Breaking Down Sixers’ Options With James Harden’s Next Contract

When the Philadelphia 76ers acquired James Harden in a blockbuster deal at the trade deadline, they thought he’d be the missing piece to help push them over the top for a championship.

“I think every year from now ’til the end of this run will be the most important year,” team president Daryl Morey said during an appearance on the Rights to Ricky Sanchez podcast after the trade. “This year, most important. Then next year, when we’re in it, will be the most important. I mean, the time is now, which I love. Which I love. It may take us some time to figure it out, but the time is now.”

Instead, they find themselves right back where they ended last season: reeling after a second-round playoff loss that raised more questions than answers.

The Sixers are now heading into a pivotal offseason that may determine whether they’re ever able to assemble a championship-caliber supporting cast around two-time MVP runner-up Joel Embiid. Harden’s long-term future will be their biggest offseason dilemma.

Harden could become an unrestricted free agent this summer by declining his $47.4 million player option for the 2022-23 season. He could also pick up the option and sign up to a four-year, $223 million extension in mid-August, or he could pick up the option with the intention of becoming a free agent in 2023, when more teams project to have salary-cap space.

What’s the Sixers’ best path forward with Harden? Let’s break it down.

Max Options

Regardless of whether he declines or picks up his player option, Harden will be eligible to sign the biggest contract in NBA history this offseason.

Harden earned roughly $44.3 million this past season, so if he declines his option, he’d be able to sign a five-year, $269.9 million max deal with a starting salary around $46.5 million. If he picks up the $47.4 million option, he’ll be eligible to sign a four-year, $223 million extension on Aug. 10, the six-month anniversary of his trade to Philadelphia.

Here’s the year-by-year breakdown of those two options:

The question is whether this version of Harden is worth that type of money. As Embiid told reporters following their Game 6 loss to Miami, Harden no longer appears to be the player who led the league in scoring for three straight seasons from 2017-18 through 2019-20.

“Since we got him, everybody expected the Houston James Harden,” Embiid told reporters. “But that’s not who he is anymore. He’s more of a playmaker.”

Harden averaged 21.0 points, 10.5 assists and 7.1 rebounds during his 21 regular-season games with the Sixers, and he had 18.6 points, 8.6 assists and 5.7 rebounds during his 12 playoff outings. However, he shot only 40.2 percent overall and 32.6 percent from three-point range in the regular season and 40.5 percent overall and 36.8 percent from deep in the playoffs.

Whether due to age or a lingering hamstring injury, Harden is now a shell of his former self. Citing Second Spectrum data, ESPN’s Tim Bontemps noted that Harden blew by defenders of 44.1 percent of his drives in 2019-20, his final season in Houston. That fell to 30.3 percent last season and 29.1 percent this season, which greatly reduced his efficiency.

Harden is still capable of the occasional turn-back-the-clock performance, as he showed during the fourth quarter of Game 4 against the Heat. He erupted for 16 points while hitting an array of his trademark step-back jumpers to stave off a Miami comeback attempt and even the series at two games apiece.

However, that version of Harden was nowhere to be found in Games 5 and 6. He finished with only 11 points on 4-of-9 shooting, nine assists, four rebounds and four turnovers in the Game 6 loss, and he had zero points on 0-of-2 shooting during the second half.

Unless the Sixers are confident that Harden’s hamstring injury is the root of his struggles and that he can regain his previous form, they cannot in good conscience give him a five-year max deal this summer. That would likely become the NBA’s biggest albatross of a contract as soon as he puts pen to paper.

Luckily, they have a few potentially viable alternatives.

Non-Max Options

When asked after Game 6 whether he planned to pick up his $47.4 million player option for next season, Harden replied, “I’ll be here.” He also hinted that he’d be willing to settle for a non-max extension, telling reporters, “Whatever it takes to help this team grow.”

Depending on how much less he’s willing to take, that might wind up being the Sixers’ best-case scenario.

If Harden opts out to become a free agent, he could take any salary up to $46.5 million in his first year, and his contract could increase or decrease by 8 percent each year from there. If he picks up his player option, he could then sign up to a four-year extension with a starting salary up to $49.7 million and the same annual 8 percent increases or decreases.

Harden and the Sixers first must agree upon a total number of years and amount of money for his next contract. From there, Harden should allow Morey to structure it how best he sees fit.

Danny Leroux of The Athletic floated a hypothetical scenario in which Harden agrees to a five-year, $175 million framework, which could then be structured several different ways:

If Harden isn’t willing to settle for $95 million less than his max, here’s how a five-year, $200 million deal could be structured:

Why would Harden be willing to settle for anything less than the max? For one, he might not have an alternative.

Few teams are projected to have any salary-cap space this offseason, and none will have enough room to sign him to a max deal outright. It’s also fair to wonder whether any team would be willing to give him a long-term max contract after watching him force his way out of both Houston and Brooklyn with lethargic play over the past year-and-a-half.

There are potential roster-building advantages to him taking less than a max with the Sixers, too.

Not counting Harden and Danny Green, whose $10 million salary for 2022-23 is fully nonguaranteed, the Sixers have 11 players under contract for next season for roughly $96.1 million. They won’t have cap space unless Harden leaves as a free agent, but his salary next season could determine whether they have access to the $10.3 million non-taxpayer mid-level exception and $4.1 million bi-annual exception or are limited to only the $6.4 million taxpayer MLE and veteran minimum deals.

Based on the current cap projection of $122 million, the 2022-23 luxury-tax apron is projected to land just south of $155.7 million. The Sixers could not cross that line at any point next season if they use either the NTMLE or BAE.

If they waive Green and Harden begins an extension at $40 million, they’d have $136.1 million tied up in 12 players, leaving them nearly $20 million to spend on three roster spots. They could use the NTMLE and BAE and still have roughly $5 million to spare with only one roster spot to fill. A veteran minimum will cost roughly $1.8 million next season for cap/tax purposes, so they’d be left with nearly $3.4 million in breathing room below the apron.

If the Sixers are content with running this same core back and filling in pieces on the margins, they could effectively work backwards to come up with the structure of Harden’s next contract. They should figure out how much room they need to use both the NTMLE and BAE, then determine Harden’s starting salary from there if he does opt out.

Either way, they should structure his next deal to descend rather than ascend to ensure his salary is commensurate with his declining production as he ages. If the salary cap soars as expected in the mid-2020s once the NBA’s new national television contracts kick in, he’ll take up a far lower percentage of the Sixers’ cap space each year on the back end of his deal.

Sign-And-Trades

If Harden isn’t willing to settle for less than a max and the Sixers aren’t willing to meet him at that price, they could explore sign-and-trades this offseason. Harden can sign a four-year, $200.1 million contract with any other team either as a free agent or via a sign-and-trade.

Any team that receives Harden in a sign-and-trade would not be allowed to exceed the $155.7 million apron at any point next season. If he took his full $46.5 million max salary for next season, that team would have no more than $109.1 million to spend on his supporting cast.

Given his age (he turns 33 in August) and the signs of decline that he’s already beginning to show, even the most desperate teams might not be willing to shell out that amount of money for Harden. But it only takes one team to meet his asking price and force the Sixers into a difficult decision.

Since no team has enough cap space to sign Harden outright, a sign-and-trade could spare any interested suitor from having to spend assets to dump some of their other contracts. It would also allow the Sixers to not walk away empty-handed from the Harden trade, although they’d get nowhere near commensurate value to what they gave up for him.

Allow Harden To Walk?

If the Sixers think they’re better off without Harden, they could hope he declines his player option and then allow him to walk for nothing in free agency. This is the most unlikely option, though.

Even if they let Harden go and waive Green, they’d have roughly $25 million in cap space to round out their roster, plus the $5.3 million room MLE. They could clear upward of $60 million in room by finding a team that’s willing to take the remaining two years and $76 million of Tobias Harris’ contract, but that would leave them with little else beyond Embiid and Tyrese Maxey.

If the Sixers have reason to believe that they could lure the likes of Bradley Beal and/or Zach LaVine in free agency, they might consider this path. However, Harden could thwart that plan by picking up his player option.

Unless extension negotiations break down between the two sides over the coming weeks, Harden is almost certain to return to the Sixers next season. How they structure his new contract might largely determine whether they can ever build a championship contender around him and Embiid.

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