With this posting, I have approached Mario and Orlando's situation from a mainly CBA perspective, which is the NBA's Collective Bargaining Agreement, or it's "cap rules". You will see how I've explained why Mario probably ends up staying in ORL. And after my 3+ hours of CBA researching, I suspect the ORL FO has long been secretly optimistic about it happening too.
Note: The long-winded body of my post is inside of the spoiler, for the true fans
Cheers!
Spoiler:
Mario & Other Teams
Another team can sign Mario to an amount of cap space up to about 25 mil. They can also use Exceptions as well too, limited only by the maximum amount that the specific Exception can reach.
So, for these non-ORL teams:
Option 1: A cap space contract. This can be up to 4 years, with 5% raises. It's a powerful way to steal Mario. You need something that is rather rare this coming summer though; cap space, and more than 5 mil in cap space for a mildly competitive offer too.
Option 2: An exception contract. The two more common (of the three) Mid-Level Exception contracts would be worth more than Orlando's mandated first year amount to Mario as well (more on this later). Not as potentially powerful as a cap space contract, but still powerful. It's particularly powerful in the context of contenders (and teams that Mario really like) who could lure him.
Imagine if GSW offers Mario their Taxpayer Mid-Level deal of 5.5 mil average per year on a 3 year deal? This is the max money/yrs of such an offer (Taxpayer Mid-Level).
Or even if GSW offered up 3.4 mil average per year on a 2 year deal? This the max money/yrs of such an offer (Bi-Annual Exception).
The Non-Taxpayer Mid-Level Exception is the most powerful of the three Mid-Level Exceptions, and is the biggest threat to steal Mario. There could easily be a contender or an interesting team to Mario with this particular exception. And it's basically like signing Mario to a normal cap space contract (even to the same 4 years max and 5% max raises), with the only rule being you can't put the first year amount above 8.5 mil.
Option 3: Have Mario SnT'ed (sign-and-traded) to the new team (the appeal of this to Mario & new-team is for his bird rights to transfer as well). This option is quite interesting in that the new team would have the same exact restrictions as ORL would with Mario this summer. But having bird rights becomes a powerful tool (more on this below, under ORL's perspective).
Mario & Orlando
As we know, ORL dropped their TO (Team Option) on Mario. Maybe they saw some bad things like a player who doesn't bend his knees on defense and wasn't hitting shots early on in the season. Maybe it was a partly motivational tool. All we know for sure is that lately Mario is giving us flashbacks of what J.J. Redick did when he slowly grew out of his shell into a fine young player with a sweet shot. JJ had SVG the whole time and appreciated the process, whereas Mario seems to genuinely enjoy being in ORL but has had no stable head coach to grow with him. It may be up to Mario to appreciate the similarities between him and the JJ situation, as a player story and as a ORL story, in regards to whether he wants to stay here (Or just, you know.. he feels the most confident playing in the rebuilding Magic, with the continuity, as well as with the growing chemistry of knowing teammates better).
Having a clean-slate-FO here could also be a strong plus because they legitimately only had a couple weeks into the start of the season to decide Mario's TO fate, but as a side effect of that decision they can now tell Mario, "Look we love your game and really want you but we legally can't sign you long term to a deal we both like until you have had two straight UFA (unrestricted free agency) summers. This is good for us both though, in that now you have these two opportunities to motivate yourself and gauge your own value on the market, and come back to ORL knowing your value is being well paid by us."
It doesn't sound too bad so far, actually, right? It's like ORL simply decided, "Look, let's put both of us into the fire, and just see what Mario is worth right now for what's probably two straight summers. Let's play him. Let's find out once and for all. Because we are liking his game more and more. We have the cap."
Except here's the big problem with Mario. By dropping Mario's TO (Team Option), ORL triggered an anti-loophole rule in the CBA.
This rule has the effect of allowing other teams to offer Mario more than 4.9 mil in the very first year of his new contract. And ORL, on the other hand, can not offer above 4.9 mil in that very first year. This is because it would violate the whole point of a rookie scale deal if ORL did pay him more than what his TO year would have been (4.9 mil).
So any team offering Mario more than 4.9 mil in his *first year of a contract, would beat ORL's best offer for Mario's *first year in a deal to stay in town (keywords: first year). Sounds like a way to lose a young player who is showing signs of improvement.
But, ORL is probably still in the driver's seat. And here's why:
As long as no team goes too crazy on the first year amount of a deal, the Magic can bring a more exciting and bigger offer to the table. And it's tied to their bird rights with Mario (which they still have).
The bird rights were not dropped with the TO being declined, and these bird rights are exactly what gives Mario his best offer. That is a 5 year deal, with 8% raises, no base salary restrictions, and an ETO option. No outside-ORL deal can match these four qualities. (Even supposing the bird rights were renounced by ORL somehow leaves the alternate scenario that ORL would simply need to resign Mario under a 1 year cap deal or 1 year other-exception deal to instantly restore full bird rights. And it's not like it would be hard for ORL to come up with a 4.9 mil first year deal under a cap or other-exception deal.)
So what does this ORL contract offer look like then? What is the contract that ORL could give to Mario if they played him solid minutes and kept seeing great results throughout the rest of the season?
Mario Hezonja
Orlando Magic contract offer:
Year 1 (2018-2019): 4.9 mil (fully guaranteed)
Year 2 (2019-2020): 5.3 mil (fully guaranteed)
Year 3 (2020-2021): 5.7 mil (fully guaranteed)
Year 4 (2021-2022): 6.15 mil (fully guaranteed)
Year 5 (2022-2023): 6.65 mil (fully guaranteed)
Year 5->6 Summer: Full bird rights in ORL (unrestricted free agent)
**Contract notes: *ORL has full bird rights with Mario after 1 season. *At the signing of this offer, Mario may choose any summer that he wants to add a PO to. Any summer that he does add it, however, must be a final year of contract though, per CBA rules. When he exercises it, Orlando will be sole holder of full bird rights, with no restrictions on a base salary for a new contract, among other full bird rights perks.
So here's the double kicker; the things that really take Orlando well above the rest as an option:
1) As Orlando is offering at maybe a lesser first year offer than others, and among other numerous reasons, they will be happy to let Mario pick his PO summer. And Mario may be internally seeing his own big jump of improvement and value not in this summer, but perhaps, say, the next one after. So why would he let a team like Detroit lock him into 8 per/4 yr when after 1-2 seasons he explodes and is easily worth at 15 per now. In Orlando, Mario has more freedom and negotiating power.
2) Say Detroit signs Mario for 8 mil per/4 years. They even let him choose his final PO year (so maybe it is a 2 year deal (+1 for PO) if Mario wants the PO after 2 seasons, a 3 (+1) year deal for a PO after 3 seasons, or a 4 (+1) year deal for a PO after 4). This offer is still not as competitive as it seems compared to Orlando's. See below:
With Detroit:
Year 1, 8 mil
Year 2, PO UFA (max amount for a new deal in year 1: 9.6 mil, 5% raises
Year 3, PO UFA (max amount for a new deal in year 1: 14.7 mil, 8% raises
Year 4, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
Compare this to Orlando:
Year 1, 5 mil
Year 2, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
Year 3, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
Year 4, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
So imagine Mario is confident that he'll keep improving and play into a 13-14 mil per year level of impact after 1 more season. In Detroit, he would be making less than money than he would have in Orlando by his second season into the new deal already. This is because Orlando can already lock Mario into something of a secure 14 mil per/4-5 year deal/8% raises/one PO type of deal after 1 season. In Detroit.. he's getting paid 9.6 mil at 5% raises and 3-4 years. (9.6 + 8.0 = 17.6 mil earned through 2 seasons in Detroit vs. 5.0 mil + 14.0 mil = 19.0 mil earned through 2 seasons in Orlando).
So any summer that Mario puts his PO in with Orlando's deal, he gets to mull all of the offers patiently. And then Orlando gets to come in and immediately offer a 5 year deal, with any base salary, 8% raises and one PO or one ETO, adding in a trade kicker, signing bonuses, and performance bonuses. The Magic are not limited any base salary restriction for the first year because of full bird rights. (Bird rights cannot be extinguished if Mario has never been placed on waivers or changed teams).
In Conclusion:
The only realistic and threatening offer is a team going crazy for Mario, especially in a exorbitant first year amount. One team could use their cap space, but they would have to start it off with probably 8 mil per year to be competitive with the very possible offer, below from ORL. And they would have to likely beat ORL's 29 mil in guaranteed money too. That's not an easy amount of cap space to make.
Other teams could try throwing the full Non-Taxpayer Mid-Level Exception with an 8.5 mil starting year, and extending it out as far as possible to 4 years and 5% raises, giving a total of around 34 mil in guaranteed money. Keep in mind, however, that even in this scenario, the offer would have 0-1 PO's (player options) and new base salary restrictions, meaning that we are now back to another scenario where Mario could have a better deal through ORL's below (if he trusts his value will go above about 9 mil per year in a locked-in deal from another team, or, a mostly-locked-in deal).
Another team can sign Mario to an amount of cap space up to about 25 mil. They can also use Exceptions as well too, limited only by the maximum amount that the specific Exception can reach.
So, for these non-ORL teams:
Option 1: A cap space contract. This can be up to 4 years, with 5% raises. It's a powerful way to steal Mario. You need something that is rather rare this coming summer though; cap space, and more than 5 mil in cap space for a mildly competitive offer too.
Option 2: An exception contract. The two more common (of the three) Mid-Level Exception contracts would be worth more than Orlando's mandated first year amount to Mario as well (more on this later). Not as potentially powerful as a cap space contract, but still powerful. It's particularly powerful in the context of contenders (and teams that Mario really like) who could lure him.
Imagine if GSW offers Mario their Taxpayer Mid-Level deal of 5.5 mil average per year on a 3 year deal? This is the max money/yrs of such an offer (Taxpayer Mid-Level).
Or even if GSW offered up 3.4 mil average per year on a 2 year deal? This the max money/yrs of such an offer (Bi-Annual Exception).
The Non-Taxpayer Mid-Level Exception is the most powerful of the three Mid-Level Exceptions, and is the biggest threat to steal Mario. There could easily be a contender or an interesting team to Mario with this particular exception. And it's basically like signing Mario to a normal cap space contract (even to the same 4 years max and 5% max raises), with the only rule being you can't put the first year amount above 8.5 mil.
Option 3: Have Mario SnT'ed (sign-and-traded) to the new team (the appeal of this to Mario & new-team is for his bird rights to transfer as well). This option is quite interesting in that the new team would have the same exact restrictions as ORL would with Mario this summer. But having bird rights becomes a powerful tool (more on this below, under ORL's perspective).
Mario & Orlando
As we know, ORL dropped their TO (Team Option) on Mario. Maybe they saw some bad things like a player who doesn't bend his knees on defense and wasn't hitting shots early on in the season. Maybe it was a partly motivational tool. All we know for sure is that lately Mario is giving us flashbacks of what J.J. Redick did when he slowly grew out of his shell into a fine young player with a sweet shot. JJ had SVG the whole time and appreciated the process, whereas Mario seems to genuinely enjoy being in ORL but has had no stable head coach to grow with him. It may be up to Mario to appreciate the similarities between him and the JJ situation, as a player story and as a ORL story, in regards to whether he wants to stay here (Or just, you know.. he feels the most confident playing in the rebuilding Magic, with the continuity, as well as with the growing chemistry of knowing teammates better).
Having a clean-slate-FO here could also be a strong plus because they legitimately only had a couple weeks into the start of the season to decide Mario's TO fate, but as a side effect of that decision they can now tell Mario, "Look we love your game and really want you but we legally can't sign you long term to a deal we both like until you have had two straight UFA (unrestricted free agency) summers. This is good for us both though, in that now you have these two opportunities to motivate yourself and gauge your own value on the market, and come back to ORL knowing your value is being well paid by us."
It doesn't sound too bad so far, actually, right? It's like ORL simply decided, "Look, let's put both of us into the fire, and just see what Mario is worth right now for what's probably two straight summers. Let's play him. Let's find out once and for all. Because we are liking his game more and more. We have the cap."
Except here's the big problem with Mario. By dropping Mario's TO (Team Option), ORL triggered an anti-loophole rule in the CBA.
This rule has the effect of allowing other teams to offer Mario more than 4.9 mil in the very first year of his new contract. And ORL, on the other hand, can not offer above 4.9 mil in that very first year. This is because it would violate the whole point of a rookie scale deal if ORL did pay him more than what his TO year would have been (4.9 mil).
So any team offering Mario more than 4.9 mil in his *first year of a contract, would beat ORL's best offer for Mario's *first year in a deal to stay in town (keywords: first year). Sounds like a way to lose a young player who is showing signs of improvement.
But, ORL is probably still in the driver's seat. And here's why:
As long as no team goes too crazy on the first year amount of a deal, the Magic can bring a more exciting and bigger offer to the table. And it's tied to their bird rights with Mario (which they still have).
The bird rights were not dropped with the TO being declined, and these bird rights are exactly what gives Mario his best offer. That is a 5 year deal, with 8% raises, no base salary restrictions, and an ETO option. No outside-ORL deal can match these four qualities. (Even supposing the bird rights were renounced by ORL somehow leaves the alternate scenario that ORL would simply need to resign Mario under a 1 year cap deal or 1 year other-exception deal to instantly restore full bird rights. And it's not like it would be hard for ORL to come up with a 4.9 mil first year deal under a cap or other-exception deal.)
So what does this ORL contract offer look like then? What is the contract that ORL could give to Mario if they played him solid minutes and kept seeing great results throughout the rest of the season?
Mario Hezonja
Orlando Magic contract offer:
Year 1 (2018-2019): 4.9 mil (fully guaranteed)
Year 2 (2019-2020): 5.3 mil (fully guaranteed)
Year 3 (2020-2021): 5.7 mil (fully guaranteed)
Year 4 (2021-2022): 6.15 mil (fully guaranteed)
Year 5 (2022-2023): 6.65 mil (fully guaranteed)
Year 5->6 Summer: Full bird rights in ORL (unrestricted free agent)
**Contract notes: *ORL has full bird rights with Mario after 1 season. *At the signing of this offer, Mario may choose any summer that he wants to add a PO to. Any summer that he does add it, however, must be a final year of contract though, per CBA rules. When he exercises it, Orlando will be sole holder of full bird rights, with no restrictions on a base salary for a new contract, among other full bird rights perks.
So here's the double kicker; the things that really take Orlando well above the rest as an option:
1) As Orlando is offering at maybe a lesser first year offer than others, and among other numerous reasons, they will be happy to let Mario pick his PO summer. And Mario may be internally seeing his own big jump of improvement and value not in this summer, but perhaps, say, the next one after. So why would he let a team like Detroit lock him into 8 per/4 yr when after 1-2 seasons he explodes and is easily worth at 15 per now. In Orlando, Mario has more freedom and negotiating power.
2) Say Detroit signs Mario for 8 mil per/4 years. They even let him choose his final PO year (so maybe it is a 2 year deal (+1 for PO) if Mario wants the PO after 2 seasons, a 3 (+1) year deal for a PO after 3 seasons, or a 4 (+1) year deal for a PO after 4). This offer is still not as competitive as it seems compared to Orlando's. See below:
With Detroit:
Year 1, 8 mil
Year 2, PO UFA (max amount for a new deal in year 1: 9.6 mil, 5% raises
Year 3, PO UFA (max amount for a new deal in year 1: 14.7 mil, 8% raises
Year 4, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
Compare this to Orlando:
Year 1, 5 mil
Year 2, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
Year 3, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
Year 4, PO UFA (max amount for a new deal in year 1: About 25 mil, 8% raises, up to 5 years
So imagine Mario is confident that he'll keep improving and play into a 13-14 mil per year level of impact after 1 more season. In Detroit, he would be making less than money than he would have in Orlando by his second season into the new deal already. This is because Orlando can already lock Mario into something of a secure 14 mil per/4-5 year deal/8% raises/one PO type of deal after 1 season. In Detroit.. he's getting paid 9.6 mil at 5% raises and 3-4 years. (9.6 + 8.0 = 17.6 mil earned through 2 seasons in Detroit vs. 5.0 mil + 14.0 mil = 19.0 mil earned through 2 seasons in Orlando).
So any summer that Mario puts his PO in with Orlando's deal, he gets to mull all of the offers patiently. And then Orlando gets to come in and immediately offer a 5 year deal, with any base salary, 8% raises and one PO or one ETO, adding in a trade kicker, signing bonuses, and performance bonuses. The Magic are not limited any base salary restriction for the first year because of full bird rights. (Bird rights cannot be extinguished if Mario has never been placed on waivers or changed teams).
In Conclusion:
The only realistic and threatening offer is a team going crazy for Mario, especially in a exorbitant first year amount. One team could use their cap space, but they would have to start it off with probably 8 mil per year to be competitive with the very possible offer, below from ORL. And they would have to likely beat ORL's 29 mil in guaranteed money too. That's not an easy amount of cap space to make.
Other teams could try throwing the full Non-Taxpayer Mid-Level Exception with an 8.5 mil starting year, and extending it out as far as possible to 4 years and 5% raises, giving a total of around 34 mil in guaranteed money. Keep in mind, however, that even in this scenario, the offer would have 0-1 PO's (player options) and new base salary restrictions, meaning that we are now back to another scenario where Mario could have a better deal through ORL's below (if he trusts his value will go above about 9 mil per year in a locked-in deal from another team, or, a mostly-locked-in deal).
Overall then, ORL actually has a really great shot at keeping Mario this summer.
Mario Hezonja
Orlando Magic contract offer:
Year 1 (2018-2019): 4.9 mil (fully guaranteed)
Year 2* (2019-2020): 5.3 mil (fully guaranteed)
Year 3* (2020-2021): 5.7 mil (fully guaranteed)
Year 4* (2021-2022): 6.15 mil (fully guaranteed)
Year 5* (2022-2023): 6.65 mil (fully guaranteed)
Year 5->6 Summer: Full bird rights in ORL (unrestricted free agent)
**Contract notes: *ORL has full bird rights with Mario after 1 season. *At the signing of this offer, Mario may also choose any summer that he wants to add a PO to. Any summer that he does add it, however, must be a final year of contract though, per CBA rules. When he exercises it, Orlando will again be sole holder of full bird rights, with no restrictions on a base salary for a new contract (among other perks).
This very possible ORL offer, above, gives Mario a lot of things; even more confidence out on the floor, more options and opportunities, and the security of large guaranteed money. Win-win.
