For the next three weeks, NBC Sports Boston will be looking at how the COVID-19 pandemic has impacted the economics of sports. First up: its potential impact on the Celtics offering Jayson Tatum a max contract.
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The COVID-19 pandemic has forced all NBA teams to re-evaluate how they plan to spend their money on players now and in the near future.
But there are some decisions that, well, fall into the category of “duh … of course we’re going to do that!”
Like whether the Boston Celtics are going to back up the Brinks truck and offer Jayson Tatum a max-salaried contract extension this offseason.
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The thought that Boston would even hesitate — let alone not put such a deal on the table — is comical in most circles.
That’s why Portland’s CJ McCollum (among others) got a good chuckle out of a report that the Celtics would “most likely” offer the 22-year-old Tatum a multi-year, max contract this summer.
Even at a time when the COVID-19 pandemic has forced all NBA teams to take a closer look at their financial books, Boston’s desire to lock up Tatum to a long-term deal has never changed.
That sustained commitment, fueled by him being one hell of a player, is why the Celtics are expected to make Tatum the highest-paid Celtics player ever.
“Locking him up to a max deal, that’s gotta be the easiest decision Danny (Ainge, Boston’s President of Basketball Operations) has had to make, like ever,” an Eastern Conference General Manager told NBC Sports Boston. “The talent, his age, the success he’s already had both for himself and for the team, the relationship he has with Jaylen (Brown) who we all know Danny loves … unless there’s some issue that none of us know about which I don’t think there is, there’s just no scenario I can think of that’ll keep them from putting a max offer on the table for Jayson.”
But what will that offer look like?
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That’s where things can get interesting, and why the importance of concluding the season has significant roster-building implications for the Celtics as well as future earnings power for Tatum.
While Tatum has been one of the best players in the league since the All-Star break, there’s no guarantee he will pick up where he left off prior to the league being suspended March 12.
And like the handful of players from his 2017 draft class in line for max or near-max contracts, Tatum has also taken the extra step of looking into additional league-sponsored insurance in case of an injury suffered upon the league’s ramped-up return with games reportedly scheduled to begin as early as July 30.
Taking added precautions makes a lot of sense for Tatum, whose extension wouldn’t kick in until the 2021-2022 season which has a projected salary cap of $125 million.
However, the COVID-19 pandemic, which forced the NBA to suspend play March 12 with the season expected to resume in late July or early August, has dealt a major blow to the league in terms of revenue generated.
And that affects the bottom line, including what teams can pay players and — just as notable — the salary cap.
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The salary cap for the 2020-21 season was projected to be $115 million (down from an earlier estimate of $116 million), but is expected to be closer to the 2019-2020 cap of $109.1 million mark.
For the 2021-2022 season, the first year of a Tatum extension, it’s too soon to know if the league will bounce back with a salary cap that’s close to the projected $125 million figure.
But even if the salary cap came in below $125 million, it would take a significant drop from that before Tatum would realistically consider not signing a max extension because of a lower-than-expected salary cap.
A five-year deal with a salary cap of $125 million would pay Tatum $181.25 million.
The first-year salary of such a deal would be $31.25 million, with an eight percent raise ($2.5 million) each of the remaining years.
If the salary cap that year were just $120 million, Tatum’s adjusted five-year deal would be worth $174 million with an annual raise of $2.4 million.
A drop? Yes.
But significant enough to pass up signing a long-term max deal? Unlikely.
However, a lowered salary cap would impact Boston’s financial flexibility when Tatum’s new deal kicked in.
Tatum’s base salary for the 2021-2022 season of $31.25 million along with the salaries of Jaylen Brown ($24.8 million) and Kemba Walker ($36.1 million), would account for nearly 75 percent of the team’s salary cap — and that’s with the cap being $125 million. That would put a heavy reliance on adding talent via the draft and free agency with limited resources.
Tatum’s camp will consider all options, but there have been no signs of them being interested in anything other than a long-term, max-salaried contract.
His next deal could be even better if he achieves certain end-of-the-season accomplishments such as being named to one of the All-NBA teams.
And the way he played following the All-Star break has made Tatum a legit candidate for postseason honors.
Prior to the break, Tatum averaged 22.4 points, 6.9 rebounds and 2.9 assists while shooting 44.3 percent from the field and 38.2 percent from 3-point range.
Pretty good, right?
But after the break, Tatum took his game to another stratosphere with a slew of out-of-this-world performances.
He averaged 29.9 points per game following the All-Star break, along with 7.9 rebounds and 3.1 assists while connecting on 47.2 percent of his shots from the field and a sweltering 46.8 percent of his 3’s.
An All-NBA selection would make him eligible for a five-year extension that would pay him up to 30 percent of the salary cap, better known as the Derrick Rose rule.
For players with Tatum’s number of years in the league who don’t meet the Derrick Rose rule criteria, teams are limited in paying them up to 25 percent of the salary cap.
To put in perspective how big a jump that would be, a “Derrick Rose rule” contract for Tatum would be a five-year deal worth $217.5 million. In the final year of the deal when he would be 27 years old and presumably at or near his peak as a player, it would pay him $49.5 million.
That’s a boat load of money by anyone’s standards for sure.
But when you look at where Tatum is talent-wise, the potential he has shown to improve and the role that he now serves with the team and will continue to grow into going forward, a max contract offer from Boston — no matter how the bottom line has been impacted by the COVID-19 pandemic — is a given.
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