James Harden Will Reportedly Take $15 Million Paycut, Sign 1+1 Deal With Sixers

More than one week into free agency, James Harden appears to be nearing an official agreement to return to the Philadelphia 76ers.

Harden plans to take “a $15 million paycut” and sign a two-year contract with a second-year player option, according to Shams Charania of The Athletic. However, the deal “has not been fully agreed to or finalized” as of yet, according to Kyle Neubeck of PhillyVoice.

Harden’s return to the Sixers should come as no surprise. Earlier this week, Charania said on The Pat McAfee Show that Harden was “going back to Philadelphia, there’s no question he’s going back.” The only question was the exact amount of money and number of years on his new contract.

While the latter question has been answered, the exact amount of money remains unclear. However, the Sixers’ moves over the past week certainly indicated that they had a ballpark figure in mind for Harden’s next deal.

The Sixers hard-capped themselves by spending the $10.5 million non-taxpayer mid-level exception to sign P.J. Tucker and the $4.1 million bi-annual exception to sign Danuel House Jr. That means they are not allowed to cross the NBA’s $156,983,000 luxury-tax apron at any point between now and June 30, 2023.

After signing Tucker, House and Trevelin Queen to a two-year contract with $300,000 guaranteed in 2022-23, the Sixers sat roughly $36.4 million below the apron. Unless they had a trade lined up where they’d shed significant salary, they went into free agency knowing that Harden would be taking at least $10 million less than the $46.5 million maximum salary he could earn as a free agent.

Harden declined his $47.4 million player option for the 2022-23 season to give the Sixers “financial flexibility to bolster the roster,” Charania reported on June 29. Had he opted in, the Sixers would have been limited to the $6.5 million taxpayer mid-level exception and would not have had access to the bi-annual exception, so they likely would landed only one of Tucker or House at best.

It’s still unclear exactly how much Harden will earn this year—and, more importantly, how far the Sixers are from bumping into the apron. Based on Charania’s initial report, though, they should have at least a few million in wiggle room under the apron, and they could clear even more in the coming months.

After re-signing Harden and adding Tucker, House and Queen, the Sixers currently have 16 players on non-two-way contracts. They’ll have to cut at least one of them between now and the start of the regular season, with Queen and Isaiah Joe (whose 2022-23 salary is fully nonguaranteed until opening night) appearing to be the most likely candidates.

The Sixers don’t have any remaining salary-cap exceptions after spending the non-taxpayer MLE and bi-annual exception, which means they can only sign players using veteran-minimum contracts from here on out. Each of those will carry a roughly $1.8 million cap hit, although the Sixers might be done signing guaranteed contracts until they clear up their current roster logjam.

That extra financial flexibility under the apron may be more important for the purpose of midseason trades. Had Harden taken a starting salary in the neighborhood of $35-36 million, the Sixers wouldn’t have been able to take back much more salary than they send out in a trade. Since they have only four players earning at least $10 million this season, it could have been difficult for them to cobble together a trade framework that meaningfully improves their outlook.

Now, they could use the combination of Furkan Korkmaz ($5 million) and Matisse Thybulle ($4.4 million) as the primary salary to take back someone earning in the low eight figures. Dallas Mavericks wing Reggie Bullock could be one such target, and a 2-for-1 swap like that would also help alleviate the Sixers’ need to cut someone ahead of the regular season.

If the Sixers are currently negotiating such a trade, that may be among the reasons why Harden has yet to sign his contract. They might want to know exactly how much additional salary they’re taking back in a deal before Harden puts pen to paper and locks in exactly how much wiggle room they have under the apron.

Either way, the reported terms of this deal are a win-win for Harden and the Sixers. Harden has now guaranteed himself a hefty payday in 2023-24 even if he suffers a major injury or continues his backslide, but he could opt out and cash in on an even larger deal with a bounce-back 2022-23 campaign.

The Sixers can give Harden a starting salary of no more than 35 percent of next year’s salary-cap figure. The 2023-24 cap is currently projected to land at $133 million, which means he’d be eligible for a maximum starting salary of $46.55 million, with 8 percent annual raises from there.

Both Harden and the Sixers can cross that bridge next year. In the meantime, they now have another season to feel one another out and gauge whether this partnership is in each of their long-term best interests.

Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac or RealGM. All odds via FanDuel Sportsbook.