With Arenas Provision In Hand, Can The Bulls Keep Ayo Dosunmu?

Across successive NBA Collective Bargaining Agreements, instruments have been put in place to protect teams against the threat of losing their best young talents to free agency, theoretically correcting a situation brought about by years of travel in the opposite direction.

Where once all free agency was essentially restricted – and thus barely even possible – the growth of the union, the liberation of player movement, the demystification of “loyalty” (particularly when enforced) and the sharp growth of the concept of player power all aggregated to create a new market, one in which players could and did leave the teams they were once told they were on. This became particularly true of the younger types, who had the audacity to actually use the freedom they were given that their forebears never had. And this came to a head way back in the 2003 offseason.

That summer, Golden State Warriors sophomore guard Gilbert Arenas hit free agency. Their second round pick of 2001 had broken out across his first two NBA campaigns and had been an 82-game starter in 2002-03, returning averages of 18.3 points and 6.3 assists per game in an unexpected yet most intriguing breakout. However, due to the specifics of the contract that the Warriors had given him, Arenas hit free agency after two years.

All free agents with three years or less of NBA experience can be made into restricted free agents, whether they like it or not, if their incumbent team extends a qualifying offer. [The sole exception is if a first-rounder had a team option year on his rookie scale contract declined, which did not apply here.] That was true then and is still true today. The Warriors, then, might perhaps have felt safe in the knowledge that even though Arenas could sign big offer sheets with other teams, they in theory had the ability to match them.

However, they did not have that ability in practice. Because Arenas had only been with the team for two years, the Warriors had only early Bird rights on him, and, as an over-the-cap team, they did not have cap space. The restricted free agency instrument did not give them carte blanche to simply match any contract Arenas signed with another team; it merely gave them the right to match any contract Arenas signed with another team, as long as it was one the Warriors were able to give Arenas themselves.

Put simply, then, they could still be outbid. And they were. The Washington Wizards signed Arenas to a six year, $64,020,000 contract that started at $8,536,000 in the first season; by having neither full Bird rights nor cap room, the most that Golden State could offer in that first season was an amount equal to the league’s average salary in the previous season, as was the maximum allowable starting amount for early Bird free agents at that time. That amount was a mere $4,917,000. The Warriors, then, could not match after all.

The entire enterprise was compounded the following year, when Carlos Boozer did essentially the same thing, signing an unmatchable offer sheet with the Utah Jazz that the Cleveland Cavaliers could not match without pulling out some extraordinarily contrived salary dump of Zydrunas Ilgauskas, which they declined to do. In that case, the loss was made worse by the fact that Cleveland had declined Boozer’s team option for the minimum salary, hoping to tie him down long term. Boozer had other ideas and better offers.

The two moves gave rise to what is often referred to colloquially as the Arenas Provision (which could just as easily be called the Boozer Provision, but Arenas got the label for getting there first). Starting with the 2005 CBA, the loophole has been effectively shut, as teams are no longer able to sign other team’s one- or two-year veteran free agents to contracts with cap numbers larger than the value of the full Mid-Level Exception (although the amount of money can be larger, and the cap hit spike in the back end of the deal, via means best explained here). And by and large, that has stopped the already extremely rare practice.

Since the advent of the Arenas Provision, the situation has rarely cropped up again. The provision’s limitations, plus the increased regularity of second-round picks (or coveted undrafted players) receiving three- or four-year contracts through either cap space or portions of the Mid-Level Exception, has meant a pincer movement of less viability and fewer candidates. By way of example, of the second-round picks in the 2001 draft class, only three (Trenton Hassell, Terence Morris and Jamison Brewer) signed three-year deals, as opposed to nearly all of them today.

However, the Arenas provision did crop up one summer in the relatively recent past, when, in the summer of 2012, the Houston Rockets sought to test it with their new contracts for both Omer Asik and Jeremy Lin, who did not sign three-year deals. Similarly, the Toronto Raptors gave Landry Fields an amount in their offer sheet to him that same summer that could have triggered use of the Arenas provision, had the New York Knicks matched it. They did not. In fact, none of the three were matched. And that, then, has been the entirety of the Arenas provision to date.

That is, until next summer, when the Bulls will have to do something with Ayo Dosunmu.

Contrary to the new norm, the Bulls did not give Dosunmu, their 2021 second-round pick, a three year deal. It is unclear from this distance whether this was at the team’s discretion, or Dosunmu’s – the NBPA advises agents to steer clear of three- and four-year contracts to non-first round rookies, yet, as can be seen above, the advice is not often heeded. Nevertheless, whatever the reason, Dosunmu received only two years, and thus is headed to free agency next summer.

While the rules regarding extensions were liberalised in the 2017 CBA – allowing those self-same players who had signed three-year non-rookie scale first contracts the option of extending them and bypassing free agency altogether, further incentivising signing such deals and further diminishing the likelihood of the Arenas provision coming into play – there is still no such mechanism for two-year veterans. Dosunmu is heading to free agency next summer, whether he and the team like it or not. The only way it does not happen is if he is waived before then.

Of course, there is no chance of that happening, because Ayo has become a hugely important player for the Bulls.

Taking advantage of the extended absence of Lonzo Ball, Dosunmu has gone from bench player to key bench player to fill-in starter to important starter over the course of his first season and a quarter. In 19 appearances (all starts) this season, he is averaging 10.6 points, 3.5 rebounds and 3.0 assists per game on 50.4% shooting, numbers which belie the fact that he does his best work on the defensive end, where he has been all over the map.

Far from being on the outs, then, Dosunmu might be in line to be the first player in quite some years to test his team’s resolve when it comes to the Arenas provision.

The new parameters of the post-2005 CBA Arenas provision specifically limit the first year salary of any offer sheet to an eligible player to nothing greater than the full amount of the Non-Taxpayer Mid-Level exception. This limitation means the player’s current team can match the offer sheet by using the Early Bird exception (which as seen in Arenas’s case above has the same starting amount as the MLE), the MLE itself, or an equivalent amount of cap space. Thereafter, the second-year salary is limited to the standard 5% raise.

It is after that that things can get weird. The third-year salary is allowed to be as high as it would have been had the first-year salary not been limited, and salary in the fourth year may increase by up to 4.5% of the third year salary. These big bumps are only possible if the full limited amount is given in the first two years, but if it is, then the huge potential bumps may come into play.

While any team signing Dosunmu to any such backloaded deal must be able fit the average salary for the entirety of the contract under their cap, and not just the MLE-sized first year – so for example, a team that is $17.5 million under the cap is limited to offering a total of $52.5 million over three years, or $70 million over four – this is something that might not be too big of a problem, considering the big salary cap spikes coming up in the near future. That same team with that same hypothetical $17.5 million in 2023/24 cap space could therefore (using a hypothetical Non-Taxpayer MLE amount of $11,368,000, in accordance with the current NBA projection) sign Dosunmu to a deal that works out as:

• 2023/24: $11,368,000
• 2024/25: $11,936,400
• 2025/26: $22,834,034
• 2026/27: $23,861,566

Total: $70 million

Not exact, but highly illustrative.

Bear in mind also that the Bulls would need to be in a position where they are eligible to use the full value of the Non-Taxpayer Mid-Level Exception if they to be able to match it. If they are suitably burdened with payroll that they can only use the Taxpayer version, a Non-Taxpayer MLE offer would outbid them, regardless of Dosunmu’s restricted status.

Note also that the Bulls (or any applicable re-signing team) cannot pre-empt the process by negotiating a beyond-MLE deal with the relevant player and bypassing the offer sheet stage entirely. The Arenas provision and these particular circumstances come about only in an offer sheet scenario. If the Bulls want to re-sign Dosumu without another team’s involvement, they are limited to the full value of the Non-Taxpayer MLE or the early Bird exception, with no big backend jumps.

The 10/5/5 player that Ayo Dosunmu currently is does not likely merit this hypothetical $70 million figure. However, a 15/5/5 with efficiency and defense might. To put it into some context, Derrick White received $70 million across four years in the extension he signed with the San Antonio Spurs back in December 2020, right before the start of a season in which he averaged 11.3 points, 3.5 assists and 3.3 rebounds per game. Whether you would rather have White or Dosunmu on your team, you have to concede that it is close.

Should Dosunmu sign a deal that sees the big back-end jump, one saving grace is that the large contracts of DeMar DeRozan, Lonzo Ball and Nikola Vucevic will all be expired by the time it does so. Those players, though, will have to be replaced with something, particularly offensively, something more than Dosunmu can offer. If you think he can make one or two leaps beyond what he currently is, you might explore paying above MLE value, but if you do so, offensive improvements in all areas will need to be forthcoming.

For the Bulls, if another team does think that Ayo can do that, this presents them with a poser. Floundering in the immediate after their plans to assemble a super team of second-tier stars did not work, they are, or should be, at a crossroads in their roster plan. They need young two-way players like Dosunmu, but they cannot be clogging up their cap for a fourth starter. An O.G. Anunoby-esque curve of development would need to be on the cards, which would be an expensive gamble to take.

Perhaps, then, they should shrink his role and mitigate the risk.