That much is becoming clear. And the increased advantage for teams to re-sign their free agents to max contracts has not alleviated the pressure felt on these teams to get those assurances or move on. Worse, the teams they may want to trade the player to want that assurance even more. Few are willing to rent a player like Dwight Howard for a season without getting something in return or acquiring him for a bargain. Those are not likely to happen.

The NBA is still figuring out the inner workings of this new CBA. One thing this summer has taught teams like the Magic and the Lakers is that the players more or less enter free agency a year early now because of the assurance required from acquiring teams.

Philip Rossman-Reich

About Philip Rossman-Reich

Philip Rossman-Reich is the managing editor for Crossover Chronicles and Orlando Magic Daily. You can follow him on twitter @OMagicDaily

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