(The original article was published on May 6, US time, the author is The Athletic writer Danny Leroux, the content of the article does not represent the views of the translator.) )
For the past two years, Harden has been the focus of the NBA's mid-season trading market. Now, he and the Philadelphia 76ers are just a few months away from a truly compelling offseason; Harden has a lucrative player option, while the 76ers management has the opportunity to restructure the team around harden and Embiid's duo. The current situation can evolve in many subtle and confusing ways, so now is a good time to make a list of questions and answers on the key points among them.
1. What are Harden's player options?
In that last-minute super deal, Harden appeared to have neither accepted nor rejected his $47.4 million player option for the 2022-23 season, leaving room for both options. Theoretically, he may also leave the team without executing the player option, but this is unlikely.
2. How much can Harden earn at most, and how can he earn it?
Generally, the most salary a player can earn from a new contract depends only on the number of years he has played in the NBA and the salary cap for that season. Under today's collective bargaining agreements, there are three caps for starting salaries, accounting for 25%, 30% and 35% of the wage cap, respectively. The expected salary cap for the 2022-23 season is $122 million, which means that for veterans like Harden who have played in the league for a decade or more, the starting salary can reach $42.7 million.
However, the collective bargaining agreement includes a special case for top-salary players; a player's annual salary can increase by 5% compared to the previous year, even if the growth will exceed the "general" limit. With Harden's annual salary of $44.3 million for the 2021-22 season, he was allowed to sign a new contract with a starting salary of $46.5 million, even if that far exceeded the "35 percent of the salary cap" starting salary limit. At 76ers, at an annual wage increase of 8 percent, Harden could sign up to a five-year, $270 million contract.
Now, you might be wondering, "Wait, $46.5 million is less than Harden's player options, isn't it?" "Very correct. While the collective bargaining agreement provides a special case of the largest starting salary for free agents, keep in mind that Harden doesn't have to be a free agent this summer, and that he now contracts a higher than 5 percent annual salary increase. So the way Harden can make the most money this offseason is to execute player options first and then renew his contract with a starting salary of $47.4 million instead of $46.5 million. If he does, counting the player option, he could sign up to a five-year, $275 million contract, about $5 million more than the other option mentioned above.
3. What if Harden wants to earn less? So how should it be achieved?
When a player doesn't want to sign the most profitable contract, the collective bargaining agreement becomes very flexible. As a result, Harden's non-top-salary contracts can take many forms. The starting salary for the first season of this new contract is a key parameter. Since the 76ers have Harden's bird rights, they could open such a contract with any starting salary between the minimum standard and the cap of $46.5 million. Subsequently, Harden's salary can rise or fall by 8% year-on-year over the life of the contract.
Let's take an analogy that Harden and the 76ers management have finalized a salary of $40 million for the 2022-23 season in a new contract. 8 percent of that value is $3.2 million, so harden's salary could rise or fall by up to $3.2 million from the previous year starting in the second season of his contract period.
The biggest limitation for such a scheme is the 8 per cent annual variation, as it means that there will be some fluctuations in wages but no large changes. The provisions involving drastic changes in wages could be used to achieve other goals, such as temporarily circumventing the luxury tax or waiting until Harden was far below his current level to give him a sharp pay cut. This means much more to the 76ers than it does to Harden, not least because the two sides may have to negotiate tough negotiations to negotiate purely financial terms (year, salary amount, guarantee of the contract, etc.). But let the 76ers management design the contract in a way that best fits their vision of the team's finances.
4. Is there any other possibility for Harden's next contract?
Yeah, and I would certainly most like to see Harden who is willing not to take the top salary.
Above, I touched on key points in Harden's negotiations with the 76ers management: salary amount versus length of contract, player/team options, and whether the entire contract is fully secure. In the case of Harden's deliberate refusal to take the top salary, the labor agreement's 8% annual wage increase limit may give the 76ers management a greater constraint. However, if Harden executes player options, the following scenario could also happen: Harden signed a new contract with a much lower total price than before after receiving a huge salary of $47.4 million per year for player options. As discussed earlier, collective agreements give players who don't get a top salary more options, especially when it comes to contract extensions.
Theoretically, Harden's salary for the 2023-24 season could be reduced to whatever value he and the team agreed upon, followed by an 8% increase from year to year.
For example, Harden is willing to take an average of $35 million a year instead of a top salary for the next five years. Then a new contract starting from the 2022-23 season might look like this:
However, if Harden executes the player option, then the two sides can agree on the same total five-year salary as follows:
Harden would prefer the second option because he can get more money faster (especially given the time value of the currency). It could also bring more potential benefits to the 76ers, as they will presumably pay the luxury tax in 2022-23, start an effort to avoid taxes from the 2023-24 season, and get rid of the luxury tax altogether in 2024-25, as Tobias Harris' contract expires by then — just before the renewal negotiations between the 76ers and key team rising star Tyrese Maxi. This requires Harden to be willing to accept a contract with a lower overall price, which he does not necessarily do. Still, Harden's pay cut would be a fascinating assumption that could change the team's future.
5. Will the "extend-and-trade" rule affect Harden?
This collective bargain rule will only take effect if Harden enforces the player's option, because the "trade after extension" restriction doesn't affect those who become free agents to sign a new contract less than six months after being traded to a new team. However, if Harden executes the player option and agrees on a "post-renewal deal" with the 76ers, his new contract will only be two years long after the player option year, and the salary increase will be only 5% (on the basis of the $47.4 million player option). Similarly, labor agreements have fewer restrictions on players with lower salaries, but a two-year signing limit may make it difficult for a contract extension to happen right away, even for part of the offseason.
Still, because the "trade after renewal" limit is valid for six months after the trade, Harden can't officially sign a contract extension with the 76ers that includes a player option for a year until August 10 of this year after executing the player option. However, the parties can certainly agree in advance on the form of the contract. In fact, they had to do so because Harden would have made a decision on player options before July. But this is only a temporary inconvenience rather than a limitation.
6. Will the "38 rule" have an impact on Harden?
Harden could thank former teammate Paul for the previous labor agreement that gave players some contract restrictions when they reached 36, but then the players prompted the league to change the age limit to 38. Since Harden is now 32 and only 33 by August, the "38 rule" will not affect him.
7. What if Harden leaves the team this summer? What kind of operating space will the 76ers get as a result?
If Harden doesn't implement the player option and goes to other teams as a free agent, the 76ers can save his salary from the account. But with Embiid and Tobias Harris still in place, the 76ers can only create a modest salary cap: $15-25 million, depending on Danny Green's $10 million non-guaranteed contract, unless they trade some more players who are guaranteed to take it. That's enough for them to sign a player who will help the team, especially if the 76ers management can make some more salary space. However, this has limited appeal to free agents. A more likely time to trade Harden is 2023, when Harris' contract is about to expire and Maxi has yet to start negotiating with the team about his next contract.
Harden could also leave on a sign-and-trade basis, which could give Philadelphia a decent trade exception and/or some players. In that case, the new players or the use of trade exceptions could push the 76ers beyond the salary cap. But the problem is that you still have to use that trade exception to get a new player, and maybe give away some team assets for that.
Original: Danny Leroux
Compilation: Asteroid Fall