The NBA has promised to crack down on tampering and salary cap circumvention, rolling out new rules and talking a big game about ramped-up enforcement. So far the league has done really noble work, punishing the Milwaukee Bucks for noting that their own player, Giannis Antetokounmpo, will be offered a lot of money next summer. Maybe there are some heads worthier of sticking on a pike. Tom Ziller at SB Nation made a convincing case that the Orlando Magic should be investigated for trying to circumvent the salary cap.
The Magic drafted Auburn’s Chuma Okeke with the No. 16 overall pick of the 2019 draft. Okeke suffered an ACL injury during this year’s NCAA tournament and was guaranteed to miss a good chunk of the coming NBA season. Obviously, this is not a novel situation for a first-round pick. To take a recent example, Harry Giles, picked No. 20 in 2017 by the Sacramento Kings, sat out the whole 2017-18 season, but he still earned the first year of an NBA rookie deal while doing so, a cool $1.9 million in his case. Sixers stars Joel Embiid and Ben Simmons also earned NBA yearly salaries as they rehabbed.
Okeke will not enjoy that privilege. Instead of signing their draft selection to an NBA rookie-scale contract, as a team ordinarily would, the Magic chose to “redshirt” Okeke, which in practice meant offering him a D-League contract for the 2019-20 season, and the promise of a rookie-scale NBA contract in the 2020 offseason.
What does Okeke have to gain here? Why didn’t he just go ahead and sign his NBA contract this year? You could scrounge up a feasible reason. Team options on rookie deals start in the third and fourth seasons. Okeke will presumably now have more healthy games to prove himself and “earn” those options—though in practice, a first-round pick is very rarely dumped at that juncture—and possibly a larger second contract, on the basis of good play. Because the rookie-scale contract is pegged to the salary cap, which will go up next year, he’ll make more guaranteed money over a four-year deal starting in 2020 than one starting in 2019.
Had Okeke signed a contract this offseason, as the No. 16 pick, he’d earn $2,600,900 and $2,730,900 over his first two seasons. For a contract signed next offseason, the No. 16 pick earns $2,764,300 and $2,902,600. It’s a difference of $335,100, with more potential gains over seasons three and four.
The question is whether this offsets what Okeke gave up. First: the time value of money—it’s better to have that salary in hand now instead of waiting for it to hit next offseason. Second: the much more significant fact that Okeke, who theoretically has a finite number of playing years to earn an NBA salary, has just missed out on an entire season. He doesn’t get to magically start next year at age 21; that money is coming out of the back end of his career. (Details on Okeke’s Lakeland Magic contract have not been reported, but last year’s D-League base salary was $35,000, meaning it is likely to be negligible in the risk-reward calculus.) Whether Okeke truly stands to gain here is murky; what’s clearer is that it serves the interests of the organization, who sure as hell don’t need another power forward this season, and who managed to clear a roster spot and cap space while stringing a young player along without any apparent consequences. In his argument, Ziller raises the cautionary tale of Josh Huestis, who, after getting drafted by the Oklahoma City Thunder in 2014, agreed to a similar redshirt scheme, only to see the fourth year of his contract declined anyway.
Okeke’s situation is an issue that should be addressed or at least scrutinized by the players union, if it could be counted on take up the concerns of 21-year-old, injured quasi-rookies. Unlike “tampering” concerns, there’s zero chance that a rival front office will complain about it; other teams might instead be taking notes and trying to swing the same deal in the future.
Meanwhile, access merchants end up blandly praising the contract structure as a “creative” move, instead of interrogating what’s actually at stake for the player. “The plan figures to be a win-win for both sides,” writes Shams Charania, predictably. A former front-office executive thinks so, too.