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Offseason Preview Series: Jayson Tatum’s contract extension

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Boston will sign Tatum to a max contract extension before 2020-21 tips off

2019 USA Basketball Men’s National Team Training Camp - Los Angeles Photo by Andrew D. Bernstein/NBAE via Getty Images

One of the priorities for the Boston Celtics before next season starts will be inking Jayson Tatum to a long-term contract extension. While this won’t be one of the first things to happen, due to the benefit of time, it’s the single most important item on Danny Ainge’s offseason checklist.

Back in early-March, after Tatum took the leap from burgeoning star to full-fledged star, we covered extension possibilities for Tatum and the Celtics. We won’t rehash that entire article, but there have been some important updates since it was written:

· The salary cap for 2020-21 and 2021-22 (when Tatum’s extension would actually start) remain in flux due to the COVID-19 impact on the NBA.

· Tatum became the youngest player in Celtics franchise history to be named to the All-NBA team, when he garnered Third Team honors.

The first is something that happens during the lifecycle of every rookie scale extension. This time around though, it’s happening on a wider ranging scale.

As we covered previously (you really should go read the above link first), Tatum is getting a max extension. How that extension will work is that he’ll sign for a straight max extension at 25% of the salary cap in starting salary (less likely) or he’ll sign using the “Rose Rule” which could allow him to earn up to 30% of the salary cap in the first year of his extension (more likely).

It’s also possible that Boston and Tatum agree to language that says something like:

· 25% of the cap as a base

· 27.5% if named to All-NBA Third Team

· 30% if named to All-NBA First or Second Team or MVP or Defensive Player of the Year

These escalators up to 30% have become increasingly common in recent years. Both Ben Simmons and Pascal Siakam signed this type of extension last offseason.

Back to the uncertainty of the salary cap…Where the cap lands for 2020-21 has no impact on Tatum. He’s locked in at $9.9 million for next season no matter what. It’s the uncertainty of 2021-22 that impacts Tatum.

The last estimate the NBA provided for 2020-21 was a cap of $115 million and then a cap of $125 million for 2021-22. That’s no longer expected to be the case. Most teams are planning for the cap to remain flat at roughly $109 million for 2020-21 and for 2021-22 to raise to $115 million.

How does this impact Tatum? Let’s start by being optimistic and saying Tatum does whatever is necessary to earn the full 30%. If the cap had come in at the original $125 million, Tatum would have earned $37.5 million in first year salary. If it comes in at $115 million, Tatum will get $32.7 million. That’s a difference of about $4.8 million for 2021-22. Over the life the deal, the difference would be $27.6 million.

If Tatum and the Celtics agree to language that steps up the contract by accomplishment, it would be impacted similarly, but at a commensurate lower starting salary for 2021-22.

How does this impact Boston? It helps keep a looming tax bill in 2021-22 down a little bit. Depending on what happens with Gordon Hayward long-term, Boston could potentially even avoid the tax entirely. There’s still a lot to go into answering that question over the next two years.

Overall, we already laid out the complicated parts of how Tatum’s extension works in the previous article. Barring something really unexpected in negotiations between the NBA and NBPA as to how the next couple of seasons will work, nothing will change for Tatum on that front. It’s all about where the cap comes in now, and if Tatum qualifies for the “Rose Rule” or not. He’d have to make All-NBA again at a minimum, or win MVP or Defensive Player of the Year for that to happen.

To clear up another related question: yes, Jayson Tatum could decline to sign an extension. That’s extremely unlikely. Players on rookie scale deals rarely refuse to sign a max contract extension. Unfortunately, the NBA mindset is that you take the money when offered early in your career. Then, if things don’t work out, you force a trade. It’s a tale as old as time.

The other issue is that Tatum would be a restricted free agent in 2021-22. There is no offer a team could craft that Boston wouldn’t match, especially since they’d already happily pay Tatum more by re-signing him themselves. And no, Tatum wouldn’t sign his qualifying offer as a restricted free agent in 2021-22 and play it out. There is far too much risk there for minimal upside. He’d request a trade long before that.

The follow-up question becomes: Can Boston save any cap space by waiting? They could, but it’s not enough to be meaningful for where the Celtics cap position will be. Barring a slew of moves that see long-term money moved off the books and Gordon Hayward leaving, Boston won’t be a cap space team for several years. There isn’t a realistic benefit to waiting on an extension for Tatum. In reality, if you make Tatum wait, all you risk doing is angering him and his agent and making things harder on yourself in the future.

Jayson Tatum is both the present and the future of the Boston Celtics. Getting him signed to a max extension is both the least complicated, yet most important part of the offseason. It’ll get done, just expect it to happen shortly before the 2020-21 season tips off.