Now that the expected has happened -- the Wizards and Bradley Beal did not reach an agreement on an extension to his rookie scale contract -- this is what it all means:
- After receiving a qualifying offer of $7.5 million from the Wizards next summer, which will be a formality, Beal becomes a restricted free agent. This happens the day after the last game of the NBA Finals up to June 30. This doesn't mean that Beal signs it. He won't. It simply gives the Wizards first right of refusal and they'll have 72 hours to match any offer sheet he brings to them from another team. If they declined to extend a qualifier and renounced his rights (this won't happen but in theory it could), he'd then become unrestricted July 1.
- Let's say Beal and the Wizards can't come to terms on a multi-year extension next summer. Beal could opt to sign the one-year qualifier, a similar deal that Kevin Seraphin accepted in the summer of 2014. But these are two different players in two vastly different situations. Seraphin was hoping to improve his market value which was low going into the 2014-15 season and he was hoping to build it up for the summer of 2015 (and that strategy failed). Beal's value is sky high so taking such a risk would be nothing short of brain dead. Beal and his agent, Mark Bartelstein, are too smart for that. Now gambling on himself to have an injury-free and productive 2015-16 season, Beal would be playing on a one-year deal for 2016-17 at about $10 million below market value. That's a steep risk to take just to become unrestricted in the summer of 2017. When a player is willing to go to those lengths to extricate himself -- think Greg Monroe with the Detroit Pistons -- he's miserable and just wants out. Beal doesn't want to go anywhere. And the Wizards aren't breaking up one of the NBA's best backcourts with John Wall.
- The Wizards own what's called Beal's Bird rights. Once a player is vested for three years with a team it can exceed the salary cap to re-sign him, a mechanism in the Collective Bargaining Agreement that helps teams retain their own free agents. In 2011, when an agreement on a new deal was reached during the lockout with the players union, teams with Bird rights were given more leverage. This came after LeBron James and Chris Bosh left their teams high and dry by bolting for the Miami Heat without them getting fair compensation in return and making rebuilding difficult and parity impossible. The team that owns the Bird rights can offer one extra year and 7.5% raises each year. If Beal were to play 2016-17 on a qualifying offer and leave as an unrestricted free agent the following summer, the maximum he could get is a three-year deal with 4.5% raises each year because his new team wouldn't have Bird rights. It's a punitive measure implemented to balance the scales for teams that have a better chance at retention. If you want to leave the team with your Bird rights, fine, but you're going to take a significant pay cut to do so. The caveat: Beal could become disgruntled or want to leave and force a sign-and-trade. That way, his Bird rights would transfer to his new team and he doesn't sacrifice any money or length of his contract. The Wizards, in such a scenario, would be able to get closer to fair market value in return. When Trevor Ariza left two years ago for the Houston Rockets in free agency, it was orchestrated as a sign-and-trade which allowed the Wizards gain a trade exception used to bring in Kris Humphries. Ariza retained his Bird rights.
- Next summer is about more than Kevin Durant, who will be an unrestricted free agent. The Wizards have to decide whether or not to pick up final-year options on Kris Humphries, DeJuan Blair and Drew Gooden. Jared Dudley, Gary Neal, Alan Anderson, Nene, Ramon Sessions and Garrett Temple come off the books and will be unrestricted. Martell Webster is in the final fully guaranteed year of his deal, with fourth-year buyout just over $2 million in 2016. There's a lot of movement that will take place. By signing Beal to a max extension now, they'd have less money to fill the holes in the roster. The Wizards are better off waiting -- as David Aldridge of NBA.com explains in more detail here using a great example with how the San Antonio Spurs handled Kawhi Leonard's extension -- to re-sign Beal as an exception to the cap because they can exceed it to do so. Currently, the Wizards are over the $70 million salary cap but under the $84 million luxury tax line for 2015-16. It's a complicated mathematical formula that requires creative accounting but doing it this way will maximize the Wizards' buying power in the open market next summer without negatively impacting Beal's own bottom line.