Timberwolves

MOORE: The Financial Implications of All-NBA Awards for Towns, Butler

Mandatory Credit: Brace Hemmelgarn-USA TODAY Sports

Kevin Durant, Steph Curry and Draymond Green were the only pair — or in their case grouping — of teammates to make an All-NBA team a season ago. On Wednesday afternoon, Karl-Anthony Towns and Jimmy Butler crossed that elite threshold as teammates when the pair were awarded 2017-18 All-NBA third team honors.

For their respective contributions, this is, of course, an excellent accolade that the two both deserve. Towns asserted himself as one of the league’s most dynamic offensive threats; only Curry outshot Towns this season when measured by true shooting percentage. Butler also helped instill a winning culture with his leadership and two-way ability; he was named to the All-NBA Defensive second team while also averaging 22.2 points per game on the most efficient shooting of his career.

The Wolves are on the map. Towns and Butler put them there but these accolades imply — or, in Towns’ case, could require — higher salaries going forward. Both Towns and Butler are in the final season of their contracts when the 2018-19 season rolls around and are thus up for extensions this summer.

Maximum $188 Million Extension For Towns

Through making an All-NBA team, Towns is eligible to negotiate for up to 30 percent of the 2019-20 salary cap ($32.4 million in year one). If the Wolves choose to offer him a five-year extension using the Designated Player Rule, he can earn up to $188.2 million with the Wolves through 2023-24. Had Towns not made an All-NBA team, his negotiating power would have been limited to 25 percent of the cap ($27 million in year one) and $156.8 million in total.

Year Towns All-NBA Max Towns No All-NBA Max
2019-20 $32.4 $27
2020-21 $34.8 $29
2021-22 $37.4 $31.2
2022-23 $40.3 $33.5
2023-24 $43.3 $36.1
Total $188.2 $156.8

Salary figures from $108 million cap estimate in 2019-20.

The $188 million figure is not a lock; it is the maximum of Towns’ negotiating ability. When Towns and his agent Leon Rose sit down with the Timberwolves’ brass, the range negotiated will be between those two numbers and likely dependent on next season’s accolades (All-NBA, MVP, etc.).

Rose also negotiated a similar type of deal for his other elite big man client, Joel Embiid, a season ago. In these negotiations with Minnesota, Rose will have some extra leverage than he did in Philadelphia, given the full maximum amount handed to Wiggins a summer ago.

Couple Towns’ elite performance with the historical precedence — Embiid and Wiggins — and that $188 million upper-end is not only likely but should be the assumption for the team’s accounting forecasts going forward.

Will Butler Receive $188 Million Maximum?

For Butler, his All-NBA accolade does not ensure anything, even though it his second straight season making an All-NBA team. Because Butler was traded from Chicago to Minnesota, the award does not trigger an additional 5 percent of the cap to become eligible for Butler (up to 35 percent) like it does for Towns (up to 30 percent). Butler does not meet the qualifications to be a Designated Player — because he was traded — and therefore, with seven years of NBA experience, Butler is restricted to the 30 percent maximum. Meaning, like Towns, Butler can sign a five-year contract with the Wolves — if he waits until after next season — for the same $188 million figure.

There is, however, some grey room on Butler’s deal due to his age; the full max should not be the assumption like it is for Towns. Even if currently the superior player, Butler will be 30-years-old entering the 2019-20 season whereas Towns will only be 23.

As always, age matters.

The Wolves could reward Butler for his service and disregard a bit of logic, as they did with Wiggins, in the name of accruing goodwill by offering Butler the full-$188 million. But with the idea that the latter years of the new contract would likely be underwater when measured against performance, the max should not be viewed as a lock.

If the past season’s All-NBA crop is used as an example, there is a (small) precedent of great players not receiving their topmost salary.

Nov 29, 2017; New Orleans, LA, USA; Minnesota Timberwolves guard Jimmy Butler (23) dunks over New Orleans Pelicans center DeMarcus Cousins (0) during the second quarter at the Smoothie King Center. Mandatory Credit: Derick E. Hingle-USA TODAY Sports

In 2015-16, Kyle Lowry made the All-NBA third team and the following season he did not make any of the All-NBA teams. It was that next summer (2017) when Lowry became an unrestricted free agent. Instead of receiving the full maximum, the Raptors signed the 31-year-old Lowry to a three-year, $100 million deal rather than a full five-year maximum.

DeMarcus Cousins and Isaiah Thomas are two other examples of players who will likely sign for less than the max this summer, a year — or two years in Cousins’ case — after making an All-NBA team. The reason in these cases is an injury concern. While Butler has not suffered as critical of an injury as Cousins did to his achilles and Thomas to his hip, he does have a history of missing games. Since becoming a full-time starter with the Bulls in 2013-14, Butler has averaged 67 games played per season — and those missed games were not due to rest.

A potential middle-ground — in line with Lowry’s earnings and avoiding the risk of falling into an injury and out of favor like Cousins and Thomas — is an extension this summer for Butler.

The league’s collective bargaining agreement only allows for extensions to increase a player’s salary by 20 percent. For Butler and his 2018-19 salary of $20.4 million, this would set the maximum he could earn on the extension route at $24.5 million for 2019-20. With the full 7.5 percent raises, this would pay Butler $142.3 million through 2023-24.

Year Butler Max Butler Extension At Max
2019-20 $32.4 $24.5
2020-21 $34.8 $26.3
2021-22 $37.4 $28.3
2022-23 $40.3 $30.4
2023-24 $43.3 $32.7
Total $188.2 $142.3

Salary figures from $108 million cap estimate in 2019-20.

On the other hand, Lowry, Cousins, and Thomas are exceptions to the norm when it comes to projected pay for All-NBA players. A season ago, Russel Westbrook, James Harden, Steph Curry and John Wall all made All-NBA teams and received $200 million contracts in the following months.

Butler feels like he falls somewhere between those two classes. Given the league’s financial crunch (almost no one has cap space), Butler could opt for security and take the extension.

One way or the other, Towns and Butler both making the All-NBA team make the daunting financial future real. Given the presence of Andrew Wiggins’ five-year contract that will have four years and $121.2 million remaining once Towns and Butler become free agents, the exact dollar figures for the other two pillars of the franchise are critical.

This is important not only for Glen Taylor’s wallet but for the sake of a fanbase who knows this team needs more but will be restricted in acquisitions due to the luxury tax’s punitive nature.

Every dollar under $188 million for either Towns or Butler is a win for Taylor and the fanbase. Unfortunately, the league essentially stamping Towns and Butler as top-15 players in the NBA hurts the possibility of those figures falling much lower than the $188 million threshold.


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