Report: Warriors and Klay Thompson taking it slow and steady on extension talks

The 2023-2024 season is approaching fast. With it comes questions that were temporarily shelved during the doldrums of the off-season — the biggest one arguably being this: Will the Golden State Warriors and Klay Thompson reach an agreement on a contract extension?

Thompson is entering the final year of his five-year $189.9 million contract, which will pay him $43.2 million this upcoming season. That weighs heavily on the Warriors’ cap sheet, where they’re currently mired in the second tax apron bracket that was recently instituted by the new CBA deal.

Per Anthony Slater of The Athletic, the Warriors and Thompson aren’t in a huge rush to hammer down a deal:

“No official offers or counteroffers have been made from either side, according to league sources who were granted anonymity so that they could speak freely. No exact salary numbers have been floated. There isn’t a rush from either side, and there isn’t a deadline. It could theoretically be done in-season, though I’d expect serious discussions (and perhaps an agreement) to come before that.”

The second apron has made it tricky for the Warriors to navigate their cap situation. Should they find themselves still stuck within it at the start of the 2024-2025 season, they’ll be hit by several punitive measures — such as the loss of the taxpayer mid-level exception (TPMLE), a ban on including cash as part of trades, the inability to accept more salary in trades than they send out, and not being able to sign players on the buyout market.

Per Slater, trading away Jordan Poole for Chris Paul should be a clear sign that they intend to retain Thompson on a new deal:

“That Poole-for-Paul swap should be viewed (among other things) as a clear sign of the Warriors’ commitment to keeping Thompson. He’s owed $43.1 million this season. An alternate path to duck under the second apron would’ve been to let Thompson’s contract expire and allow him to walk. But they’ve been firm in their intent to eventually extend him, and Thompson has maintained a desire to return.”

Per Slater, the cap is projected to increase by 4.2 percent next season, but some in the league expect that to land somewhere between 5 to 10 percent. Every percentage point increase gives the Warriors $1.4 million in breathing room.

Here are the figures Slater and The Athletic cap expert Danny Leroux posted, contingent on the expected cap raises mentioned above and if they manage to wipe Paul’s contract off of their books by the 2024-25 season:

4.2 percent cap increase

• Cap number: $142,000,000
• Tax number: $172,000,000
• Second apron estimate: $190,522,052
• Available money for Thompson: $42,070,059

5 percent cap increase

• Cap number: $142,822,050
• Tax number: $173,588,700
• Second apron estimate: $191,625,000
• Available money for Thompson: $43,136,388

10 percent cap increase

• Cap number: $149,623,100
• Tax number: $181,823,400
• Second apron estimate: $200,750,000
• Available money for Thompson: $51,958,432

Of course, the available money for Thompson won’t be used up entirely toward a new contract. The Warriors trying to get under the second apron would mean that the TPMLE would be made available to them, which would cut into Thompson’s available money. They could use that TPMLE to sign a useful rotation piece. Or they could even try to retain Paul if he desires a return and if he’s willing to accept a significant pay cut.

Retaining Thompson isn’t just a challenge of making the numbers work — it’s also convincing him to accept fewer dollars to return to a team that has built lots of goodwill and camaraderie with him throughout his entire career. It worked with both Draymond Green and Andrew Wiggins, both of whom signed team-friendly deals to stay with the Warriors.

Despite the decline in defensive capabilities, Thompson is still very much a valued player in a league that places a huge premium on shooting. He led the league in made threes (301) and shot 41.2 percent on 10.6 three-point attempts per game. If he’s not still the second-best shooter in the league (Buddy Hield has a legitimate argument with his 288 made threes last season — second behind Thompson — and 42.5 percent on 8.5 attempts per game), he has a pretty good case for it. It’s not far-fetched to think that other teams will field competitive offers for him should he decide to enter free agency next offseason.

But if there’s hope for the Warriors, it’s the history they have with Thompson, his desire to finish his career with the team that drafted him and won four championships with, and the precedence of Green and Wiggins signing for less money.