NBA's New Extension Rules Made Dejounte Murray's $120 Million Contract Possible

ATLANTA, GEORGIA – APRIL 23: Dejounte Murray #5 of the Atlanta Hawks reacts after drawing a foul on … [+] a basket against the Boston Celtics during the first quarter of Game Four of the Eastern Conference First Round Playoffs at State Farm Arena on April 23, 2023 in Atlanta, Georgia. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Kevin C. Cox/Getty Images)

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The Atlanta Hawks and Dejounte Murray are in the midst of finalizing a four-year, $120 million contract extension, according to both Shams Charania of The Athletic and Chris Haynes of TNT and Bleacher Report.

Murray has the NBA’s new collective bargaining agreement to thank for his nine-figure windfall.

Under the previous CBA, teams could offer only 120% of the player’s previous salary or the estimated average salary as the starting salary of a new extension. The current CBA, which went into effect on July 1, now allows teams to offer 140% of the player’s previous salary or the estimated average salary as the starting salary of a new extension.

That was a critical change for Murray, who has only a $17.7 million base salary in 2023-24 along with $500,000 in likely-to-be-earned incentives and another $1 million in unlikely-to-be-earned incentives.

Both the former CBA and the new CBA allowed likely and unlikely incentives to factor into extension values. But like the starting salaries, the former CBA allowed teams to offer only 120% of the previous incentives, while the new CBA allows teams to offer 140%.

What does all of that mean in real-money terms? With both likely and unlikely incentives factored in, Murray can earn a maximum of $19.2 million this year. Under the old CBA, the Hawks couldn’t have offered him more than $23.1 million as the starting salary of an extension, and it would top out at four years and $103.3 million.

With the bump up to 140%, the Hawks can offer Murray a maximum of $26.9 million in 2024-25 and a four-year, $120.5 million extension. That’s a nearly $4 million increase in possible starting salary and a $17.2 million difference in total. Perhaps Murray would have signed an extension under the old rules as well, but getting an additional $17-plus million likely helped sway him.

It’s fair to wonder whether Murray might have made even more as a free agent next summer. He would have been eligible for a maximum starting salary of nearly $44.9 million and a five-year, $260.3 million deal with the Hawks or a four-year, $193.0 million deal with any other team. He’s settling for more than $70 million less than what he could have earned, but there’s no guarantee that the Hawks or any other team would have offered him a long-term max deal, either.

Perhaps Murray saw what happened during the first few days of free agency—Fred VanVleet and Dillon Brooks were the only two players who changed teams and signed deals worth at least $80 million—and decided against testing the waters himself. Plenty of teams could have a mountain of cap space next summer, but extensions and trades will inevitably cut into that over the coming months.

Whatever the case, it’s an undeniably great deal from Atlanta’s perspective. The final details on the contract will provide more clarity, but remember: $120.5 million is the most it can be, including unlikely-to-be-earned incentives. Even if Murray hits all of those, his $30 million annual average salary would tie him with Gordon Hayward, Tyler Herro and Chris Paul for 44th in the NBA this season.

Murray earned an All-Star nod in 2020-21 and averaged 20.5 points on a career-high 46.4% shooting, 6.1 assists, 5.3 rebounds, 1.8 three-pointers and 1.5 steals per game last season during his debut campaign with the Hawks. Although the tandem of he and Trae Young didn’t lead the Hawks beyond the first round of the playoffs, Murray averaged 23.0 points on 44.7% shooting, 7.2 rebounds, 6.8 assists, 2.8 triples and 2.0 steals during their first-round loss to the Boston Celtics.

For perspective: Jerami Grant, Jordan Poole, C.J. McCollum, Ben Simmons and Tobias Harris are among the players earning more on an annual basis than Murray will be on his new deal.

In 2024-25, Murray’s $26.9 million maximum starting salary is currently projected to rank 47th leaguewide, right ahead of Utah Jazz forward John Collins. If that figure winds up being agent smoke-and-mirrors—don’t be surprised if his starting salary is $24.8 million and the actual four-year value is $111.1 million (not counting incentives)—Murray would be no higher than 55th leaguewide in starting salary and 47th in average salary.

The contract does include a fourth-year player option, according to Charania, which Murray could decline ahead of the 2027-28 season. Thanks to the new extension rules, he’ll be eligible to sign a new deal that summer with a starting salary of nearly $40.3 million. But if the salary cap goes up 10% every season between now and then, it would be more than $199 million, which means Murray would be eligible for a deal with a starting salary of nearly $70 million (!) if he becomes a free agent instead.

The Hawks can worry about that problem later. For now, they brought back a fringe All-Star/high-level starter at an entirely reasonable price. Spotrac estimates that he’ll never take up more than 17.5% of the Hawks’ cap space in any year of his extension. That’s a far cry from the 30% he could have received as a free agent next summer.

It’s fair to wonder whether there’s another shoe to drop for Atlanta over the coming months. The Hawks will now have five players earning $15 million or more in 2024-25—including Young at $43.0 million—which means they’ll be committing nearly half of their salary-cap space that season just to their starting backcourt. Add in Clint Capela ($22.3 million), De’Andre Hunter ($21.7 million) and Bogdan Bogdanovic ($17.3 million), and the Hawks already have more than $129 million committed to those five alone.

Under the new CBA, the salary cap can’t go up by more than 10% on a year-to-year basis. That means it won’t be higher than roughly $149.6 million in 2024-25. At best, that would leave the Hawks with roughly $20.5 million to round out the rest of their roster, which wouldn’t even cover 10 players on veteran-minimum contracts ($2.2 million each).

The Hawks also have rookie guard Kobe Bufkin under contract for $4.3 million and second-round pick Mouhamed Gueye for $1.9 million in 2024-25, and they have team options on Jalen Johnson ($4.5 million), Usman Garuba ($4.4 million), A.J. Griffin ($3.9 million), TyTy Washington Jr. ($2.4 million), Garrison Matthews ($2.2 million) and Vit Krjeci ($2.0 million). Picking all of those up alone would put the Hawks at $155.5 million, or nearly $6 million over the salary cap.

With both Onyeka Okongwu and Saddiq Bey also eligible for extensions this offseason, the Hawks have some decisions to make at some point. They already salary-dumped John Collins on the Utah Jazz this offseason, getting only a second-round pick, Rudy Gay and a massive trade exception in return. Depending on how much Okongwu and Bey command on new deals, the Hawks could go soaring over the luxury-tax threshold, which can’t be higher than $181.8 million in 2024-25.

The Hawks have 12 months to figure out their financial conundrum, but it seems unlikely that they’ll be able to commit to all seven of Young, Murray, Capela, Hunter, Bogdanovic, Okongwu and Bey. They’ll need to make tough choices at some point, and other teams will be ready to pounce if the Collins trade is any indication.

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.

Source: https://www.forbes.com/sites/bryantoporek/2023/07/07/nbas-new-extension-rules-made-dejounte-murrays-120-million-contract-possible/