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Giving OG that Player Option year was genius

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Giving OG that Player Option year was genius 

Post#1 » by DelAbbot » Fri Jan 14, 2022 5:27 am

I was bored and looking at Raptors future salaries on spotrac

https://www.spotrac.com/nba/toronto-raptors/yearly/cap/roster/

Since I'm big OG fan, I was a little disappointed that OG's 4th year on his extension is a player option, which he will likely decline (barring injury, knocking on wood), making OG a free agent in summer of 2024.

Then I realized there is likely a new NBA TV deal in summer of 2025:

https://www.cbssports.com/nba/news/nba-aiming-for-new-tv-deal-worth-75-billion-which-could-lead-to-large-increase-in-salary-cap-per-report/

Looking back, Terence Ross (signed extension Nov 2015), and Jonas Valanciunas (signed extension Aug 2015), both signed around 1 year before the start of the current NBA TV deal that began in 2016/2017 season - when the NBA salary cap started to balloon (gradually). Over time, those two extensions proved to be good value contracts (netting us 2 key pieces of our championship team Ibaka and Gasol) because of NBA cap increases due to the at-the-time new TV deal that began in 2016. So Masai's playbook was to lock into long term extensions with young players approximately 1 year before the new NBA TV deal starts.

If Masai intends to use the same extension playbook, it makes a lot of sense that Masai gave OG that 4th year as a player option (trading for a lower average annual salary over 2021-2024). Masai wants OG to be seeking an extension in summer of 2024 or earlier, so he can lock OG into another long term extension before the new NBA TV deal increases the NBA salary cap and player salaries.

Bonus observation: Scottie Barnes can sign Rookie Scale Extension (4 years or 5 years) just before the beginning of his 4th year in the league (https://cbabreakdown.com/contract-types), which is also Oct 2024 - 1 year before new NBA TV deal starts. We will have OG and Barnes locked up and still have lots of cap space around 2025 & 2026 to get that championship!
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Re: Giving OG that Player Option year was genius 

Post#2 » by ForeverTFC » Fri Jan 14, 2022 5:41 am

I mean, both those guys and their agents also know that the new TV deal will be coming. So any new contract will price that in to some degree.

You can't compare TRoss and Jonas' bargaining power to what will likely be OG's and Barnes'.
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Re: Giving OG that Player Option year was genius 

Post#3 » by C_Money » Fri Jan 14, 2022 5:49 am

Don’t we give player options to everybody? Even Svi has one lol.
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Re: Giving OG that Player Option year was genius 

Post#4 » by DelAbbot » Fri Jan 14, 2022 5:50 am

ForeverTFC wrote:I mean, both those guys and their agents also know that the new TV deal will be coming. So any new contract will price that in to some degree.

You can't compare TRoss and Jonas' bargaining power to what will likely be OG's and Barnes'.


You are right that they will know new TV deal is coming, but the point of my post is that OG will most likely be seeking a new deal in summer of 2024 (or earlier) - at which time OG's leverage for a base annual salary (for his next contract) is determined by other team's available room under the cap in summer of 2024, with NBA cap based on the current TV deal.

We could have a significant bump to NBA cap in 2025 based on the new TV deal.
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Re: Giving OG that Player Option year was genius 

Post#5 » by ForeverTFC » Fri Jan 14, 2022 5:54 am

DelAbbot wrote:
ForeverTFC wrote:I mean, both those guys and their agents also know that the new TV deal will be coming. So any new contract will price that in to some degree.

You can't compare TRoss and Jonas' bargaining power to what will likely be OG's and Barnes'.


You are right that they will know new TV deal is coming, but the point of my post is that OG will most likely be seeking a new deal in summer of 2024 (or earlier) - at which time OG's leverage for a base annual salary (for his next contract) is determined by other team's available room under the cap in summer of 2024, with NBA cap based on the current TV deal.

We could have a significant bump to NBA cap in 2025 based on the new TV deal.


For sure. And I'm saying OG will either a) pick up his option and go into FA the next year where he will make more money and a lot more teams will have cap space or b) he will get a higher deal from Masai than he should under the current cap structure and trade some of the money he would have gotten the next year for the security - Raps can sign him to whatever they want as an FA, there is no cap restrictions on signing him back
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Re: Giving OG that Player Option year was genius 

Post#6 » by Psubs » Fri Jan 14, 2022 5:56 am

ForeverTFC wrote:I mean, both those guys and their agents also know that the new TV deal will be coming. So any new contract will price that in to some degree.

You can't compare TRoss and Jonas' bargaining power to what will likely be OG's and Barnes'.


Masai can offer max extension and say that's the max rather than things jumping up and having to bid with other teams the next year with the increased cap.
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Re: Giving OG that Player Option year was genius 

Post#7 » by DelAbbot » Fri Jan 14, 2022 5:57 am

ForeverTFC wrote:
DelAbbot wrote:
ForeverTFC wrote:I mean, both those guys and their agents also know that the new TV deal will be coming. So any new contract will price that in to some degree.

You can't compare TRoss and Jonas' bargaining power to what will likely be OG's and Barnes'.


You are right that they will know new TV deal is coming, but the point of my post is that OG will most likely be seeking a new deal in summer of 2024 (or earlier) - at which time OG's leverage for a base annual salary (for his next contract) is determined by other team's available room under the cap in summer of 2024, with NBA cap based on the current TV deal.

We could have a significant bump to NBA cap in 2025 based on the new TV deal.


For sure. And I'm saying OG will either a) pick up his option and go into FA the next year where he will make more money and a lot more teams will have cap space or b) he will get a higher deal from Masai than he should under the current cap structure and trade some of the money he would have gotten the next year for the security - Raps can sign him to whatever they want as an FA, there is no cap restrictions on signing him back


Yes this is possible. I think my title could have been "making that OG extension 4th year a player option is better than guaranteed 4th year, but we really should have given him a 3 year extension instead" - now that is a mouthful
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Re: Giving OG that Player Option year was genius 

Post#8 » by Psubs » Fri Jan 14, 2022 6:13 am

DelAbbot wrote:
ForeverTFC wrote:
DelAbbot wrote:
You are right that they will know new TV deal is coming, but the point of my post is that OG will most likely be seeking a new deal in summer of 2024 (or earlier) - at which time OG's leverage for a base annual salary (for his next contract) is determined by other team's available room under the cap in summer of 2024, with NBA cap based on the current TV deal.

We could have a significant bump to NBA cap in 2025 based on the new TV deal.


For sure. And I'm saying OG will either a) pick up his option and go into FA the next year where he will make more money and a lot more teams will have cap space or b) he will get a higher deal from Masai than he should under the current cap structure and trade some of the money he would have gotten the next year for the security - Raps can sign him to whatever they want as an FA, there is no cap restrictions on signing him back


Yes this is possible. I think my title could have been "making that OG extension 4th year a player option is better than guaranteed 4th year, but we really should have given him a 3 year extension instead" - now that is a mouthful


If you would've only gave him a 3-year extension the salary of each year would've been $1-2 million more. The player buys the Player Option by sacrificing some money during the previous years salary.
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Re: Giving OG that Player Option year was genius 

Post#9 » by mdenny » Fri Jan 14, 2022 6:33 am

Huh. Interesting point.

I still think all our player options are a combination of:

1 the price of doing business with canadian taxes
2 to strategically undercut other teams for potential trade assets

I wonder if OG's agent doesn't just include the eminent changes in league revenue in contract negotiations the year before? Whatever way one cuts it...it's probably a point of leverege to some extent. Ie the best possible year to offer player options.
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Re: Giving OG that Player Option year was genius 

Post#10 » by KL78192020 » Fri Jan 14, 2022 7:14 am

DelAbbot wrote:I was bored and looking at Raptors future salaries on spotrac

https://www.spotrac.com/nba/toronto-raptors/yearly/cap/roster/

Since I'm big OG fan, I was a little disappointed that OG's 4th year on his extension is a player option, which he will likely decline (barring injury, knocking on wood), making OG a free agent in summer of 2024.

Then I realized there is likely a new NBA TV deal in summer of 2025:

https://www.cbssports.com/nba/news/nba-aiming-for-new-tv-deal-worth-75-billion-which-could-lead-to-large-increase-in-salary-cap-per-report/

Looking back, Terence Ross (signed extension Nov 2015), and Jonas Valanciunas (signed extension Aug 2015), both signed around 1 year before the start of the current NBA TV deal that began in 2016/2017 season - when the NBA salary cap started to balloon (gradually). Over time, those two extensions proved to be good value contracts (netting us 2 key pieces of our championship team Ibaka and Gasol) because of NBA cap increases due to the at-the-time new TV deal that began in 2016. So Masai's playbook was to lock into long term extensions with young players approximately 1 year before the new NBA TV deal starts.

If Masai intends to use the same extension playbook, it makes a lot of sense that Masai gave OG that 4th year as a player option (trading for a lower average annual salary over 2021-2024). Masai wants OG to be seeking an extension in summer of 2024 or earlier, so he can lock OG into another long term extension before the new NBA TV deal increases the NBA salary cap and player salaries.

Bonus observation: Scottie Barnes can sign Rookie Scale Extension (4 years or 5 years) just before the beginning of his 4th year in the league (https://cbabreakdown.com/contract-types), which is also Oct 2024 - 1 year before new NBA TV deal starts. We will have OG and Barnes locked up and still have lots of cap space around 2025 & 2026 to get that championship!


By 2024 if he's playing at really high and level and if he really thinks hes worth a lot, theres lots of options he can easily sign a 1 year deal or do a 2+1 deal.
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Re: Giving OG that Player Option year was genius 

Post#11 » by tdotrep2 » Fri Jan 14, 2022 7:31 am

our team will be in cap hell in a few years
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Re: Giving OG that Player Option year was genius 

Post#12 » by PerfectJab » Fri Jan 14, 2022 7:59 am

The contract worked out great but I think you're looking into it too much and giving Masai too much credit.

4 year with a player option is quite common. It is the norm for a contract extension especially for the caliber and potential player that OG was at the time of his signing.
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Re: Giving OG that Player Option year was genius 

Post#13 » by Gold Dragon » Fri Jan 14, 2022 10:47 am

DelAbbot wrote:Bonus observation: Scottie Barnes can sign Rookie Scale Extension (4 years or 5 years) just before the beginning of his 4th year in the league (https://cbabreakdown.com/contract-types), which is also Oct 2024 - 1 year before new NBA TV deal starts. We will have OG and Barnes locked up and still have lots of cap space around 2025 & 2026 to get that championship!


Barnes' rookie extension will be a max salary based on a percentage of the salary cap in the first year of that new TV deal, even if it is signed before the new TV deal is signed. So 25% of the new deal cap with 8% raises for 5 years (the 0-6 year vet max) or 30% of the new deal cap with 8% raises for 5 years if he meets the designated rookie extension criteria (winning an All-NBA, DPOY or MVP).

One of the consequences of the new TV deal for the Raptors might be that the next contracts that FVV and GTJ likely will sign after they opt out of the final years of their current deals will be two year contracts with a player option to time their expiry with the TV deal.

This could be good for the Raptors in that they will avoid committing to massive long term contracts for FVV and GTJ that often get teams stuck. But bad because two year deals are not eligible for extension and they will be UFAs when they opt out (just like GTJ will be in his current deal which is also not eligible for extension).

It is likely that the Raptors will be a tax paying team after next season when FVV and GTJ's contracts are up for renewal. This core has until then to prove they are worth going into the tax for. The season after that Pascal, OG and Precious are up for renewal and something will have to give or we will be well over the tax in the year before the new TV deal.
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Re: Giving OG that Player Option year was genius 

Post#14 » by bluerap23 » Fri Jan 14, 2022 2:44 pm

Wait - so you're telling me Masai knows what he is doing?

Masai has been favouring shorter term deals since he got here.
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Re: Giving OG that Player Option year was genius 

Post#15 » by OakleyDokely » Fri Jan 14, 2022 3:10 pm

Masai has shown that he isn't going to nickel and dime his own players, especially ones that have contributed to team success. He's not going to vastly overpay, but he's going to agree to a fair deal that gives the player some favorable aspects, like player options.
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Re: Giving OG that Player Option year was genius 

Post#16 » by Mikistan » Fri Jan 14, 2022 3:48 pm

OakleyDokely wrote:Masai has shown that he isn't going to nickel and dime his own players, especially ones that have contributed to team success. He's not going to vastly overpay, but he's going to agree to a fair deal that gives the player some favorable aspects, like player options.

And that in turn helps us keep young talent we want or helps some bargain bin guys pick the Raptors instead of other orgs. It may not help with the Star signings but if you build it they might come
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Re: Giving OG that Player Option year was genius 

Post#17 » by lolwut » Fri Jan 14, 2022 3:59 pm

I've always been puzzled by the way TV contracts drive up the salary cap. How are TV deals getting bigger and bigger, while less and less people are subscribing to cable TV? How does the math here work?
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Re: Giving OG that Player Option year was genius 

Post#18 » by DelAbbot » Fri Jan 14, 2022 4:56 pm

Gold Dragon wrote:
DelAbbot wrote:Bonus observation: Scottie Barnes can sign Rookie Scale Extension (4 years or 5 years) just before the beginning of his 4th year in the league (https://cbabreakdown.com/contract-types), which is also Oct 2024 - 1 year before new NBA TV deal starts. We will have OG and Barnes locked up and still have lots of cap space around 2025 & 2026 to get that championship!


Barnes' rookie extension will be a max salary based on a percentage of the salary cap in the first year of that new TV deal, even if it is signed before the new TV deal is signed. So 25% of the new deal cap with 8% raises for 5 years (the 0-6 year vet max) or 30% of the new deal cap with 8% raises for 5 years if he meets the designated rookie extension criteria (winning an All-NBA, DPOY or MVP).

One of the consequences of the new TV deal for the Raptors might be that the next contracts that FVV and GTJ likely will sign after they opt out of the final years of their current deals will be two year contracts with a player option to time their expiry with the TV deal.

This could be good for the Raptors in that they will avoid committing to massive long term contracts for FVV and GTJ that often get teams stuck. But bad because two year deals are not eligible for extension and they will be UFAs when they opt out (just like GTJ will be in his current deal which is also not eligible for extension).

It is likely that the Raptors will be a tax paying team after next season when FVV and GTJ's contracts are up for renewal. This core has until then to prove they are worth going into the tax for. The season after that Pascal, OG and Precious are up for renewal and something will have to give or we will be well over the tax in the year before the new TV deal.


Lots of solid info.

FVV will test FA 2023 (bet on himself), so no extension.
GTJ cannot be offered an extension, so he too will test FA 2023.
Barnes is 25% of cap even if cap goes up with TV deal.
So that likely mean we are not going to give Siakam a max extension based on % of cap in summer 2024. Barnes 25%, Siakam 25%...
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Re: Giving OG that Player Option year was genius 

Post#19 » by DelAbbot » Fri Jan 14, 2022 4:58 pm

bluerap23 wrote:Wait - so you're telling me Masai knows what he is doing?

Masai has been favouring shorter term deals since he got here.


Yeah but we should analyze why he is making these decisions to really appreciate him. This fosters more awareness of NBA cap rules too.
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Re: Giving OG that Player Option year was genius 

Post#20 » by NotMyKawhi » Fri Jan 14, 2022 5:06 pm

idk how this is a good move for an organization.

A player option just gives a player 2 chances at free agency to get paid big. They don't have a big season, they opt in and try again.

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