Over the last few days, the Sacramento Kings have found themselves embroiled in some minor drama due to the discussions surrounding Buddy Hield and his rookie-scale extension. After a relatively quiet summer, tensions began to rise when a frustrated Hield shared his thoughts with Jason Anderson of the Sacramento Bee and were again accelerated by Chris Haynes’ report detailing the $20 million disparity between the two sides. On Wednesday, Hield spent part of his day commenting and liking several posts referencing the negotiations, as well as sharing some pretty heated comments after Sacramento’s preseason win.
Buddy Hield still choosing to remain vocal about his desire for a contract extension tonight following the preseason finale. Said he'll still ball if a deal cannot be reached by Monday 10/21. pic.twitter.com/nabC1zutf5— Sean Cunningham (@SeanCunningham) October 17, 2019
With the deadline for Buddy’s extension looming next Monday, alarms have begun to sound in the Sacramento community, either in fear of Hield potentially leaving the team in the summer of 2020, or out of concern that the impact of a multi-year, near-max contract may have on the futures of De’Aaron Fox and Marvin Bagley. Both of those worries are unfounded when the conversation around Hield’s extension is backlit with the knowledge of Sacramento’s complete control of the situation, as well as their ability to maintain cap flexibility in the next few years.
The Fear of Free Agency
Although Buddy has now opened the conversation for finding a home elsewhere, that simply isn’t going to happen unless the Kings trade him. If the two sides don’t come to an agreement before the October 21st deadline, the front office will submit a qualifying offer to Hield’s camp at the start of free agency. That would allow the team to match any offer thrown his way, even if that put the team over the salary cap. The only way that Hield could avoid that scenario would be to sign the qualifying offer instead of an offer sheet with another organization. If that occurred, he would accept a one year salary of $6.4 million for the 2020-2021 season and would walk away as an unrestricted free agent the following summer. Two critical issues exist with that plan.
The first is the massive amount of cash that Buddy would be surrendering and would likely never recoup. There’s about a $21 million difference between the one-year salary he would take with the qualifying offer and the first year salary he’s requested from the Kings. For a player who’s only received rookie-scale pay to this point in his career, that’s a ridiculous amount of guaranteed money to walk away from. Hield’s age would also play a role in the decision, as he would be 28 before entering the open market, hoping for a long-term, high-paying deal. For a player who wants to be respected and paid accordingly, the qualifying offer isn’t a realistic pathway to a payday for Buddy Hield.
From Sacramento’s free agency perspective, the prospect of letting Hield walk to another team doesn’t make a whole lot of sense either. If the Kings were to decline to match an offer that was sent Buddy’s way in July of 2020, they would likely look to Bogdan Bogdanovic, another restricted free agent, to take his place in the starting lineup. For the sake of projection, let’s assume the Bogi contract is four years, $73 million, which equates to a starting salary of $17 million with 5% raises. Sacramento would still be operating above the cap even after Hield left, and waiving Trevor Ariza and Nemanja Bjelica would leave them with only $15.8 million, not nearly enough cash to effectively replace all three of those contributors. The team would be much worse talent-wise, with little flexibilty and no realistic paths toward major improvement; the worst case scenario for an up-and-coming organization.
The Fear of Future Flexibility
The second, more understandable concern is the impact that a massive deal would have on the future contracts of De’Aaron Fox, Marvin Bagley, and Bogdan Bogdanovic. Because all of those players are coming off three-year contracts, the Kings will hold the same matching rights in free agency that they do for Hield next summer. According to the Collective Bargaining Agreement, Sacramento can go as far above the salary cap as they desire to retain those players. From a legal perspective, there’s no danger of breaking up the core over cold, hard cash.
However, it’s also very easy to spend someone else’s money, Vivek Ranadive’s in this case. Assuming that Fox and Bagley are the players fans hope them to be, they’ll both be in line to receive the five year designated rookie extension. That’s a massive amount of cash being spent in back-to-back years. Going above the salary cap may not be an issue for the organization, but if the Kings aren’t a championship caliber team, there may be hesitancy from the ownership group to pay the luxury tax for a non-contender.
In order to forecast a multi-year cap sheet for the Sacramento’s front office, some assumptions will have to be made. The first is that Buddy Hield is signed to a four-year, $108.3 million deal. Why that number? That would grant him a maximum salary in the first year of his contract, but decrease at an annual rate of 5%, granting the Kings a bit more flexibility in the future. Meanwhile in the fantasy world of future perfection, Bogdan Bogdanovic signs the same four-year, $73 million as above. To keep things simple, the Kings would also be picking 14th overall in each draft, as the variation in one or two spots either way won’t make a significant impact on their situation.
In the 2020-2021 season, the Kings would likely waive Caleb Swanigan and Tyler Lydon, renounce all other free agents, and sign their first rounder. Initially, they would actually show as $4.7 million above the luxury tax line, but that number would include the partially guaranteed salary ($1.8 million) of Trevor Ariza and the non-guaranteed salary of Nemanja Bjelica. Sacramento could comfortably slide under the tax by waiving Ariza, giving Vlade Divac $7.3 million of breathing room, allowing him to bring in another contributor with the non-taxpayer mid-level exception. If the front office wanted even more space, they could waive Bjelica as well, granting themselves full use of the $9.9 million exception. Either way, they would be in no danger of paying the luxury tax.
The following season could present some interesting challenges for the Kings, as De’Aaron Fox will almost be certainly granted the estimated five-year, $181 million extension if the cap sticks at its projected $125 million. Outside of Fox, two unknowns exist for Sacramento: Harry Giles’ health and Justin James’ non-guaranteed contract. There’s no easy way to predict those futures, so the decision was made to waive James and to sign Giles to a three-year, $30 million extension.
Once again, those contracts seem to push the Kings far into the luxury tax, this time in the amount of $8.5 million, but the brilliance of Ken Catanella plays will play an important role in Sacramento’s cap navigation over the next few years. Cory Joseph and Dewayne Dedmon combine for over $25 million in non-guaranteed salaries, and either player can be waived to prevent a luxury tax charge. If only Dedmon is let go, Sacramento will only have about $4 million of the non-taxpayer exception to use, but they can open up the entire $9.8 million by waiving Joseph as well. Either way, they have enough flexibility on their books to avoid the tax and add additional players outside of the veteran minimum.
The final projected years, which gets murkier as we look further into the future, will see Marvin Bagley sign the same five-year deal that Fox agreed to. At that point, the combined salaries of Fox, Bagley, Hield, Bogdanovic, Barnes, and Giles will equal over $140 million, not exactly the spare change in your car’s glove box. Depending on the deals offered to free agents in the prior years, it’s entirely possible that Sacramento could edge into the luxury tax in the first year of Bagley’s extension. However, the entire core should be entering, in the middle of, or right at the end of their prime, meaning the Kings will either be competing for a championship or have failed and were probably broken up several seasons prior. If the team was contending, but ownership was fearful of the tax, Harrison Barnes’ $18.3 million expiring contract could probably be moved in a similar salary dump that found him a new home last February. Plenty of options would still exist for the front office to duck the luxury tax and still keep the core intact.
Three Year Cap Projection
|Player||2020-2021 Salary||2021-2022 Salary||2022-2023 Salary|
|Player||2020-2021 Salary||2021-2022 Salary||2022-2023 Salary|
|2021 First Rounder||$3,707,400||$3,892,800||$4,078,200|
|2021 Two-Year MLE||$7,300,000||$7,665,000|
|2022 First Rounder||$3,960,960||$4,158,960|
|2022 Two Year MLE||$10,603,000||$11,133,150|
|2023 First Rounder||$4,158,960|
|Luxury Tax Space||$80,250||$3,807,979||-$5,179,043|
*The table doesn’t list minimum roster charges, but those were included in the cap calculations as well.
I’m obvious making some guesses on future contracts, but even if I’m off the overall numbers and facts don’t lie. If the Kings want Buddy Hield to stick around for the next five years, they possess both the contractual control and the future cap flexibility to do so. And although it’s natural for tempers to flare and emotions to run high when two sides disagree on a player’s monetary value, those feelings carry no impact against Sacramento’s leverage during discussions. It’s in the best interest of all involved parties to get an extension completed before Monday’s deadline, but if that doesn’t occur, Buddy Hield is almost certainly guaranteed to be a key part of this Kings core for the next half-decade.