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New CBA could give Pelicans massive homecourt advantage with Anthony Davis

Six years and almost $275 million? Anthony Davis could see incredible offers with the new CBA.

NBA: Los Angeles Lakers at New Orleans Pelicans Derick E. Hingle-USA TODAY Sports

The NBA and NBA Players Association came to a tentative agreement last night on a new CBA, practically ensuring labor peace for the next six years. In it, small market teams were given a new tool to keep their most valuable superstars. As Zach Lowe reported, NBA teams can select a designated veteran for a new kind of exception.

This is potentially huge for the New Orleans Pelicans to keep Anthony Davis around beyond this contract. First, a little back story. Davis will have eight years of NBA service when he can opt out of his current contract in the summer of 2020. Under the old CBA that sets him up for a raise up to 30% of the salary cap. As Zach Lowe describes below NBA teams utilizing a new Designated Player extension will be able to offer 35% instead of just 30%. When the salary cap exceeds $100 million, as it is expected to do as soon as next year, we’re talking nearly $5 million in the first year alone.

There is precedence for this found in the older Rose Rule extension for players coming off rookie contracts. NBA teams trying to keep a player who had started at least two All-Star Games, or were selected to at least two All-NBA teams, or won the MVP could offer 30% instead of the 25% reserved for players with less than seven years of NBA service. While the exact criteria has yet to be reported something in a similar vein, but eliminating the All-Star starter portion in favor of a Defensive Player of the Year award or something more honorific, could be on the way.

This might work with a renegotiation and extension (discussed before in relation to Jrue Holiday) giving New Orleans an even greater advantage. Extensions are currently permitted after three years have elapsed on the previous contract. This would put Davis up for a possible extension in the summer of 2019. Using some rough (very rough) estimates of a $110 million cap and 7.5% raises New Orleans could hypothetically offer a six year extension (beginning in the 2019-20 season) worth nearly $275 million.

Compare that to what Davis could seek on the free agent market in 2020. First, he’s less over $11 million at the outset because the Pelicans could give him a substantial raise for the 2019-20 season rather than play out the remainder of his contract. Second, the Pelicans begin at 35% instead of 30% on the market and 7.5% raises instead of 4.5%. Third, they offer an additional year guaranteeing the 2024-25 season. The total difference in earnings from 2019-2024, ignoring the extra year, is nearly $50 million.

Even without a renegotiation, and even ignoring the extra year, the bump from 30% to 35% and the differences in raises is $30 million over four years. Here’s a look at my (again, very rough) estimates. I didn’t do the leg work or estimating a precise amount to begin each contract, using 30% or 35%. The actual value will be lower. The salary cap estimates are a shot in the dark guessing that the cap continues to grow.

New CBA Options for Anthony Davis and Pelicans

Anthony Davis Option 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Total (New Contract)
Anthony Davis Option 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Total (New Contract)
Veteran Max Renegotiate and Extension $38,500,000 $41,387,500 $44,275,000 $47,162,500 $50,050,000 $52,937,500 $274,312,500
Veteran Max Extension $27,093,019 $40,250,000 $43,268,750 $46,287,500 $49,306,250 $52,325,000 $55,343,750 $286,781,250
Leave in Free Agency $27,093,019 $34,500,000 $36,311,250 $38,122,500 $39,933,750 $148,867,500
Salary Cap Estimate $110,000,000 $115,000,000

Please note, that total (new contract) is the sum of the new contract Davis would sign at that time. So, a six year renegotiation and extension beginning in 2019 totals $274 million. Doing a six year extension after his 2020 season (the 2019 value is what is already on the books according to Basketball Insiders) totals from 2020-21 through 2025-26. Leaving in free agency begins in 2020 and runs four years.

Is this a guarantee that Davis is going to remain in New Orleans? Of course not, but with the new CBA it is clear that owners are trying to tilt the field even further in favor of stars staying put. Will the extra dollars be enough? Just in case the front office should try to have a solid team around AD when the time comes.