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The Three Paths of Andrew Wiggins’s Next Contract

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Andrew Wiggins is not yet (and may never be) an NBA superstar, this leads to some ambiguity as to how Wiggins’s next contract will look. These are his three options.

NBA: Minnesota Timberwolves at Toronto Raptors Nick Turchiaro-USA TODAY Sports

The Minnesota Timberwolves have long been in the enviable position of having young talent on rookie scale contracts. This offseason begins Phase Two, rookie contract extensions. A rookie contract extension can be offered after a player’s third season and before their fourth season starts. Gorgui Dieng gave us a taste of this last offseason when he signed a rookie extension on October 31st for $64 million over four years. Next up are Andrew Wiggins and Zach LaVine who just completed their third year in the league.

Given LaVine’s ACL tear, there is speculation that his contract negotiations may be on hold. Wiggins is more likely to take the plunge into contract number two. As an enticing but imperfect player, the University of Kansas product and Toronto native has an unclear path as to what is best not only for him but for the Wolves franchise. Finding a place where Andrew and Minnesota’s desires intersect is a complicated calculus that has to take one of three paths.

Option 1: A Rookie Contract Extension (summer 2017)

Option 2: Testing the Market in Restricted Free Agency (summer 2018)

Option 3: Accepting the Qualifying Offer (summer 2018)

In an effort to reward franchises for drafting and cultivating young talent, the NBA has a system that encourages a player to stay with the team that drafted them. The power of team control has never been more intense. When a rookie is drafted, their employer obtains a certain level of control over them for (up to) nine years.

This control is divided into two parts;

1. A four-year rookie deal.

2. A second contract, or contract extension, for (up to) five years.

Option 1: Rookie Contract Extension

NBA: Minnesota Timberwolves at Indiana Pacers Trevor Ruszkowski-USA TODAY Sports

Andrew Wiggins is in the final year of his rookie scale contract that will have paid him $24.9 million over its four-year duration. It is now time for part two. The most lucrative and secure financial path for Wiggins is to accept a rookie contract extension. That extension can be as large as five years and approximately $148 million. Wiggins would sign before the 2017-18 season and the pay raise would begin at the beginning of the 2018-19 season.

Wiggins Five-year Maximum Contract Extension Price Tag

Year Max Contract Extension w/ Wolves
Year Max Contract Extension w/ Wolves
2017-18 $7,574,323
Contract extension kicks in 2018-19
2018-19 $25,500,000
2019-20 $27,540,000
2020-21 $29,580,000
2021-22 $31,260,000
2022-23 $33,660,000
Five-Year Extension Total $147,900,000

This would be the “Paul George Path.” Before the 2013-14 season, the Indiana Pacers signed the, then, 23-year-old George to a five-year extension that kicked in at the beginning of the 2014-15 season. George was the hands-down best player on the Pacers and it was a no-brainer for Indiana to bring him back at the then maximum price tag of five years and $91.6 million.

In an interview with NBA.com, after signing the extension, George stated, “I just see myself as our guy, our team’s guy. Whatever it is, it has to start with me.”

Many expect this to be the path the Wolves take with Wiggins. It is the safest bet for locking in Wiggins’s talent.

The issue with this path for Minnesota is the price. To be blunt, Wiggins is not the Wolves “guy” and therefore may not be “worth” the maximum price tag. When George signed his max contract extension, he was coming off of being selected to the All-NBA Third Team. Wiggins is not at that level. But if Wiggins demands a max contract, the Wolves can oblige or (through the team control they have) pursue another option that buys them a year.

Option 2: Wait for Restricted Free Agency

NBA: Utah Jazz at Minnesota Timberwolves Jesse Johnson-USA TODAY Sports

While Wiggins may not be worth a max in the eyes of Wolves management this offseason, he may be worth it a year down the road. If the Wolves want, they can wait a year to begin negotiations. At that point in time, Wiggins will have become a restricted free agent. While this may perturb Wiggins, it will better ensure paying him market value on his next contract.

These rights that shackle Wiggins (or any player) to the team that drafted them is called the “right of first refusal,” better known as restricted free agency. (While Wiggins was not drafted by the Wolves, his negotiations functionally work the same way.)

A player becomes a restricted free agent after the fourth and final year of his rookie contract is completed. If Wiggins does not receive a rookie contract extension, his restricted free agent negotiations will begin in July of 2018. He will have the option of re-signing with the Wolves (at a price the Wolves agree too) or testing the market.

Even if Wiggins tests the market, the Wolves still have control.

The main caveat of restricted free agency (or right of first refusal) is that even if a player tests the market and signs an “offer sheet” with another team, the team who drafted that player can match that offer sheet at any dollar value.

A big name example of this “matching” happened with the Utah Jazz and Gordon Hayward during the 2014 offseason. That summer, the Jazz, and Hayward did not agree on a contract so, in response, Hayward tested the restricted free agency market and signed an offer sheet (four years, $63 million) with the Charlotte Hornets.

The Jazz could have offered Hayward a contract similar to Paul George but opted to take the restricted free agency route and instead matched the offer sheet Hayward signed, retaining him on those exact (and cheaper) terms.

Part of the reason that Hayward tested the market was because he wanted a five-year contract that the Jazz did not offer him. This “disagreement” may have occurred because franchises were, then, allowed to offer only one five-year extension. Utah either did not want to offer Hayward a fifth year or may have been saving that fifth year for another player on their roster.

(It was this same rationale that saw the Wolves pass on offering Kevin Love a five-year extension when his rookie deal came to a close. At that time, there was speculation that the Wolves were saving the five-year mega-extension for Ricky Rubio or, their recent number two overall draft pick, (gulp) Derrick Williams.)

Some good news for the Wolves of today is found in the new collective bargaining agreement allowing teams to offer, not one, but two five-year contracts. But the Wolves have three young and talented players bidding for that fifth year. With Karl-Anthony Towns next contract looming the Wolves hand will be all but forced to pick favorites between Wiggins and LaVine when throwing that extra piece of leverage into negotiations.

While, in theory, the Wolves could extend or sign all three players—two for five years and one for four years—there is a chance that the player who does not receive a five-year contract opts to test a different path, a la Hayward.

That would not be terribly detrimental as the Wolves would still own the right of first refusal and be able to match any offer sheet. This all could lead to a scenario in which the Wolves extend Towns for five years through 2023-24, Wiggins (if he receives the second five-year contract) through 2022-23, and LaVine (if he receives a four-year contract) through 2021-22. All equating to nine years of team control for Towns and Wiggins and eight years of control on LaVine.

This would be spectacular for the Wolves as a whole, and especially spectacular if they can effectively negotiate so as to pay all three players at fair value. But, again, Wiggins could become perturbed with this route as it does not treat him like Paul George.

Option 3: Qualifying Offer Armageddon

NBA: Milwaukee Bucks at Minnesota Timberwolves Brad Rempel-USA TODAY Sports

Wrapped into the laundry list of caveats surrounding the rookie scale in the NBA’s collectives bargaining agreement is one more rarely used mechanism that could derail the Wolves team control over the Wiggins-LaVine-Towns core. The qualifying offer.

Essentially, the qualifying offer is a one-year contract a player’s current team must tender to obtain that right of first refusal. If the qualifying offer is not tendered, the team renounces that player’s restricted free agency rights. In other words, before Wiggins “tests the market,” the Wolves must offer the qualifying offer.

The qualifying offer is almost always tendered and that is because the price of the qualifying offer is cheap. For Wiggins, his qualifying will be $9.8 million, LaVine’s will be $4.4 million, and Towns will have a qualifying offer of $10.2 million. This figure is calculated by taking 130% of the salary a player received in the fourth and final year of their rookie scale deal.

Wiggins-LaVine-Towns Qualifying Offers

Player 2014-15 salary 2015-16 salary 2016-17 salary 2017-18 salary 2018-19 salary Qualifying Offer
Player 2014-15 salary 2015-16 salary 2016-17 salary 2017-18 salary 2018-19 salary Qualifying Offer
Andrew Wiggins $5,510,640 $5,758,680 $6,006,600 $7,574,323 n/a $9,846,619
Zach LaVine $2,055,840 $2,148,360 $2,240,880 $3,202,218 n/a $4,428,667
Karl-Anthony Towns n/a $5,703,600 $5,960,160 $6,216,840 $7,839,435 $10,191,266

At those cheap prices, it is a no-brainer to tender the qualifying offers to Wiggins, LaVine, and Towns as all three players would be a tremendous value at that cost.

There is, however, a catch. When the qualifying offer is tendered the player can, in theory, simply accept it. The (small) incentive in accepting the qualifying offer is that the right of first refusal is lost, allowing that player to become an unrestricted free agent the following offseason. In this rare case, team control drops from (up to) nine years and down to a flat five years. This is very rare because, again, the qualifying offer often falls well below the player’s marginal value.

But it has happened.

In the 2014 offseason, Greg Monroe was probably the highest profile player ever to accept his qualifying offer. Monroe had reportedly been offered a five-year, $60 million deal to stay with the Pistons, but instead accepted his $5.5 million qualifying offer to play out a fifth and final year in Detroit.

Monroe, then, became an unrestricted free agent the following summer. In the following 2015 offseason, freed from the shackles of Detroit who had recently drafted Monroe’s replacement (Andre Drummond), Monroe signed a three-year deal worth $51.5 million to play for the Milwaukee Bucks. Instead of one five-year deal worth $60 million, he wound up with two deals that spanned four years and $57 million. Monroe sacrificed a bit of security, bet on himself, and wound up recouping most of the money.

Accepting the qualifying offer was the only way Monroe could guarantee himself freedom from the team that drafted him.

Andrew Wiggins Path out of Minnesota

In the case of the Wolves, the player most likely to take this path would be Andrew Wiggins. This is because Wiggins’s qualifying offer, while still a bargain, is relatively large due to the salary slot he falls in as a first-overall pick. In comparison, LaVine’s qualifying offer is much lower—$4.4 million, instead of $9.8 million—because he was a 13th overall pick.

If Wiggins were to take this route, he would do so by turning down a multi-year max (or near-max) contract to play on a one-year deal at the cheap price of $9.8 million.

While turning down a deal as large as five years and $148 million deal in lieu of a one-year $9.8 million qualifying offer seems preposterous, hear me out.

Wiggins could accept the qualifying offer, play out his fifth year in Minnesota, and become an unrestricted free agent the following offseason. As an unrestricted free agent, Wiggins could then sign a four-year max deal worth approximately $110 million with any team he wants. (Maybe his hometown Toronto Raptors.)

Andrew Wiggins’s Next Contract Options (At Max)

Year Re-Sign in Minnesota Sign QO, then Elsewhere
Year Re-Sign in Minnesota Sign QO, then Elsewhere
2018-19 $25,500,000 $9,800,000
become UFA and sign 4-year max
2019-20 $27,540,000 $25,500,000
2020-21 $29,580,000 $26,775,000
2021-22 $31,260,000 $28,050,000
2022-23 $33,660,000 $29,325,000
Five-Year Total $147,900,000 $119,450,000

While $28 million is a significant difference, the importance of that margin lies in the eye of the beholder. In a new NBA where star players are set to sign two (maybe three) massive contracts over the course of their career, Wiggins has the potential to make $300 million or more in his career if he becomes the player many speculate he can be.

In that scenario, and on a macro-scale, $28 million begins to pale. External factors, like personal preference, are real for professional basketball players and can sometimes distract from rational and fiscally responsible decision making.

That $28 million number shrinks if the Wolves do not believe Wiggins is worth the five-year mega-extension. Last offseason, this was the sentiment of the Milwaukee Bucks and Utah Jazz as they convinced their star players, Giannis Antetokounmpo and Rudy Gobert, to accept deals smaller than the five-year mega-extension. Antetokounmpo signed for four years and $100 million and Gobert signed for four years and $102 million.

Antetokounmpo and Gobert (both) went on to become members of the All-NBA second team this season and that, again, seems unlikely for Wiggins. If the Wolves are only willing to pay Wiggins a number that matches Antetokounmpo’s annual salary but still offer five years, the gap between what he could make in Minnesota and in the qualifying offer route shrinks to a mere $5.5 million.

Andrew Wiggins’s Next Contract (Below Max)

Year Re-Sign in Minnesota Sign QO, then Elsewhere
Year Re-Sign in Minnesota Sign QO, then Elsewhere
2018-19 $25,000,000 $9,800,000
become UFA and sign 4-year max
2019-20 $25,000,000 $25,500,000
2020-21 $25,000,000 $26,775,000
2021-22 $25,000,000 $28,050,000
2022-23 $25,000,000 $29,325,000
Five-Year Total $125,000,000 $119,450,000

Calculating Wiggins’s worth is a complex calculus of many variables, but it is of note that every dollar below the max Wiggins is offered is a dollar that theoretically makes the qualifying offer more appealing. This goes to show the delicate line the Wolves are navigating in their negotiations with Wiggins.

The Wolves may have the leverage of team control, but the qualifying offer levels the playing field.

If the Wolves opt to give the two five-year extensions to the more marketable Towns and LaVine, Wiggins could become bothered which would only perpetuate the narrative (created by me) of him wanting an out.

To further the narrative, I am of the opinion that there is a real chance that Wiggins rookie deal comes to a close (after next season) and he is looking around at a franchise still not in the playoffs. Maybe continuing to play for a team filled with young prospects that could be good someday becomes less palatable to the then 23-year-old. If the money is only slightly better, there is at least some rational thought that suggests Wiggins looks out at the next ten to fifteen years of his career and sacrifices some security and bets on himself recouping that money down the road, a la Monroe.

Money has always talked in the NBA, but personalities do come into effect during the construction of a team. It is impossible to know what is in Wiggins’s mind, but we can know that the qualifying offer gives him a path to a different, and possibly, greener pasture if he so pleases. That, again, lies in the eye of the beholder.

The most likely scenario is that the Wolves come to an agreement to extend Wiggins this offseason, probably at a number slightly smaller in years and/or dollars than the five years and $148 million he could earn at a maximum. But waiting a year, and using the right of first refusal—letting Wiggins test the RFA market—is another possibility. Wiggins accepting the qualifying offer is a far less likely option, but it’s kind of fun if you buy into the painful narrative of Minnesota always screwing everything up.

There has never been a better time to have team control of players on rookie scale contracts, but patience can be a double-edged sword. If a team (like the Wolves) exclusively toils in mediocrity, those same players that once signaled the beginning of a youth movement could grow tired of the franchise that drafted them before the positives of that youth have come to fruition.