Breaking Down Jaylen Brown’s Extension

Keith Smith
Keith Smith, Resident NBA ExpertJuly 31, 2023
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#nba #jaylen brown #jaylen brown #boston celtics
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It’s often said that timing is everything in life. That’s true for Jaylen Brown, the Boston Celtics and your intrepid author here.

It took about three weeks or so longer than expected, but Brown reached an agreement on a Designated Veteran Extension with the Celtics. As luck would have it, Brown’s deal was agreed to as I was out to sea on our long-awaited family vacation. Without the benefit of the internet (or perhaps without the detriment of the internet!), I learned about the deal kind of old school. I turned on SportsCenter one morning and that was the lead story.

Now, a week or later, we have all the details on Brown’s extension, and I have thoughts. These are going to be a bit scattered. These are the things that came to mind about Brown, the Celtics, the process and some thoughts on the impact of the deal on the NBA as a whole.

The Contract 

Jaylen Brown signed under the Designated Veteran Player Extension rules that have existed over the last couple of CBAs. Nothing Brown signed for is new or unprecedented, despite some of the sensationalized reporting around the deal. I’ll have more thoughts on that later.

Brown’s new contract is for five years and will start at 35% of the salary cap in the 2024-25 season. There are no options in the deal. His contract includes a trade bonus for the lesser of 7% of his salary or $7 million.

Unlike Brown’s current deal, there are no incentives in this contract. Brown will make the full 35% of the cap in 2024-25, with the maximum 8% raises in the following seasons. Brown’s current contract with Boston is ladened with several different incentives related to individual and team success. This one is for the maximum that Brown could get, without any bonuses involved.

The deal has been reported as being for $304 million over five years. For that to be the total number, Brown would need to start at about $52.4 million in first-year salary. That assumes the salary cap will again jump by the maximum possible 10%. However, it’s not quite that simple.

The NBA’s current projection for the 2024-25 salary cap is $142 million. That’s a modest 4.4% bump. The reason for this lower-than-expected projection is that there is considerable uncertainty within the Bally Regional Sports Network system that carries the games for about half of the NBA’s teams. The NBA is baking in some potential losses due to the bankruptcy of the Bally RSN’s parent company Diamond Sports.

Now, the cap may very well end up jumping by 10%, but that’s not what the NBA is currently projecting. Therefore, we are basing Jaylen Brown’s extension off the actual projection of a cap of $142 million.

That makes the projection for Brown’s Designated Veteran Extension as five years, $288,260,000, with a first-year salary of $49,700,000.

The Reporting

Related to the above, the reporting around Brown’s extension got a little sideways. And it’s caused some madness across the world of sports. This is true on the team, player, analyst and fan sides.

As we know by now, the terms reported in most new contracts or extensions are often in the most favorable possible light for the player and the agent. As details of these new contracts become known, the overall money is often less than the original report. This happens for a lot of different reasons. The most common, and least egregious, is simple rounding. If a deal is for $29.4 million, it will often get rounded off to $30 million.

Sometimes, the reports include all possible money the player can earn. So, let’s say a deal is for $45 million, but there are $5 million in incentives, it will regularly be reported as a $50 million deal.

In the NBA, contracts regularly include an option on the final season. Sometimes, NBA deals include partial or non-guaranteed season. So, while a report may be that a deal is for $100 million over four years, there may be a team option on the final season. Or the final two years may be only partially guaranteed.

One great example of this is Chris Paul’s current deal. It was reported as a four-year, $120 million contract. But Paul’s deal only originally had $75 million in guaranteed salary.

Getting back to Jaylen Brown’s new deal…

The reporting was at best inaccurate and at worst irresponsible. Yes, Brown’s extension could be for a maximum of $304 million, but that isn’t in line with the current projection. Sure, $288 million is basically the same, especially considering the relative Monopoly type of money we’re talking about here. But it was that mystical $300 million barrier that has issues.

Time and time again, it was reported that Brown signed the first $300-million deal in the NBA, and one of the few deals in the big four US sports (Mike Trout, Mookie Betts, Aaron Judge in MLB and Patrick Mahomes in the NFL) to have crossed the $300-million barrier. The first-year salary of $52.4 million would be the largest first-year salary in the NBA, NFL, MLB or NHL by a decent margin.

And it was those figures that have been endlessly spouted off about by talking heads across sports media. In addition, it’s those figures that fans, and some players, have attached to.

Now, are $288 million and $49.7 million really all that different? Not really. But they aren’t $300 million and $50 million. We gravitate toward large, round numbers. They are easy to remember and discuss.

Lastly: Who is to blame here? No one, really. This is really just another data point in the whole “Be careful of the initial numbers!” warning that we so often issue at this time of year. In this case, because it’s the first deal to approach (and possibly even cross!) both the $300 million and $50 million marks, it got an outsized amount of attention.

The Timing

This isn’t about Jaylen Brown and the Boston Celtics taking three weeks to get to this deal, even if that was a bit odd. There’s only so much that can be negotiated in these types of deals, and Brown and Brown seem to have haggled over some stuff that took about three weeks to sort out.

This is about the timing of Brown inking the richest contract in NBA history. And that’s really all it was: timing.

Jaylen Brown is a wonderfully talented player and he’s earned every penny of his new contract. He made All-NBA last season and he’s an established All-Star level guy. He’s a top-20 to top-25 player in the NBA.

But he’s not a top-5 to top-10 player in the league. And therein lies the rub. Should a non-top-10 player be getting the largest contract in league history?

Doesn’t matter.

It’s all about timing, with a smidgen of circumstance.

Jaylen Brown qualified for the Designated Veteran Extension. The NBA has never been in better shape financially. Boston couldn’t afford to lose Brown.

Add it all up, and Brown gets the richest contract in NBA history because he was eligible for it right now.

That’s really all it is. Next summer, or later this summer/fall in an extension, someone like Anthony Davis or Kawhi Leonard is going to get a massive deal, and possibly one that’s even bigger than Brown’s. And then the next season, their deal will get knocked off by whatever Giannis Antetokounmpo and Jayson Tatum sign for. And then, and then, and then.

There was far too much focus on “Jaylen Brown shouldn’t be getting the biggest deal in NBA history!” with far too little focus on “This is just how NBA contracts work timing-wise.”

The Contract Part 2

This is a quick one, but an important one.

Brown is signing for 35% of the 2024-25 salary cap. That currently projects to $49.7 million. From there, Brown will get 8% raises.

There seems to be somewhat of a perception that Brown will get 35% of the cap every season. Not only is that not the case, but cap growth is projected to go up the maximum of 10% over the life of Brown’s deal. That means the cap will outpace Brown’s raises. In fact, after the 35% of the cap in the first year, Brown’s contract over Years 2-4 projects to be 34.4%, 33.6%, 32.6% and 31.6% of the cap.

The Impact on the Celtics

Brown’s now locked in under contract for the next five years. It’s the NBA, so we all know that is Brown or Boston decide in a year or two that things aren’t going as they want, a trade or trade request will come. At that point, both sides will go their separate ways. But for now, they are connected for more than a half-decade.

This is a good point to pause and remind everyone that Brown and Boston are linked for at least a year. When a player signs a Designated Veteran Extension as Brown did, that comes with a one-year trade restriction. Given how late in July Brown signed his extension, that means he can’t be traded until July 26, 2024. That’ll be long after most of free agency is complete, so Brown and Boston are probably together for the next two season, at least.

We’re going to assume that the Celtics will also ink Jayson Tatum to a Designated Veteran Extension too. And Boston already extended Kristaps Porzingis.

This season and next, the Celtics will be dancing around the second tax apron, and deep into the tax itself.

At the start of the 2025-26 season, Boston is likely to have at least $154.5 million on the books for Brown, Tatum, Porzingis, Robert Williams and Jordan Walsh. That’s almost at what projects to be a salary cap of $156 million for that season. For five players. And that’s before factoring in any kind of extensions or new contract for players like Derrick White, Malcolm Brogdon or anyone else acquire in the next two years.

Essentially, Boston is capped out for the foreseeable future, and likely to be above the tax too. The Celtics core is good. Tatum, Brown, Porzingis, White and Williams are good enough to win a title, if they have enough help.

It’s on Brad Stevens and the front office to find that help. And they’re going to have to win on the margins for the next several years. Veteran Minimum players are going to have to hit. Draft Picks are going to be crucial. And doing well in any future trades is imperative. The ability to add to this roster outside of those means are going to be mostly non-existent.

The Impact on the rest of the NBA

This one is also going to be quick.

There really isn’t one. Unless things go really, really poorly for Boston and Brown.

Extensions and trades are how most big business is getting done in the NBA these days. Free agency delivers a few big moves here and there, but for the most part, players are taking money early via extensions. And then trades are how teams make their major additions and subtractions.

As we covered previously, Brown signed the largest deal in the NBA…for now. That’ll quickly get replaced with a new largest deal in the NBA.

Where this could impact teams and players is if Brown doesn’t come even close to living up to the deal. Let’s say he’s simply good for the life of this contract, but not an All-Star and never again All-NBA. That would be a huge loss for Boston. He’s being paid as an All-Star, at the minimum, and as an All-NBA guy, at the top-end.

If Brown doesn’t live up to the deal, the next team in this spot could pause and not be so willing to commit. You’re putting yourself in tax and second apron hell for years by having two players combining for roughly 2/3 of the cap. And building a contender that way is a tricky line to walk.

The reality is, few teams will be in this spot. Not many are sitting on two All-NBA level guys heading into their peak years. And when you have an All-NBA level guy, you pay him.

The NUMBERS 

We’re capitalizing NUMBERS here, because whether you use $300 million and $52.4 million or $288 million and $49.7 million, those are massive salaries. We all get that.

But that lacks context.

On each of our NBA salary pages on Spotrac, we added “% of cap” to the salary numbers. NBA max deals use caps of 25%, 30% or 35% in first-year salary, pending years or service, or qualifying for Designated Player status.

From there, as covered in The Contract Part 2 above, the cap projects to outpace the raises a player can get. It’s important to understand that percentage of the cap is how we’re thinking about NBA deals now, vs just focusing on the number.

We’re not that far off from the NBA salary cap reaching above $200 million in a single season. At the current projected growth, we’ll get there by the 2028-29 season. When we do, the maximum salary for a player with 10-plus years or service or for a Designated Veteran Player will be $72.7 million.

$72.7 million in first-year salary and $422 million over a five-year max deal. The final salary in that contract? $96 million. Nearly $100 million for a single season. Whew boy!

But you know what? That $72.7 million is 35% of the cap in 2028-29. Same as Jaylen Brown getting $49.7 million in 2024-25. Same as it was when Russell Westbrook signed his Designated Veteran Extension with the Oklahoma City Thunder for $35.6 million of the $101,869,000 cap in 2018.

Stop focusing on the NUMBERS. They’re already big and only getting bigger by the year. Reframe your thinking to percentage of the cap and everything starts to look a lot more in context.

 


#nba #jaylen brown #jaylen brown #boston celtics
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