A case can be made that Keita Bates-Diop (KBD) was the steal of the 2018 NBA Draft at pick 48. But since second round picks do not have rookie scales, teams need to use the same mechanisms to sign them as regular free agents.
This leads us to an important question: If Wolves’ brass believe they found a gem in KBD, what kind of contract should they aim to sign him to?
Before diving head first into this question, understanding how first and second round picks are different from a contractual standpoint is vital. Each selection in the first round (1-30) has a slotted value and immediately makes that player eligible for scale contracts as determined by draft position.
For instance, the 2018-19 NBA Rookie Scale shows the first year salary of the #1 pick is $6,804,300. The 20th pick is $1,800,600. (Keep in mind the rookie scale is affected by the salary cap and since the cap increased by 2.8014% the scale will also be a tad higher than these figures.)
All first round rookie contracts are guaranteed for two seasons with an additional team option in years three and four. First round picks can sign for as much as 120% and as little as 80% of the rookie scale, though it appears most guys get the full 120%. (It’s probably wise to start the relationship off by not nickel-and-diming your prized new prospect.)
For the Wolves, this means there was little negotiation with 20th pick Josh Okogie. He was slotted into a rookie scale deal and most likely signed for the standard 120% of the scale amount. This is his contract structure, according to Early Bird Rights:
Year 1: $2,160,840
Year 2: $2,530,680
Year 3: $2,651,040 (Team Option)
Year 4: $4,087,904 (Team Option)
Now that we have briefly covered how first round picks are signed, let’s return to the question at hand. What are the Wolves’ options in signing Keita Bates-Diop and what should his contract ultimately look like?
Option 1: Use the Minimum Player Exception
If a front office strongly believes they have found a second round sleeper who they want to keep in the fold and develop for years to come, this is probably not the best option.
This contract can be no more than two years in length. Players earn a minimum salary based on years of service. For a rookie during the upcoming 2018-19 season, the minimums are:
Year 1: $838,464
Year 2: $1,416,852
The first year can be nonguaranteed while the second year can be a team option, player option, or nonguarenteed. This is obviously the most critical part of the contract negotiation since they are only getting the minimum dollar figure.
Some relevant examples from the 2017 draft include Jordan Bell (pick #35) and Thomas Bryant (pick #42). Bell received both years fully guaranteed while Bryant’s second year is non-guaranteed.
Bell is a prime example of why teams may not want to take the minimum contract route if they have the option and salary cap situation to avoid it. He will be a restricted free agent next summer with a qaulifying offer of $1,818,520. Given his age, 23, upside, and excellent rookie year production with the Warriors, he is most likely in line for a large salary increase next summer. While Bell’s motivations are unclear — maybe collecting rings with Golden State outweighs the other factors — a significant raise and increased role likely will be available to him on another team.
In other words, as a young RFA looking to cash-in earlier than most of his rookie counterparts from this past season, the threat of Bell leaving The Bay after two seasons is very real. Of course, it should be noted that the “Gilbert Arenas” provision makes a player in his situation a bit harder to obtain; teams are limited in the salary they can offer in an offer sheet to a restricted free agent with one or two years in the league.
While it’s most common for a second round pick to receive the minimum salary and ultimately be signed using the Minimum Player Salary Exception, it’s not uncommon for front offices to go another route.
Which leads us to...
Option 2: Use the Mid-Level Exception (MLE)
Team’s may want to use a portion of their Mid-Level Exception in order to sign the player for three or four seasons. This gives them full Bird rights at the end of the contract. Thus, if the Wolves believe KBD is going to end up being a rotation level player, or even better if everything goes smashingly, this is the best option for the franchise. It also gives the rookie additional security. These contracts can be up to four years in length and teams can offer more than the minimum salary using this exception.
This option includes salary increases up to 5% each season (unless a 5% increase would yield an amount less than the minimum salary allowed for that year.) The minimum salary for rookies signed in 2018 (see RealGM 2018-19 minimum scale) would look like this:
Year 1: $838,464
Year 2: $1,416,852
Year 3: $1,663,861
Year 4: $1,802,057
The last season can be a team or player option and all seasons can be non-guaranteed.
Ironically enough, the 48th pick in last year’s draft, Sindarius Thornwell of the Clippers, presents a strong example of what a potential KBD contract might end up looking like (these are the 2017 minimums ... you will notice the slight dip from the 2018 numbers above).
Year 1: $815,615 (Minimum — Guaranteed)
Year 2: $1,378,242 (Minimum — Guaranteed)
Year 3: $1,618,520 (Minimum — Team Option)
Semi Ojeyele of the Celtics (pick #37 in 2017) presents another fine example:
Year 1: $1,291,892 (Guaranteed)
Year 2: $1,378,242 (Minimum — $900,000 Guaranteed)
Year 3: $1,618,520 (Minimum — Nonguaranteed)
Year 4: $1,752,950 (Minimum — Team Option)
Since the MLE can be spread out through multiple players, the Wolves can use the remaining MLE they have to ink KBD to a contract that exceeds two years, as discussed in the last section. How much do they have left?
Anthony Tolliver signed his 1-year, $5.75 million Mid-Level deal earlier this week. Since the Non-Taxpayer MLE is $8.641 million, the front office is left with $2.891 million to work with. That could be enough to sign both KBD to a multi-year deal exceeding two seasons, plus another young player that stands out at Summer League to the Sam Hinkie Special starting at $838,464 in year 1.
Tom Thibodeau and Scott Layden could then look to sign another veteran wing still lingering on the market using the minimum player exception. The expectation, of course, is that Thibodeau will once again leave one of his 15 roster spots open entering the season to potentially use at a later date.
Note: According to Spotrac, the Wolves are currently $2,837,083 million below the 2018 NBA Luxury Tax Threshold, though that number is based on Cole Aldrich’s $2,056,021 dead cap figure (after they waived him). Various sources have suggested that the plan is to stretch that cap hit over the next three years, which would push the Wolves to around $3.5 million under the luxury tax and provide a little more wiggle room.
Option 3: Bi-Annual Exception
This option could technically be used, but since it is also limited to two years, and can’t be used in back-to-back seasons, there isn’t much advantage to going this route. Still, it should be noted as an option! The BAE is good for up to $3,382,000.
In summary: If Thibodeau and Layden want to sign KBD to more than two years, but want to use as little of the MLE as possible, it’s a pretty straightforward 3 or 4 year deal at minimum salary with the point of negotiation being how much money is guaranteed and whether or not there are player or team options involved.
A contract that looks similar to the deal Semi Ojeyele signed with the Boston Celtics last season, but with the minimum rookie salary in year one, to keep the Wolves further away from the luxury tax, would seem to be the wisest path to take. That’s my personal recommendation. That would mean a $838,464 cap hit for KBD in 2018-19 with more money back loaded in years 3 and 4 of his contract.
Special thanks to CH Salary Cap Guru, Suspicious Sal. He helped me a great deal with this post by sending me extensive rookie contract notes and details. 10,000 Canis Hoopus points will be wire transferred to his account later today! Use them wisely, Sal.