Jaylen Brown Is Latest Example Of Why NBA Should Change Its Extension Rules

Despite being fresh off a run to the 2022 NBA Finals, Boston Celtics swingman Jaylen Brown has popped up in the NBA’s rumor mill this offseason. The Celtics reportedly offered a package featuring Brown to the Brooklyn Nets for disgruntled star Kevin Durant, according to Shams Charania of The Athletic, although the Nets wanted more beyond Brown than the Celtics were willing to offer.

Durant is a clear upgrade talent-wise over Brown, so it’s easy to understand why the Celtics would be willing to offer him in such a deal. Brown’s contract status also likely factors into that decision, though.

Brown has two years remaining on the four-year, $106.3 million contract extension that he signed with the Celtics in October 2019. He’s currently set to become an unrestricted free agent following the 2023-24 season, and there’s little reason to expect that to change unless he makes an All-NBA team either this year or next year.

The Celtics have the NBA’s extension rules to thank for that. They aren’t the only team facing a potential headache in that regard, though.

Under the league’s current collective bargaining agreement, players can receive up to 120 percent of their previous salary or 120 percent of the estimated average salary (whichever is greater) in the first year of an extension. That limit is problematic for Brown or any other veteran who doesn’t sign a max extension after their rookie-scale deal. (Just ask Draymond Green.)

Brown is currently set to make roughly $30.7 million in 2023-24, the final year of his current contract. (He has an additional $1.1 million in unlikely-to-be-earned incentives.) That means his next extension could start no higher than around $36.9 million, with 8 percent annual raises from there. The four-year total would come out to nearly $165.2 million, per Keith Smith of Spotrac.

However, Brown could potentially make far more if he reaches free agency in 2024. At that point, he will have eight years of NBA experience under his belt. That means his starting salary on a new deal as a free agent can go up to 30 percent of the 2024-25 salary cap.

Using RealGM’s current projection of $139.65 million for that year’s salary cap, Brown’s starting salary could go as high as $41,895,000, or $5 million higher than he can receive in an extension from Boston. That cap projection is likely conservative, too, seeing as the cap jumped by more than $10 million this season and is projected to rise by nearly $10 million in 2023-24.

With a starting salary of roughly $41.9 million, Brown’s four-year max contract from Boston in 2024-25 would come out to nearly $187.7 million. That’s more than $20 million above what he could earn on an extension, and again, that’s likely a conservative projection.

In other words, it currently makes no financial sense for Brown to sign an extension with the Celtics before he becomes a free agent in 2024. A pair of variables could change that, though.

If Brown gets named to an All-NBA team either this year or next year, he’ll become eligible for a designated veteran extension. That would allow his starting salary on an extension to go as high as 35 percent of that year’s salary cap, or $48,877,500 using the $139.65 million projection for the 2024-25 cap. He could receive 8 percent annual raises from there, which would bring the five-year total of his new deal to roughly $283.5 million.

Brown has never made an All-NBA team and has been selected as an All-Star only once, though. The Celtics also added Malcolm Brogdon and Danilo Gallinari without losing anyone of consequence this offseason. He’s unlikely to play enough minutes or put up the numbers to merit an All-NBA nod, which would make him ineligible to sign a designated veteran extension.

If that’s off the table, Brown will instead have to hope that the NBA and National Basketball Players Association agree to amend extension rules during their ongoing CBA negotiations. The current CBA is set to run through the 2023-24 season, but either the league or the players union can opt out by Dec. 15 to make it expire after this upcoming season.

Looming over those negotiations are the NBA’s new national television contracts, which expire after the 2024-25 season. Last March, CNBC’s Jabari Young reported that the NBA was planning to seek a $75 billion rights package, which is more than triple its current nine-year, $24 billion deal. That could send the salary cap soaring in 2025-26 and beyond, much like this latest TV deal did to the 2016-17 cap.

If that comes to pass, Brown won’t be the only player in the coming years for whom an extension makes no financial sense. Dejounte Murray, Mikal Bridges, Jaren Jackson Jr. and Domantas Sabonis are among the league’s up-and-coming stars who might be disinclined to sign extensions under the league’s current rules.

Depending on how much the new TV deal causes the salary cap to rise, that could even apply to max players. As John Hollinger of The Athletic noted, Donovan Mitchell and Ja Morant might both be able to earn more as free agents than they can on extensions when their current contracts expire, which could put their teams in uncomfortable situations later in the decade.

So, what’s the solution? The easiest tweak would be allowing players to sign extensions with the same starting salary that they’d be eligible to receive as free agents. Their incumbent teams could still offer one extra year and higher annual raises (8 percent) than any other team (5 percent), which should incentivize players to sign extensions.

Then again, the league office might not want to help more stars bypass free agency. There’s typically a ton of interest around the league at that time of year, but that might not be the case if the free-agent market routinely lacks difference-makers.

The recent cases of Ben Simmons and Kevin Durant also might the league wary about players who demand trades shortly after signing extensions. If players push to eliminate the restriction on extension salaries, teams might try to counter with a proposal to prevent future Simmons- or Durant-esque scenarios. That could include a reduction in salary if a trade request becomes public or changing salary from guaranteed to nonguaranteed in future years of a contract.

The NBA has to weigh the upside of facilitating more extensions against the downside of stars asking out shortly after signing those deals and the devaluation of free agency. Teams and players should both prefer the former, though. Even if stars ask out, teams can at least recoup value in a trade rather than losing them for nothing in free agency.

The 2011 CBA allowed players to only receive 107.5 percent of their previous salary in the first year of an extension, so this current CBA took a positive step forward in that regard. But with the incoming influx of revenue from a new national TV deal, the league and players union should look to further increase teams’ flexibility in extension talks to avoid Brown-esque situations moving forward.

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.