Will Klay be eligible for a super max deal when his contract is up?

[turk3d]

How much money are we talking about here and what kind of impact will it have on our cap considering we'll already likely be in repeater tax mode?

[East Bay Sports]

I thought teams can only have one super max per franchise and we just gave Curry one?

Either way, Klay may as well be prepared to take less than whatever his max is because he's not getting it from us. If he wants to stay on the bus he will take less than his market value.

[FrigginFalcon]

As I understand the so-called "Kevin Durant Rule," we can outbid any possible suitor for Green OR Thompson, assuming they meet the necessary criteria. From deadspin.com:

"To reap the benefits of the Durant Rule, a player must have been in the league for eight or nine seasons in the league, and must be re-signing with the team that inked their rookie contract or took on that contract via trade. He must also satisfy one of the following conditions:

- Make an All-NBA team the preceding season or two of the last three seasons
- Win the MVP in the last three years
- Win Defensive Player of the Year in the last three years

Under these rules, the Warriors can pay Stephen Curry $209 million over five years when he becomes a free agent in 2018, $76 million more than the best contract opposing teams could offer, [which is] $133 million over four years. . . . Every team gets to lure TWO stars under these terms, so either Draymond Green or Klay Thompson is likely to see a big payday soon. (Durant no longer satisfies these criteria because he just switched to a new team.)"

[OKC got doubly screwed on this . . . it was Durant's departure that caused the rule to be created in the first place, and Westbrook will also be ineligible for it by virtue of coming off contract after TEN seasons in the League -- one year too long.]

In the absence of the Durant Rule, I believe that we can match any other team's offer, but not exceed it -- the same situation OKC was in with Durant last Summer (see below).

The "Designated Player" exception, aka the "Derrick Rose Rule," might apply, but I think the designation has to happen in the rookie year, and I don't think that was the case with Klay or Dray. It also requires the player to meet similar but slightly less stringent conditions than those for the KD Rule. If it did apply, it would allow the Dubs to go up to 30% of the cap for the designated player.

Failing any of that, the "Larry Bird Rule" ensures that we can pay either of them the ordinary veteran maximum even if it takes us over the cap. But with Steph, KD, Klay, and Dray ALL at the full veteran cap or higher, the tax bill will become massive once the rest of the roster has been filled out.

(I don't claim to be an expert of the Salary Cap, and I invite more knowledgeable folks to point out any errors or subtleties I may have missed. I'd also be interested in a sort of "what if" analysis based on the current roster, including the existing commitments, just to understand how bad the luxury tax bill might become.)

[BdeRegt]

A team can have 2 Super-Max players so either Draymond or Klay could get the Super-Max deal if they qualify but not both. I do not predict Klay to qualify as he has struggled to make All-NBA team as 4th star on the team. This leaves the Super-Max deal for Draymond to get up to 35% of the cap in the same manner that Curry did. Now, the Warriors will still be able to pay Klay more than any other team and can go over the cap as much as Lacob allows to keep team together. Klay would only be eligible for 30% of the Max (other teams could offer this same 30%) but Warriors can give a 5th year and 8% raises (other teams 4/5%).

[East Bay Sports]

I can't picture Draymond demanding a super max or any team offering it, truthfully.

[turk3d]

So based on what was stated thus far, what's the most that Klay can expect (from us and from outside)?

[FrigginFalcon]

So based on what was stated thus far, what's the most that Klay can expect (from us and from outside)?

Players with 7-9 years experience are eligible for up to 30% of the salary cap. That's why Durant was eligible for $26.5 million the year he signed. This year, I believe it is $30.3 million. A "Bird Rights" signing further allows for an 8% per year raise. Past 9 years experience, the limit goes up to 35%.

The latter point makes little real sense, because most players tend to begin to decline in contribution after 9 years in the League (not all, but on average). It makes more sense when you realize that virtually all the player reps negotiating the CBA are veteran stars beyond or at least approaching 9 years in the League. They are negotiating large, often unjustified paydays for themselves at the expense of younger, non-star players.

There is also an "Over 38" limit to prevent teams from back-loading long contracts to move part of the cost beyond the player's productive years, allowing them to dump the contract from the cap calculation (though they still have to pay the player his salary, whether he plays at all or not). This was recently raised from "Over 36" . . . and again, surprise, the lead Player Reps are all at or near 36 years of age. Sigh.

Signing under Bird Rights also allows paying up to the maximum regardless of salary-cap impact, but it does not eliminate the luxury tax payment, which for the Dubs could rise to $5 in tax per $1 in "excess" salary (AVERAGE around $4 for the example below, since it rises progressively with the amount over the cap). So, imagine a roster right at the cap before we sign Klay or Dray, then we sign them for $30 million per year. That signing will COST $150 million per year ($30 million salary plus $120 million tax). I've seen projections of over $1 billion in luxury tax for the Dubs over the next 5 years. Increases in the cap can help, but those are unpredictable

[turk3d]

So, what does that translate to in dollars $$ for Klay (if he stays in Golden State or decides to go elsewhere)? $200M per year on average might be might tolerable for Dubs management if they're able to dominate for the next 5 years. Who knows?

[FrigginFalcon]

I have a couple of spreadsheets, but apparently no way to post them without creating an online image repository, which is a PITA I prefer to avoid.

Briefly . . . we can always sign KD, Klay, and Dray for the veteran maximum, which is 30% of the salary cap for Klay & Dray, and 35% of the cap for KD, in each case with up to an 8% annual raise baked into the contract. If we can and do use the DVPE aka "Kevin Durant Rule" aka "SuperMax," then either Klay or (more likely) Dray also goes up to 35%.

If we give KD, Klay, and Dray the ordinary veteran maximums of 35%, 30%, and 30% respectively, with the 8% annual raise, by 2021-22 we will have a team salary of $153 million, a luxury tax bill of $92 million, and thus a total payroll of $245 million. That's with only 4 players on the team. Beyond that, each $1.00 we spend on salary costs us at least $4.75 in tax, with the rate rising by $0.50 for each $5 million we rise above the luxury tax cut-off. We are also constrained in various ways on other spending by virtue of being over the luxury tax limit.

If we give Dray the SuperMax, McCaw an MLE, and just extend everyone else at their current salaries, which is really an unreasonably conservative way to imagine keeping our "non-star" quality as high as it is, by 2021-22, the total team salary is $207 million, the luxury tax bill is $378 million, and thus the total payroll is $497 million.

There are many assumptions and simplifications in the above. In general, I have been conservative about everything except the Salary Cap itself, which I have kept constant from year to year. Obviously, when the Cap rises, so does the Luxury Tax threshold, and the taxes drop significantly. But no matter what, keeping all 4 of our stars is going to get very spendy, and it will also limit our Owner's ability to spend on other players, even if he is willing to accept the tax consequences. We will, in essence, be going from 4 high-quality players (Steph, Klay, Dray, and Barnes), all at bargain salaries, to 4 even higher-quality players (Steph, Klay, Dray, and KD), all at or near full market value.

OUCH!

[FrigginFalcon]

Without a SuperMax for Draymond, 2021-22 salaries would be:

Steph: $45.8, KD: $40.2, Klay: $34.7, and Dray: $32.1

(that assumes the salary cap stays the same every year at the current level of $99.093)

[East Bay Sports]

I'd much rather find a cheaper replacement than dream of paying Klay 35m

[BdeRegt]

Draymond will get somewhere between the 30% max and the super-max. Klay will get the 30% "max". Maybe there is a slight discount on the raises. They each have earned it and it is what it will take to keep them. I believe Warriors best plan is to pay them and try to maximize the end of Durant and Curry's prime. Warriors try to win as much as they can now knowing that probably going to be some overpaid players and possibly end up bad again but an extra title or two is worth a few down years.

[turk3d]

So what's the most Klay could get if he went elsewhere (Warriors chose not to extend)?

[FrigginFalcon]

I believe it is exactly the same (30% of the total Salary Cap). The veteran max is the veteran max, no matter where you go. The Dubs have his "Bird Rights," which mean that they are allowed to exceed the Cap to pay him up to the max. Other teams could also pay Klay up to the max, but in general they cannot exceed the Cap to do so. If they can fit him under the Cap, they may be able to sign OTHER players that take them over the Cap, depending on other rules that may apply (including, for example, re-signing players of their own for whom THEY have Bird Rights). But basically, Klay's max salary will be the same no matter who he signs with, and the Dubs will have the edge as long as they are willing to pay him the max and the tax that comes with it.

[laika]

I have a couple of spreadsheets, but apparently no way to post them without creating an online image repository, which is a PITA I prefer to avoid.

Briefly . . . we can always sign KD, Klay, and Dray for the veteran maximum, which is 30% of the salary cap for Klay & Dray, and 35% of the cap for KD, in each case with up to an 8% annual raise baked into the contract. If we can and do use the DVPE aka "Kevin Durant Rule" aka "SuperMax," then either Klay or (more likely) Dray also goes up to 35%.

If we give KD, Klay, and Dray the ordinary veteran maximums of 35%, 30%, and 30% respectively, with the 8% annual raise, by 2021-22 we will have a team salary of $153 million, a luxury tax bill of $92 million, and thus a total payroll of $245 million. That's with only 4 players on the team. Beyond that, each $1.00 we spend on salary costs us at least $4.75 in tax, with the rate rising by $0.50 for each $5 million we rise above the luxury tax cut-off. We are also constrained in various ways on other spending by virtue of being over the luxury tax limit.

If we give Dray the SuperMax, McCaw an MLE, and just extend everyone else at their current salaries, which is really an unreasonably conservative way to imagine keeping our "non-star" quality as high as it is, by 2021-22, the total team salary is $207 million, the luxury tax bill is $378 million, and thus the total payroll is $497 million.

There are many assumptions and simplifications in the above. In general, I have been conservative about everything except the Salary Cap itself, which I have kept constant from year to year. Obviously, when the Cap rises, so does the Luxury Tax threshold, and the taxes drop significantly. But no matter what, keeping all 4 of our stars is going to get very spendy, and it will also limit our Owner's ability to spend on other players, even if he is willing to accept the tax consequences. We will, in essence, be going from 4 high-quality players (Steph, Klay, Dray, and Barnes), all at bargain salaries, to 4 even higher-quality players (Steph, Klay, Dray, and KD), all at or near full market value.

OUCH!

This post should make it obvious- There is no reasonable way that the Warriors can keep Thompson.

Klay is nowhere close to as good as Curry/Durant/Green. The only remotely realistic option is to pay those three, then pay everyone else a whole lot less. Barring Klay willing to take a huge discount(no chance), or the owners willing to lose a lot of money(more speculative but unlikely), Thompson will play two more years at most then sign somewhere else.

[Impuniti]

There is no way the FO would offer a super max deal to either Klay or Green because they're nowhere near good enough to earn it for a generational team. A non topic.

[Mylie10]

Here's what Klay thinks about your question

[img]

[FrigginFalcon]

There is no way the FO would offer a super max deal to either Klay or Green because they're nowhere near good enough to earn it for a generational team. A non topic.

The Warriors have never made it to the Finals without Curry AND Thompson AND Green.

[EDIT: I mean "never" in the past few decades only ]

The one time they lost the Finals, Green's absence for one whole game and part of another was a key factor.

Not saying that proves anything, but "KlayDraymation" may not be so easy to decouple from the Warriors' success as one might hope.

Klay provides a deadly catch-and-shoot option when teams dare to rotate away from him even for the briefest moment, and he provides excellent defense against key perimeter threats, along with the height and strength not to be overwhelmed when he needs to switch onto bigger players.

Draymond is a DPOY and will be a perennial contender for that honor, he often runs the offense as much or more than whoever is nominally the Point Guard, plus he and Iggy are tremendous "spark plugs" for an otherwise fairly low-key group.

If it can be handled in a respectful way, I think the ideal way to handle both Klay and Dray is to see what they are offered on the open market, and then, WHATEVER it is, MATCH IT! I think that is a self-correcting approach, because . . . if the Cap stays roughly the same, few teams will be in a position to add players with max contracts, Klay & Dray will see the open market will not give them the max, and they will hopefully be willing to accept something less without becoming disgruntled. OTOH, if the Cap rises by a lot, then keeping them will be less painful (see below).

EXAMPLE: If we need to provide a salary of 30% of the Cap, and all of it takes us further above the Cap, every dollar the Cap rises costs 30 cents for the salary but provides a discount of 70 cents x [Factor] off the luxury tax. So, lets' say that we are at an average of $3.00 tax per $1.00 salary situation, and that ALL of the salary is in the luxury tax bracket. At the current $99 million Cap, that's a $30 million salary and a $90 million tax hit, or $120 million total. But if the Cap rises to, say, $115 million, the salary rises to $35 million, but only $10 million of it is taxable, AND the average rate drops to $2.00, so the total hit is $35 million + $20 million tax, or $55 million total. Regardless of how we handle individual players, a rising Cap also reduces the effective burden of Steph, Iggy, and Shaun's current deals, as well as whatever deals we strike with KD (and McCaw, et al.) next year.

A stagnant cap tends to favor teams with lots of youth or with retiring / departing stars, and that's not us. One reason for our success was that a big bump in the Cap came in EXACTLY the year that KD became available. Combining that with the bargain salaries we had for Steph, Klay, and Dray, it allowed us to offer KD exactly as much as any other team, at least for a 1-year deal. But if the Cap stagnates for the next 2-3 years, it WILL make retaining Klay & Dray MUCH more painful. It will also limit SOME of the other teams that might try to lure them away, but probably not all.

[FrigginFalcon]

Follow up -- For the GSW, every $10 million the cap rises effectively saves us $50 million in luxury tax. That makes keeping our stars MUCH cheaper. OTOH, it frees up a lot of money for other teams (who are taxpayers or are on the brink) to compete for the mid-range players, so filling out the roster gets much more competitive.

[turk3d]

Some great posts there Falcon. I think that we really won't know for a while how things will actually shake out but you give some great ideas on how it might. In the meantime, let's enjoy a few more championships the next few years and we'll see. I think (based on your points) a lot will depend on what Klay wants to do when we get there. I think that there will be a good chance that our FO will figure out a way should he decide he wants to stay.