Luka Doncic's Next Contract Options

Keith Smith
Keith Smith, Resident NBA ExpertJune 09, 2021
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Luka Doncic just finished his third NBA season and his second appearance in the NBA playoffs. After bowing out in six games against the LA Clippers in 2020, Doncic’s Dallas Mavericks fell to the Clippers in seven games in 2021. It’s hard to pin it on the third-year star however. In his 13 career playoff games, Doncic has averaged 33.5 points per game on 49.4% shooting from the field and 39.2% from behind the arc. For good measure, Doncic has also averaged 8.8 rebounds and 9.5 assists per playoff game.

Naturally, the next question about the 22-year-old Doncic is: What are his options are to leave Dallas for greener pastures?

Wait…what?

Such is life in the NBA. If players don’t produce right away, they’re busts. If they don’t make the playoffs by year two or year three, they’re "good stats, bad teams" guys. If they make the playoffs, but don’t produce they’re “82-game players vs 16-game players”. If they make the playoffs, produce but don’t win, it’s time to think about where they’ll play next. Fair or unfair, that’s sort of how this works.

There’s usually a caveat though. Most times, players make it to their second contract before the conversation about leaving town starts. But most players aren’t already as big of a star as Luka Doncic has become just three years into his career.

Recently, on his eponymous podcast, The Ringer’s Bill Simmons asked a version of “What if Luka Doncic turns down an extension from the Mavericks and takes the Qualifying Offer? What would the numbers look like for something like that?”

Here at Spotrac, we’re going to lay those numbers out for you, while also going over the pros and cons of each decision Doncic could make.

Let’s start with the fact that Doncic is under contract with Dallas for the 2021-22 season for the fourth year of his Rookie Scale deal. Anything we talk about from here on out will start with the 2022-23 season, when Doncic is eligible for a new deal.

Luka Doncic's Current Contract with the Mavericks

Luka Doncic's Next Contract Options

  • Option 1 - Sign a standard Rookie Scale extension for the 25% of the cap max
  • Option 2 - Sign a Designated Rookie extension for the 30% of the cap max
  • Option 3 - Sign an offer sheet with another team as a restricted free agent
  • Option 4 - Sign the Qualifying Offer with Dallas and become an unrestricted free agent in 2023

There is a fifth option where Dallas doesn’t extend Doncic a Qualifying Offer and he’s an unrestricted free agent in 2022, but that’s such a ludicrous scenario, it’s not even worth considering.

(Note: All figures based on a projected salary cap for 2022-23 of $115,786,000)

 

Option 1: Standard Rookie Extension (25%)

This one is probably out of the mix, because Doncic will very likely qualify for the Designated Rookie extension. It’s highly unlikely he’d turn that down to take less money. But for posterities’ sake, here’s what a standard Rookie Scale max extension would look like for Doncic:

2022-23 $28,946,500
2023-24 $31,262,220
2024-25 $33,577,940
2025-26 $35,893,660
2026-27 $38,209,380
5 years, $167,889,700

Now, for Doncic to take this extension, he’d have to either:
A. Want to give the Mavs a discount
B. Not qualify for the Designated Rookie extension.

Given that Doncic is a virtual lock to make his second straight All-NBA team, he’ll qualify for the Designated Rookie extension. That leaves Doncic manually electing to give the Mavericks a discount, and, let’s just say, that isn’t happening.

 

Option 2: Designated Rookie Extension (30%)

Option 2 is the most likely outcome, given that Doncic himself recently said with a smile “I think you know the answer,” when asked about signing the Designated Rookie extension. Here’s what that extension would look like

2022-23 $34,735,800
2023-24 $37,514,664
2024-25 $40,293,528
2025-26 $43,072,392
2026-27 $45,851,256
5 years, $201,467,640

It’s highly likely, given his stature, that this extension would include both the maximum of a 15% trade bonus and a player option for Year 5. This would match the extension structure that Jayson Tatum, a player of similar caliber to Doncic, signed with the Boston Celtics. To date, no player who has qualified for a Designated Rookie extension has failed to sign one.

 

Option 3: Sign an Offer Sheet

Option 3 falls behind Option 1 on the likeliness scale. Again, Doncic has made it clear his intention is to re-sign with Dallas. But, for posterities’ sake once again (and in the unlikely case where things go south in the next couple of months), let’s look at what Doncic could do as a restricted free agent.

Players only qualify for a fifth year and 8% raises with their incumbent team. If they sign elsewhere, even via an offer sheet, they are limited to four years and 5% raises. And, because he wouldn’t be signing under the Designated Rookie caveat, Doncic would be limited to a first-year salary of 25% of the cap. Here’s what that contract would look like:

2022-23 $28,946,500
2023-24 $30,393,825
2024-25 $31,841,150
2025-26 $33,288,475
4 years, $124,469,950

As you can see, simple economics tells you why this is so unlikely. Doncic would be sacrificing anywhere from $43 million to $77 million in total salary. That’s not happening. You also have to factor in that Dallas would almost assuredly match any offer sheet Doncic would sign. Or, in the case that the Mavericks were amenable to a sign-and-trade, this is the max money Doncic could get.

Simply put, Doncic will likely sign for the maximum amount, likely the Designated Rookie extension. Then, while on that 5-year, $201 million deal, he’d force a trade a couple of years in if he was that unhappy in Dallas.

 

Option 4: Play Out the Rookie Contract

Now, what Bill Simmons proposed is that Doncic simply forgoes an extension and bypasses the restricted free agency process entirely. This would mean Doncic would sign the Qualifying Offer of $13,348,801 for the 2022-23 season, play out the season and enter unrestricted free agency in the summer of 2023.

To date, no player has willingly signed the Qualifying Offer and turned down anything even approaching a max extension. On occasion, a lesser-rated player has played out the year on the Qualifying Offer, but never after turning down multiple years of big, guaranteed money. Examples of this are Greg Monroe and Rodney Hood, who both signed the Qualifying Offer, and played out the year, before becoming unrestricted free agents.

It’s fair to note that as Rookie Scale contracts have grown in conjunction with a rising cap, that Qualifying Offers have also grown. Gone are the days of high picks having relatively low Qualifying Offers. However, as noted above, even with the lowest starting max salary, Doncic would sacrifice over $15.5 million in 2022-23. And that’s before any of the guaranteed money for the three-to-four years following.

So, why would a player consider this approach? One, it gives them full control after one year. They’d still be largely limited to deals that max out at four years and 25% of the cap, but the choice of destination would be their own. Here’s how taking the approach of signing the Qualifying Offer and then a new four-year deal would work out for Doncic:

2022-23 $13,348,801 (Qualifying Offer)
2023-24 $30,393,750 (Year 1 with a new team)
2024-25 $31,913,438
2025-26 $33,433,126
2026-27 $34,952,814
5 years, $144,041,929

So, assuming Doncic wants out of Dallas and doesn’t want to deal with the hassle of a trade and is ok giving up some money, he’d sacrifice over $57 million in guaranteed money. That’s not going to happen.

However…it opens an interesting case. The route of taking the Qualifying Offer and then signing a new max deal as unrestricted free agent a year later isn’t worth passing up the Designated Rookie extension. As we stated above, a player would just force a trade a year or two into the extension.

But, if a player didn’t qualify for the Designated Rookie extension, the difference between the Qualifying Offer plus new deal vs standard max extension is “only” $23.8 million. Is that enough to have control over the team you want to play for?

 

Bonus Option: Multiple Mini Extensions

Another option, one that hasn’t come up anywhere, would be to sign the Qualifying Offer, then sign a two-year or two-plus-one deal with your team for the max. That would then put the player in the mix to be a free agent after Year 7, when they qualify for the mid-tier, 7-9 years of experience maximum. Here’s what that type of deal could look like:

2022-23 $13,348,801 (Qualifying Offer)
2023-24 $30,393,750 (Year 1 of second deal)
2024-25 $31,913,438 (Year 2 of second deal)
2025-26 $40,211,100 (Year 1 of third deal)
2026-27 $42,221,655 (Year 2 of third deal)
5 years, $158,088,744

This still falls well short of the Designated Rookie extension amount. It’s even still $8 million short of the standard max extension amount. But the player would have full control over their destination not once, but twice in a relative short period.

It’s probably easy to see why no option beyond signing the Designated Rookie extension works for Luka Doncic. It’s should also be clear that signing the Qualifying Offer creates a host of potential complications and involves a heavy amount of betting on one’s self to stay worthy of a max contract.

For a player to take the Qualifying Offer route, he’d have to be miserable with the team that drafted him. So much so that he wouldn’t even want to go the route of forcing a trade while on an extension. Or, he’d have to be a player who isn’t quite a max player. Think of someone like John Collins. He’d be giving up a good deal of money to take either of the Qualifying Offer routes present above. But a player like Collins could eventually make that up, if he performs to the level he believes he’s at as a max player.

You also have to factor in endorsement money and if the player is moving from a small market to a big market. That can make up some of the money given up in salary. In that case, freedom of movement may be worth it.

Eventually a non-max extension player is going to bet on himself by going the Qualifying Offer route. It’s just not going to be Luka Doncic, or anyone up for a max extension.


#luka doncic #luka doncic #designated player extension
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