The case against signing OG to a new deal
It isn’t a secret that the Raptors are positioning themselves to make a run at Giannis Antetokounmpo in the summer of 2021. But the Raptors aren’t alone in the desire to add The Greek Freak.
The Bucks are on record stating that they intend to offer Giannis the summer max when he becomes eligible in the offseason. Even if Giannis does want to stay in Milwaukee, he doesn’t need to sign now. If the Bucks fail to win the title this year, Giannis can decide to wait and sign the exact same contract next summer.
A lot of players are eager to sign a long term deal for financial security. But the same rules don’t apply for superstars.
This past summer, the Brooklyn Nets signed Kevin Durant to a four-year, $164 million contract even though he was set to miss the entire season with a torn Achilles. When healthy, Durant is one of the three or four best players on the entire planets. As such, paying Durant even though he wouldn’t step on the court for 12 months was still a prudent investment. The same would be true for Giannis.
Assuming the season resumes at some point in time, Giannis appears to be a lock to get his second consecutive MVP trophy. Giannis is only 25 years old and just entering his prime. He is fully capable of playing all five positions. Even if Giannis were to suffer an injury next season, there would still be any number of teams lining up to offer him a max contract.
In addition to the Raptors and Bucks, the Knicks, Heat, and Warriors all have their sights set on Giannis. His free agency will be the biggest storyline since “The Decision” in 2010. As a result, the Raptors have to be careful in terms of managing their payroll.
Currently, the only players with guaranteed contracts for the 2021-22 season are Siakam and Norman Powell (player option). Dewan Hernandez and Matt Thomas also have small unguaranteed deals. The Raptors will have their 2020 and 2021 first-round picks. Plus the team will look to sign VanVleet to a new contract this summer.
The salary cap is projected to increase to $125 million in 2021. However, the NBA could lose around $1 billion due to the coronavirus. The salary cap is directly related to revenue. Marc Berman of the New York Post reported the NBA is preparing for the cap to drop next season. That would likely impact projections for the 2021-22 season as well.
This brings us back to Anunoby. He will be a restricted free agent in the summer of 2021. The way the CBA works is if the Raptors don’t sign Anunoby to a new deal before free agency, he is assigned a cap hold. This is a placeholder amount representing his new contract, which counts against the salary cap.
For Anunoby, his cap hold will be $11.6 million (300% of his previous year’s salary). If the Raptors believe they can sign Anuonby to a new deal at $11.6 million or less then it makes sense to lock him up this offseason. However, if the Raptors believe Anunoby’s new contract will start at a figure higher than $11.6 million, it makes sense to wait.
The Toronto Raptors have the ability to go over the cap to re-sign Anunoby. The Raptors can keep Anunoby’s hold, use their cap space to sign Giannis, and then re-sign Anunoby at a larger figure.
If we are assuming that Anunoby’s next contract will start at around $15 million annually, then the Raptors might want to wait.
The only risk there is Anunoby could get offended that the Raptors made him wait and refuse to sign a multiyear deal. Anunoby could instead opt to sign a one-year qualifying offer and become an unrestricted free agent the following summer.
A maximum contract for Giannis would start at $37.5 million. If VanVleet’s new contract were around $20 million annually and Powell exercises his player option, the Toronto Raptors would have just enough room to offer Giannis a max deal. Signing Anunoby to a new contract first at a number higher than his cap hold would mean the Raptors would have to shed salary elsewhere.
As long as Giannis doesn’t sign a new contract before the start of next season Ujiri and his staff will have to think long and hard before committing resources elsewhere. Anunoby has shown the ability to be a legitimate two-way player. I’m sure the hope is that Anunoby will be in a Toronto Raptors’ uniform for years to come. But it’s not every day that the reigning MVP becomes available.