Decisions, decisions: the Warriors preseason contract to do list

Basketball is almost here! The sound of the bouncing ball, the swish of the net, the bellow of Draymond Green (AND1!!). Ah, how sweet it is. But before we get to the real games we have the treat of pre-season.

Usually there is some sort of intrigue to enjoy. The past couple of years the Warriors have entered the pre-season with a roster spot open. Two seasons ago we saw Ian Clark fight his way onto the team. Last year Javale McGee resurrected his career and became a champion.

This year, after a successful offseason, the Warriors enter with all 15 spots filled. Sure there will be competition for spots in the rotation, but for now we pretty much know what the roster is going to be.

Two-way contracts

However, this is the first year of the new two-way contracts. HoopsHype had a good explanation on how these will work but here are the basics:

• Each team can sign up to two players to these contracts.
• They allow a team to keep these players under contract when they are in the now ridiculously named G-league.
• For the players they offer a bit more cash and an NBA salary when they are playing on the main squad (for a maximum of 45 days).

Right after the draft the Warriors used one of the slots on Chris Boucher. There is still one space open. So for all the new training camp invitees there is something to play for. It’s likely the Warriors will make a decision based on what they see in the preseason.

Rookie contract extensions

As Harrison Barnes-clone Andrew Wiggins reportedly progresses to a $148m deal, it’s a good reminder that the deadline for rookie extensions falls at the end of the preseason.

For the Warriors this doesn’t matter so much. Thanks to the deal for Andre Iguodala -- a magnificent piece of cap-shenanigans if ever we saw one -- they didn’t have a 2014 pick, the draft class up for extension this time.

But they will have decisions to make on options for Kevon Looney and Damian Jones. The way that first round contracts work is that you have two years guaranteed and then options for the next two years that you pick up in advance. So on both they have an option they need to decide whether to exercise for next season, i.e. 2018-19.

The decision with Jones will presumably be straightforward. Despite missing much of the year recovering from injury, he impressed in the last month of G-league action last year. They’ll want at least another year to evaluate what he can bring.

Entering his third year, Looney is a trickier one to call. So far he has not impressed a huge amount due to injury. There'll definitely be a battle going on between him, Jones, and Jordan Bell for the minutes previously filled by James Michael McAdoo. Presently,it looks like Jones and Bell are ahead of Looney following summer league.

One thing to bear in mind is that the Warriors like to be able to sign a vet for the playoff chase and prefer to have some flexibility on the roster. Ideally you want to create a space by cutting a contract that doesn’t leave money on the cap sheet for future years.

Given that, the obvious course of action would be to not pick up Looney’s option.

So overall, Looney’s likely under some pressure to produce in the preseason. Even if he does impress, they may want to retain that flexibility by not picking up the option and see how he does throughout the first half of the season. In that scenario they can still re-sign him at the end of the year.

Of course, the best option would be to combine Looney’s basketball IQ and rebounding instincts with the bounciness, shotblocking and athleticism of Jones. But ever since Jeff Goldblum turned himself into a fly, these sorts of splicing efforts are best avoided.

Some words on McCaw

The biggest decision on a rookie contract will be what happens with future Hall of Famer Pat McCaw at the end of the season.

As a second round pick signed to the standard two-year minimum deal, the Warriors don’t have any options to exercise right now. (The same will happen with Bell next year: to offer more years you need room under the salary cap or to use part of your mid level exception).

However, they will have ‘Early Bird Rights’ on McCaw as he will have played two years for the Warriors. This means they can re-sign him to a contract up to the league average salary for between two to four years.

They also have the ability to match higher offers under the ‘Arenas provision,’ named after the shafting the Warriors got on Gilbert Arenas.

Those offers are restricted the first two years to the league average salary as well, but can then jump to the maximum McCaw is eligible for over the last two years. This is what’s known as a ‘poison pill’ contract as it’s so difficult for a team to swallow.

How the CBA will help the Warriors

But the Warriors will be helped out by Collective Bargaining Agreement (CBA) here. Danny Leroux’s piece in the Athletic on McCaw’s upcoming free agency is well worth a read, but the two big points he makes are:

• The team offering the contract has to be able to fit the average salary into their cap in the first year rather than the lower starting amount of a poison pill contract.
• In the new CBA the Warriors can spread the cost over the contract. Previously you had to match the poison pill and therefore pay ginormous tax bills in later years.

For reference the maximum for a player who has played up to six years in the NBA is 25% of the cap, which works out as $24.77m for 2017/18.

So — depending on where the cap ends up next year — the maximum offer McCaw can get will be around $66m over 4 years on a structure of $8m, $8m, $25m, $25m. That averages out at $16.5m a year.

The big question is where’s the market for that kind of offer?

What's McCaw's market value?

The fact is that the Warriors may be saved by the free agent splurge of 2016 arising from the new television deal. A lot of teams gave out some monster deals on the premise that the cap would keep rising. But because of those very same deals the cap has risen much more slowly.

So now there are going to be very few teams left with the sort of room to offer big offers to guys beyond the top tier. In fact HoopsHype project only five teams to have maximum cap space next year currently.

Meanwhile Danny Leroux and Nate Duncan project around $300m total cap space across the league next summer, down from $400m this year, and $1bn last year in the cap splurge.

Of course, it only takes one team, but several restricted free agents this year have ended up either holding out or taking a much lower offer than they thought they would get. And next year there’s even less money around.

Ultimately, we’ll find out what happens with McCaw at the end of the season. For now, the important thing to take away is that if McCaw does look like he can be a core piece over the next few years, then the Warriors have the ability to bring him back if they can swallow the financial pill.

For what it’s worth, Danny Leroux ends up predicting McCaw back on a contract closer to the non-taxpayer mid-level exception (MLE), around $5-6m annually instead of the maximum he can get.

Overall, the Warriors enter the preseason in a good place. All the key pieces are locked up. There’s some room for competition for younger players looking to make a name for themselves. And they still possess the ability to create flexibility down the road to add a veteran for the playoff push.