Why teams held the line at the extension deadline, and which clubs made out best

The first rule of contract extensions is that you are not required to do contract extensions.

Somewhere along the way, it seems like teams may have forgotten about this fact, especially when we tipped off our summer with four capitulations on max contracts for players at the top of the 2021 draft who are … good … but have yet to make a convincing case that they’re franchise players.

Fortunately, it seems at least a few teams discovered their spines over the summer and stuck to their guns at Monday’s deadline for rookie contract extensions. With virtually every starting-caliber player seeking “The Quickley” (more than $30 million a year guaranteed, matching the deal Toronto’s Immanuel Quickley signed this summer), teams mostly either took a harder line or passed entirely on doing a deal now in order to wait until next summer.

That feels like the right play, for the most part, because of the one golden rule that underlies any transaction in any market: Who are you bidding against?

In the case of a potential 2025 free agency for the players who were extended, it’s a small list. While teams can make deals in-season to generate more cap space, currently the Brooklyn Nets are the only team in position to drop a whopper-sized offer sheet next summer. And given that the Nets control their own draft pick in 2026 and might have the league’s worst roster at the moment, it’s not exactly a given that they’ll be jumping into bidding wars for talent just yet.

San Antonio, perhaps, is a more realistic foil given that the Spurs already have a supernatural talent in Victor Wembanyama. The Spurs would be capable of max-level space next summer if they hadn’t extended Zach Collins (pardon me while I smash a fork into my eyeball). Even with their current roster and at least two first-rounders arriving on the books in 2025, San Antonio could be a player for the Quickley-class starters who typically make $20-30 million a year these days. Charlotte could also be a player at the $20-25 million level if they keep the books clean, but the Bugs are rebuilding too.

And then … crickets. Nothing. Bupkus. Between that, and the fact that the players who were negotiating rookie contract extensions also will be restricted free agents — thus giving their teams the right to match — the teams were entering these discussions in a strong position. They didn’t need to give away their leverage, and for the most part they didn’t.

The perfect example was in the two most notable deals that weren’t signed, in Golden State and Chicago. Yes, the Warriors may have been afflicted with a touch of “Pooleaphobia” after their last extension adventure. However, the bigger motivation likely was the knowledge that a Godfather-type offer sheet for Jonathan Kuminga seemed unlikely, even if he ends up being the team’s second-leading scorer this season. Golden State had the leverage and didn’t need to give it away just for appearances.

(I’ll also note that the Warriors retain the flexibility to use Kuminga for an in-season trade as well, something that largely went away if they agreed to an extension because of the trade rules on those deals. Finally, while we’re here: Golden State got a nice deal on Moses Moody at three years and $39 million. He has limitations and the Warriors haven’t always seemed to trust him, but he’s a solid 3-and-D guy who doesn’t need to be anything more than that to justify this price.)

Similarly, it seemed Josh Giddey might be able to coax the Bulls into an expensive extension after he was the return — the entire return, with no draft picks — on the offseason Alex Caruso trade. However, Chicago didn’t want or need to get to a Quickley-esque number a year ahead of time and has a full year to evaluate him in a Bulls uniform before committing to a decision. Kudos to the Bulls for not worrying about the sunk cost of the trade and focusing on the business at hand. This is the third straight year they’ve gone into restricted free agency with a former lottery pick rather than committing early on an extension.

Additionally, the one important veteran extension completed in this time frame also reflected cap space realities. None of those room teams I mentioned were breaking the bank for Aaron Gordon this summer, so Denver was able to get an important concession — him opting into his 2025-26 deal for a below-market $22.8 million — and topping him up with a three-year, $105 million extension in the out years.

As noted in this piece by Tony Jones, Sam Amick and I (he said, sheepishly, after Tony and Sam did 98.4 percent of the lifting), the Nuggets got an important concession on the 2025-26 salary, and not just because it will save the Kroenkes money on luxury and repeater taxes.

Denver can now operate below the second apron next season and use its taxpayer midlevel exception to bolster the roster; perhaps of equal important, the Nuggets can aggregate salaries in trades starting July 1. That would make it more plausible to, say, move Zeke Nnaji’s dead-on-arrival $33 million extension, another small contract or two, and a 2032 first-rounder for another roster upgrade.

Which takes us to the rookie extension deals that were agreed upon, as, for the most part, they also reflected a team-friendly marketplace.

The most notable example was in Houston, where the Rockets had two of the best six players from that 2021 draft but were a marked contrast to the summer surrender brigade that saw the other four all agree to max deals. League insiders were unsure either of the Rockets’ two extension-eligible players, Alperen Şengün and Jalen Green, would ink deals, but ultimately both did in the final hours.

Houston signed Green to an unusually short deal for an extension, just three years with a player option after the second, and committed to $106 million. Şengün’s deal is for similar annual money but runs five years, for a total of $185 million, and also includes a player option.

Let’s start with the low hanging fruit: Şengün’s deal is a home run. A possible All-Star as soon as this season, he has the highest career PER of any player from that 2021 draft but is on Houston’s books for about $8 million less than the Pistons will pay Cade Cunningham. The Rockets gave up a fifth-year player option in this structure, likely losing some upside on that year if there’s another extension in a few years. However, having a player of his caliber signed for an estimated $31 million next season is a massive win.

Şengün’s deal also took Houston out of 2025 cap room scenarios (Green’s deal was largely irrelevant for these purposes since his cap hold and first-year salary in the extension were nearly identical) that would have taken advantage of his below-market $16 million hold. That was a tight window, however: The Rockets would have had to decline Fred VanVleet’s contract option and tighten the belt elsewhere to take advantage. In the wake of summer extensions for some of the better potential 2025 free agents, I’m not sure anyone left on the board was worth that type of trade for Houston’s current roster.

As for Green, it’s probably the right approach with one of the league’s most Jekyll-and-Hyde players. The Rockets lose the upside of a long deal if he blows up, but also didn’t unnecessarily tie their hands by committing to a long-term max or near-max. Meanwhile, the flight risk in this deal seems largely theoretical. Green has an opt-out in 2027, but he would be eligible to make more money in free agency if he waited until summer 2028.

Additionally, the way the league is trending now, Houston would almost certainly extend him in 2026 if he explodes into a star. In that scenario, Houston could replace his player option year at $36 million with a raise to $50 million, and add three years at a combined $175 million on top. We’re getting ahead of ourselves now, but humor me: Green could then hit free agency in 2031 with 10 years of service, newly eligible for 35 percent of the cap at a moment when the cap could be nearly double what it is now (1.95 times, to be exact).

The shorter deal also limits the downside of going long with a mercurial player like Green. That matters more in Houston than some other places, where the Rockets will have a succession of similar decisions facing them in coming seasons. The opportunity cost of a half-decade bad deal is larger than in some other markets.

Finally, a lot of the concern about Green’s deal seems to be “What if he’s really bad?” or “What if he’s amazing?” That’s relevant given his seemingly high variance; he looks either awful or awesome, often within a span of a few plays. But what if that all averages out to him ending up as, say, the ninth-best shooting guard in the league or something? That deal seems pretty fair then, right?

Speaking of which … you’ll notice that this package looks a lot better in the aggregate than individually. The Rockets avoided maxing either player and will have a combined cap hit for the two of $65 million in 2025-26. Thus, Houston projects to be just under next year’s luxury tax line. Houston also avoided putting incentives in either deal that would have pushed it further toward the tax aprons in future seasons.

(Cap nerds take note: Incentives basically vanished as a tool for extensions this year, as teams become increasingly weary of their impact on first-apron calculations. The new CBA counts them even if they are unlikely to trigger. The only exception was Gordon, whose deal had to have the incentives carry over in his extension).

Houston being under the tax in 2025-26 is important because the roster projects to get expensive in a few years once all the young talent moves on to second contracts. It could get phenomenally expensive if everything goes right. They are going to be paying the repeater penalty, almost certainly, once you get to the out years for all their kids. Holding the clock on that is important for more than just Tilman Fertitta’s wallet.

Those were the most interesting cases, but let’s do a lightning round regarding three other prominent extensions:

Atlanta

I didn’t think $26 million for Jalen Jonson was all that bad — his BORD$ projection for this year was $24.7 million, barely less than that of Green or Şengün. However, some in the league thought so because of his lesser ability to be a go-to guy and the leverage the Hawks had going into restricted free agency next summer. Whispers were that the sides were far apart a few days ago, but the Hawks apparently bucked the trend shown by other teams by coming up to Johnson’s number late.

I already wrote some thoughts on the Johnson deal so I won’t repeat too much here, but suffice it to say I think this a good value even though the Hawks possibly could have waited. Even if Johnson tops out as a team’s third or fourth-best player, and the number is low enough to pack in some upside in the out years if he develops beyond that level. The number also tucks pretty nicely into the Hawks’ long-term financial plan.

New Orleans

The Pelicans might have done the two best extension deals of the summer, with a two-year, $9 million package for backup point guard Jose Alvarado and now Trey Murphy’s four-year, $112 million extension. Murphy’s BORD$ value of $36 million was higher than all but three other 2021 rookies, and those three all got the max.

Murphy is also older than most of the others at 24, but that’s where the four-year deal could work to the Pels’ advantage as well. They could have gone out to five years, but that would have involved escalating salaries into his age-29 season. The risk of him going nuclear and hitting free agency as an age-28 superstar is relatively small since he’s not an on-ball player, but the Pels put a firm lid on their downside.

In the meantime, league insiders are trying to read the tea leaves on what this means for Brandon Ingram’s future. With the Pelicans operating with a de facto hard cap at the tax line, Murphy’s estimated $25 million salary for 2025-26 makes it seem impossible for both Ingram and C.J. McCollum to be on next year’s roster. McCollum’s deal ($30.7 million for 2025-26) is likely untradeable, and Ingram is a free agent after the season. Efforts to move Ingram for value in the offseason generated little progress. Could he possibly walk as an unrestricted free agent this summer?

Orlando

The Magic’s deal with Jalen Suggs for five years and $151 million is low-key the most interesting one of this cycle.

For starters, it might be the most questionable in terms of valuation and the potential 2025 marketplace: League insiders raised an eyebrow that the money got this high for an off-ball player. However, the analytics supported this contract number; Suggs’s BORD$ valuation for this coming season is $29 million.

Nonetheless, you could argue the Magic should have waited and used their leverage into next summer on Suggs. It doesn’t necessarily pass the “Who were you bidding against?” test. Nobody was blowing them out of the water in restricted free agency. Why did they need to commit this big now?

However, Orlando got something important out of it, too. When it comes to the cap, what matters is not just how much you pay a player but when. The latter is the key to this deal.

By locking in Suggs for five years on a deal where the money descends year-to-year — something that wouldn’t be possible via matching an offer sheet — the Magic give themselves the upside of potentially the most important years of the contract. Those are the years at the end of the deal, right when the rest of their roster is at its most expensive (presuming a max extension for Paolo Banchero).

Suggs’ deal will pay him $35 million in 2025-26, according to league sources, which doesn’t sound great. However, having him locked in at $26.8 million and $26.7 million in the last two years, for his age-27 and age-28 seasons, sounds absolutely delightful. Orlando will have two max deals by then and will potentially have to pay other recent draft picks and/or fortify the roster via midlevel free agents and trades. Declining Suggs 8 percent a year while the cap is rising 10 percent a year leaves Orlando some generous wiggle room to navigate our new Apron Era.

This strategy likely involves a bit of short-term pain, because there’s another wrinkle to this as well. The Magic have 15 players under contract for next season and will have two first-round draft picks in June. By front-loading Suggs’ contract, they put themselves $11 million over next year’s tax line. They have the optionality to get back under, with four different team options totaling $24 million plus a couple of other tradable contracts, but it’s an interesting choice when a more traditional structure would have taken the tax and apron much further out of play next season.

That same thought applies doubly so in 2026-27, when Banchero will start a likely max deal (and possibly a Rose Rule max for 30 percent of the cap) and Wendell Carter’s extension bumps him to $18 million. The Magic will have to do some serious limbo on the back end of the roster.

This strategy may also speak to managing the first apron more than the tax. If Orlando only aims to stay short of that latter figure, it doesn’t need to shed much salary in the short term.

In the big picture, however, Orlando’s tactics are clear. Suggs’ deal is the fourth contract the Magic have done in the last year with descending money, joining Kentavious Caldwell-Pope, Goga Bitadze and Jonathan Isaac.

That’s because the Magic want to keep their future cap flexibility to add players in the out years when this roster figures to be at its peak. (Isaac’s renegotiate-and-extend, when he rises to $25 million this year before dipping to $16 million a year from now, is the most extreme example of this strategy.)

Thus, needing to shed bit players in the summer of 2025 is a small price if it allows them to have one more starter-caliber player on the team when Wagner and Banchero are on max deals in their prime seasons; paying Suggs nearly $10 million less in those seasons opens up those dollars.

(Photo of Alperen Şengün and Jalen Green: Tim Warner / Getty Images)