Timberwolves

The Two Paths of Jimmy Butler's Next Maximum Contract

(photo credit: Jim Faklis)

Forty-three players in the NBA are making more than the $19.3 million that 28-year-old Jimmy Butler will be paid this season.

His deal increases by 6 percent next season, but even at a tick above $20 million, Butler will only be paid as a good player. Butler is not a good player; he is one of the best, trending towards his second straight All-NBA season.

For that reason, he wants a raise.

“I’m not worried about it,” Butler said, as read by TNT reporter David Aldridge during last Friday’s game against the Lakers. “In the most humble way possible, if they don’t take care of me this summer — or the summer after that — I’m going to play somewhere.”

The true oddity with Butler’s contract and this whole situation — if we are calling it a situation — is the idea that he needs a raise. Just two summers ago, Butler signed the contract he is currently on. Then with the Bulls, Butler signed a deal percentage points below a “maximum” at five years, $95 million.

Jimmy Butler’s Current Contract

2015-16 2016-17 2017-18 2018-19 2019-20
$17.5 mil $18.1 mil $19.3 mil $20.4 mil $19.8 mil (player option)

Unfortunately for Butler, that deal was signed one summer before the league’s massive salary cap jump from $70 million to $94.1 million. Because of this, Butler is making less money than players at his same position, like Nicolas Batum ($22.4 million), Chandler Parsons ($23.1 million) and Otto Porter ($24.8 million) who all signed deals post-cap spike.

Fortunately for Butler, that money can be made up – and then some – as soon as this summer. If the Wolves intend on keeping Butler at maximum dollars, there are two paths to getting there.

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Path One: Renegotiation and Extension — Five years, $143.7 million

Remaining on Butler’s deal is $20.4 million for 2018-19 and then a player option for $19.8 million in 2019-20 — an option he will almost certainly turn down. Path Two will look at allowing that deal to play out while Path One illustrates how he could find more dollars next season.

The league’s collective bargaining agreement has a clause that could allow Butler to renegotiate his contract up to $24.5 million this summer and then extend it for three additional seasons (five in total). From the $24.5 million next season there could be annual raises of eight percent.

Jimmy Butler’s Maximum Contract if Renogtiated and Extended (5 years, $143.7 million)

2018-19 2019-20 2020-21 2021-22 2022-23
$24.5 mil $26.5 mil $28.6 mil $30.9 mil $33.3 mil

In the recent past, we have seen both the Oklahoma City Thunder and Houston Rockets employ this renegotiate-and-extend strategy to appease Russell Westbrook and James Harden.

The issue the Wolves have that the Thunder and Rockets did not is the amount of salary cap space that will need to be created to boost Butler to his max. Minnesota will need to have $4.1 million in salary cap space — the difference between Butler’s $20.4 million and the $24.5 million.

With $110.2 million in guaranteed contracts for next season and the salary cap projected to be $101 million, the Wolves would need to cut down to $96.9 million in guaranteed salary to create the necessary space for Butler. Getting rid of $13.3 million is going to be tough.

Minnesota Timberwolves 2018-19 Salary Ledger

Player 2018-19 Salary
Andrew Wiggins $25,250,000
Jimmy Butler $20,445,779
Jeff Teague $19,000,000
Gorgui Dieng $15,170,787
Taj Gibson $14,000,000
Karl-Anthony Towns $7,839,435
Cole Aldrich $6,956,021 ($2 million guaranteed)
Jamal Crawford $4,544,400 (player option)
Justin Patton $2,667,600
Tyus Jones $2,444,053
Shabazz Muhammad $1,795,015 (player option)
Kevin Martin $1,360,304 (waived and stretched)
Nemanja Bjelica Restricted Free Agent
Marcus Georges-Hunt Restricted Free Agent
Aaron Brooks Unrestricted Free Agent
Anthony Brown Unrestricted Free Agent
Amile Jefferson Unrestricted Free Agent
Guaranteed Total: $110,233,979

To create the necessary space, Minnesota could need to move two of Gorgui Dieng ($15.2 million), Jeff Teague ($19 million) or Taj Gibson ($14 million). Those trades are necessary as the Wolves will likely need to take back salary when trading any of those players.

Additionally, they also have Oklahoma City’s first-round pick this summer — from the Ricky Rubio trade — which comes with a cap hold (approximately $2 million) and they also have to fight against minimum contract roster holds (approximately $1 million per spot) for 12 roster spots at all times. Those figures do not show up on the current ledger but will this offseason.

Even if they trade Cole Aldrich (plus-$2 million), convince Shabazz Muhammad to opt out (plus-$1.8 million) or convince Jamal Crawford to opt out (plus-$4.5 million) there is still a mountain to climb.

Additionally, the $110.2 million does not include cap holds for Nemanja Bjelica, Marcus Georges-Hunt, Aaron Brooks and the two-way contract guys. Renouncing Bjelica would be the hardest loss to absorb. If the Wolves want to retain Bjelica while renegotiating Butler to the max they would need to cut an additional $7.5 million (Bjelica’s cap hold) elsewhere.

In so many words, it is possible to create space to renegotiate Butler’s deal but a gutting of the roster — to some degree — would be necessary.

What would be the advantages of taking this path?

1. Butler is locked up for the next five years.

Locking up stars is almost always a good idea. This path would never let Butler test the market and it also locks in a year earlier than Path Two (re-signing Butler in 2019). That is important because starting a five-year maximum contract at 29 is a lot better than starting a five-year deal at 30. Butler at $33.3 million at age 33 will be a pill to swallow, but 34-year-old Butler at $44.1 million could be poisonous.

2. The deal would be holistically cheaper than waiting a year.

Path Two — elaborated on in a second — would cost over $46.4 million more over the life of the deal.

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Path Two: Wait Until 2019 For Maximum Contract — Five years, $190.1 million

The Wolves do not have to renegotiate and extend Butler. In theory, Butler can simply play out the fourth year of his current deal next season and opt out of his $19.8 million player option in 2019-20. This would make Butler an unrestricted free agent in the summer of 2019.

An unrestricted free agency, of course, comes with the risk of Butler walking but the Wolves would be able to offer Butler an extra year and $50 million more than any other team on the open market. So, not too many concerns on that front.

Unfortunately for the Wolves, this scenario would boost the price tag of his maximum deal. The salary cap is projected to boost to $108 million in 2019-20 which means Butler’s first season would be 30 percent of $108 million ($32.4 million) rather than the $24.5 million from Path One.

Jimmy Butler’s Maximum Contract If Signed in 2019 (5 years, $190.1 million)

2019-20 2020-21 2021-22 2022-23 2023-24
$32.4  mil $35.0 mil $37.8 mil $40.8 mil $44.1 mil

 

What would be the advantages of doing this?

1. The roster would not need to be gutted as it was in Path One.

Retaining Butler in free agency and signing this contract would not require creating cap space like a renegotiation would. In theory, this means Bjelica and Georges-Hunt (and Brooks) would not need to be renounced. Muhammad and more importantly Crawford would not need to opt out of their 2018-19 player options. And previous trade necessities (two of Teague/Gibson/Dieng) would not need to be moved.

Instead, this path leads to a preference in taste for how deep Wolves owner, Glen Taylor, wants to dig into his pockets. Signing Butler to this deal would only be restrictive in the sense that the Wolves would exceed the luxury tax threshold (projected to be $131 million in 2019-20). For every dollar the team’s total salary exceeds the luxury tax line, an additional $1.50 tax would need to be paid. Exceed the tax for consecutive years and the tax becomes more punitive, up to $4.75 per dollar per season.

Again, this would be a matter of preference. The luxury tax line’s restriction lies in the eye of the beholder; in this case Taylor’s.

(Sage Timberwolves writer for The Athletic, Britt Robson, likes to remind me that championship-caliber teams are expensive. My response: That tax is no joke.)

2. Butler is locked up for the following five years.

In this scenario, Butler, Wiggins, and Karl-Anthony Towns are all locked up through 2022-23 — assuming Towns signs a rookie contract extension this summer. Knowing Butler can shepherd Towns and Wiggins well into their primes is an exciting thought for Wolves fans.

However, it is important to note Towns’ deal will also be very expensive. If Towns makes the All-NBA team next season, his contract will also begin the same year as Butler’s and cost $190.1 million over five years. (Five years, $158.4 million if he misses All-NBA in 2018-19.)

All-NBA or not for Towns, this is going to be the most expensive three-player core in NBA history.

Maximum Contracts For Butler, Towns, and Wiggins

Player 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
Jimmy Butler $20.4 mil $32.4 mil $35.0 mil $37.8 mil $40.8 mil $44.1 mil
Karl-Anthony Towns $7.8 mil $32.4 mil $35.0 mil $37.8 mil $40.8 mil $44.1 mil
Andrew Wiggins $25.3 mil $27.3 mil $29.3 mil $31.3 mil $33.3 mil Unrestricted free agent
Sum of Big Three $53.5 mil $92.1 mil $99.3 mil $106.9 mil $114.9 mil $88.2 mil
Salary Cap Projection $101.0 mil $108.0 mil $113.4 mil $119.1 mil $125.0 mil $131.3 mil
Luxury Tax Line $123 mil $131 mil $137.6 mil $144.4 mil $151.6 mil $159.2 mil

 

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What Is The Better Path?

Keeping Butler happy is the most important variable here. If he demands an extension this summer, then it’s roster gutting time. If he is amiable to waiting a year, that is ideal despite the heightened cost.

The roster gutting in Path One could be brutal. While Teague and Dieng are probably overpaid, they are still players with a positive on-court impact. Their production likely would not be able to be replaced through mid-level exceptions and veteran minimum contracts. Additionally, every player gutted is another set of lost Bird Rights — the salary cap exception crucial in insulating stars with capable players.

Sure, the financial figures in Path Two are daunting down the road. The idea of Butler, Towns and Wiggins combining for 92 percent of the cap in 2022-23 is almost laughable. But getting caught up in salary cap restriction five years from now is — in many ways — fool’s play.

Who knows how the league’s snowglobe will have been shaken by that point in time?

The reality — if we take Butler’s comments literally — is that one of these two paths must be taken. This is the cost of doing business in the NBA’s current economic landscape. However, constructing superteams costs more than seasons past — due to the rate at which stars can now be paid.

We have already seen the Los Angeles Clippers take a similar plunge with Blake Griffin and the five-year, $171 million contract he signed this summer. It took the Clippers six months to renege on that pact once it became clear that the pieces surrounding Griffin were not going to be enough.

The Washington Wizards are similarly staring down a barrel with John Wall and his five-year, $207 million contract extension, also signed this summer. If the Wizards do not take a big step forward in the near future, they too could be looking for a way out.

This isn’t to say that signing superstars — like Griffin, Wall, and Butler — should be viewed as front office malpractice but it does shine a light on the importance of the pieces that surround the said star. For the Clippers, DeAndre Jordan and Danilo Gallinari were not enough to insulate Griffin. For the Wizards, Bradley Beal and Otto Porter probably won’t be enough either.

Will Towns and Wiggins suffice for Butler? Their maximum contract extensions — that are about to be far more expensive than Jordan and Gallinari or Beal and Porter — are a bet by Tom Thibodeau that the answer to that question is yes.

All salary data used is from basketballinsiders.com.

Correction: In a previous version of this story, a quote from Jimmy Butler was stated as a firsthand account. That has since been changed to a second-hand quote, as reported by TNT’s David Aldridge. The salary figures in Path One have also been updated so as to represent a 120% raise rather than a raise to 30 percent of the 2018-19 salary cap.


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