With the Pistons’ 2015-16 roster filled to overflowing with holdovers, trade acquisitions, draft picks and both new and retained free agents, all President and Head Coach Stan Van Gundy has to do now is prepare for the coming basketball season.
Nevertheless, there is a huge (6’-11" and 270 lbs., to be more exact) item still on his to-do list: negotiating a contract extension with franchise cornerstone Andre Drummond. While the Pistons have indicated that discussions are underway, there has also been talk that they would prefer to wait until next summer to lock up Drummond with a long-term deal.
The pros and cons of this decision are already being discussed and debated by fans. By signing an extension before October 31, Drummond can obtain the security of a five-year maximum contract guaranteeing him up to $120 million or more. If he waits until next summer to sign, when he will become a restricted free agent (RFA), the money will remain the same. But Drummond will also risk the chance of suffering a severe injury this next season, which could potentially lessen his value. Likewise, if his play in 2015-16 does not live up to expectations, the franchise might entertain second thoughts about compensating him as a "max player."
As the old saying goes, "The devil is in the details." Let’s take a look at the actual salary cap implications of Drummond signing an extension this year, or waiting until next summer.
Detroit has until October 31 to sign Drummond to a contract extension. If they fail to reach an agreement before then, he will automatically become a RFA next summer. Since owner Tom Gores has publically said that the 21-year-old center is a "max player," the stated goal is certainly to sign him to a four or five year deal. Based on the max contract extension that fellow 2012 draftee Damian Lillard has reportedly inked with Portland, we can expect that Drummond will probably receive a five-year/$120 million offer.
This number presumes that the NBA’s salary cap will rise to approximately $90 million for the 2016-17 season. The actual numbers will be based on the cap that is set by the league’s Board of Governors before free agency begins next July 1. Signing an extension now will not penalize Drummond financially, since his new salary will not take effect until that season.
As the Pistons’ roster currently stands, this is what their salary commitments for 2016-17 will be when free agency opens in 2016 if Drummond has already signed an extension:
|PLAYER NAME||2016-17 SALARY|
The above list includes 12 players, which is the minimum number that NBA teams are required to carry. For cap purposes, the Pistons will also have to include a salary for their first round draft pick, and that amount will depend on how high they draft. But the total will be approximately $76 million – about $14 million under the anticipated salary cap.
This figure does not factor in the "cap holds" for Detroit’s own free agents, however. While Steve Blake, Brandon Jennings and Anthony Tolliver will no longer be under contract, they will count for about $19.2 million against the cap until they are either renounced or sign new deals. So if the Pistons want to maintain their ability to go over the cap to retain Blake, Jennings and Tolliver, they will essentially have no free cap space next summer.
On the other hand, the contracts for Ersan Ilyasova and Joel Anthony are not guaranteed for 2016-17, which could make about $10 million more available. Detroit also has a team option for Bullock’s salary, which can free up some additional cash. So if all their options for shedding salary are employed, Van Gundy will have well in excess of $20 million to spend on a major free agent target next summer even after extending Drummond this year.
While it is certainly premature to plan to move on from Ilyasova even before he has fired a shot for the Pistons, the power forward position currently appears to be the spot most in need of a long range plan. If a better solution were to present itself through free agency, or even a midseason trade, it’s not as though Van Gundy has made a major commitment to either Ilyasova or Tolliver. Neither player was acquired at the expense of a major asset.
The main reason given to delay signing Drummond to an extension is that it will free up even more cap space for securing free agents next summer. Since his cap hold will be about $8.2 million if he waits to sign, this can give Detroit nearly $13 million more to spend. If Jennings and Tolliver are also renounced, that will make about $27 million available. Releasing Ilyasova can bring the total to $35 million.
If Detroit wants to enter into the "Kevin Durant Sweepstakes," that level of cap space is essential to play. It is very questionable, however, whether Durant is a realistic target, and after him the fall off in free agent talent will be considerable. The Pistons did not find much success in pursuing the upper level free agents this summer, so there is no guarantee they will find this an easier task in another year. Since the cap will probably rise about $20 million from its current level of $70 million, plenty of teams will have more money to spend in 2016. The competition for free agents may be fierce, which will create intense pressure to overspend.
While many observers have assumed that it is to Detroit’s advantage to hold off until next summer to extend Drummond, waiting also poses some risks for the team. Drummond may play so well that he decides his interests are better served by a short-term contract. He may even consider choosing the option Greg Monroe took last summer, signing the qualifying offer so he can become an unrestricted free agent (UFA) in 2017.
Since the cap is projected to rise to about $108 million in 2017, Drummond could field even more lucrative offers as an UFA that summer. While we have no reason to question his loyalty to the franchise, he may think twice if Gores and Van Gundy show any hesitation in signing him to a max contract before this season opens. And if the team falters and misses the playoffs for a seventh straight year, Drummond may start longing for greener pastures.
So while the choice of sign now (that is, by October 31) or later (July of 2016) may appear simple, there are many variables that enter into either choice. While waiting until next summer to secure an extension will give the Pistons greater cap space to otherwise improve the team, it also gives them less assurance that their franchise player will be in the fold for the long term. This delay will also provide Drummond with less security, perhaps tempting him to explore shorter term options that have the potential to maximize his earning power. In four years he will be a seven-year veteran, eligible to sign a contract for 30 percent of the salary cap. Locking him up for five years now can save Detroit millions down the road, and further delay the day when Drummond becomes an UFA.
Whether he signs "now" or "later," there are no guarantees for how either choice will work out for either Detroit or Drummond. But if the Pistons truly believe he is a "max player" they can build their team around, the only reason to delay his extension until next summer is to make more money available to lure a high-profile free agent like Durant. While this may be an admirable hope, maintaining it will come at the real risk of failing to secure the services of their star center.
That is a risk the Pistons simply should not take. Their best choice is to sign Drummond to a long-term contract, just as New Orleans and Portland have already done with their 2012 rookies. As another old saying goes, "A bird in the hand is worth two in the bush."