Shai Gilgeous-Alexander is about to enter the final year of his rookie contract. The Thunder can offer him a max contract extension this summer, and the two parties will have to decide whether that’s in their mutual best interests.
Here’s a look at some of the mechanics of this decision and what else could be decided this summer:
Is Shai Worth a Max? And Does it Matter?
What exactly is a max-contract player?
At Shai’s seniority, he could qualify for a contract up to 25% of the salary cap. If he reaches the All-NBA team next year he’d be eligible for more money (up to 30% depending on which All-NBA team he made).
The question is whether he’s worth the money.
It seems like he is. Before the plantar fascia issues, SGA was clearly the best OKC player on the court and stood a chance of ruining the Thunder’s tank job. He should have been in the running for an All-Star spot, though perhaps at the back end.
He’s at least a near-max player. OKC shouldn’t take the chance of lowballing him. With the current team, Shai is unlikely to win anything in the next couple of seasons. The only real reason for him to stick around is money.
Gordon Hayward is a good example of what might happen if OKC decides to lowball. The Utah front office decided not to give Hayward what he wanted for his contract, then matched his restricted free agent offer sheet from Charlotte. This was a factor in Hayward leaving for Boston — perhaps due to feeling a little miffed over his lowball, but definitely because the three-year offer sheet he signed let him test free agency before Utah’s rookie extension would have. If Hayward’s ankle hadn’t shattered in a freak injury right after he started playing for the Celtics, that contract might look a little different.
The Thunder can’t afford to face a situation like Utah did with Hayward. They need to offer Shai the max.
That doesn’t mean they can’t put some language in the contract to protect themselves. Jaylen Brown’s contract with the Celtics is a good example — it’s technically a max contract, but part of that money is in performance incentives. That guards the team against catastrophic injury or a downturn in performance.
What Does a Max Contract Extension for Shai Look Like?
Depends. But there are a few things we know.
First, Shai is eligible for 25% of the salary cap coming off his rookie contract. He has a chance to bump that up. If he makes an All-NBA team next year he could bring that maximum up to 30%. Based on current salary cap projections that would put him at $28,925,000 for the first year with 8% raises year over year for a 25% max. That would go up to $34,710,000 if he qualified for an All-NBA team.
The Thunder can offer him up to 4 years of maximum salary with a normal contract, but there’s a clause called the “Designated Rookie” provision that would allow them to offer an extra year. The Thunder will likely offer this. They’re probably going to try to lock him in as long as possible.
A max Designated Rookie extension for Shai would start after the end of the 2022 season, and be worth roughly $29 million to $35 million per season over the next five years. That contract would run through 2027.
Would Shai Take the Extension?
If the Thunder offer the extension there’s a good chance Shai takes it. There may be some back and forth over the language, but a 5-year max extension looks like a good deal for both sides.
Shai may want to opt out earlier, in which case you might see something like a 3-year contract with a player option that would let him hit free agency when he’s eligible for a 30% max due to seniority. OKC won’t want to do that, but it’s an option on the table.
Stay tuned this summer to see what happens with Shai’s extension. If they sign him for the full 5 years it’s a safe bet both sides see him as an integral part of the future in OKC.
Shai will be eligible to sign an extension when NBA free agency begins on August 2.