Pros and cons
Examining Russell Westbrook, Designated Veteran Player Exception entering free agency
Russell Westbrook is eligible to sign a contract extension which could keep him in OKC through his prime.
Hours before the start of NBA free agency, the Thunder’s biggest concern is Russell Westbrook ... who isn’t a free agent.
When free agency begins at 11 p.m. on Friday, the Thunder will attempt to lock in its MVP. Westbrook is eligible for a monster contract which could significantly alter the team’s future monetarily and in terms of perception.
Here are some of the need-to-know details of Westbrook’s potential extension:
How long can he sign for?
Since Westbrook earned All-NBA honors last season, he’s eligible to sign a Designated Veteran Player Exception, which would add five years to his existing deal, placing him under contract with the Thunder for a total of six years guaranteed. In the process, it would wipe out his player option year in 2018-19 and the new five-year extension would begin that season.
Westbrook would still be under contract for $28.5 million in 2017-18, the final year of the two-year extension he signed with the Thunder Aug. 4, 2016.
How much can he make?
With the new salary cap projection of $102 million in 2018-19, Westbrook’s contract extension (should he agree to the maximum salary with the Thunder) will amount to around $207 million over five years. When it was first reported that the DPE would be included in the new Collective Bargaining Agreement, the projected salary cap was higher, therefore Westbrook was originally tabbed to make $219 million over five years.
The DPE makes Westbrook eligible to earn as much as 35 percent of the Thunder’s salary cap in the first year of the deal, with 8-percent raises each following season. So, his year-to-year salary should he sign for the maximum amount of money and years would project like this:
2018-19: $35.7 million 2019-20: $38.5 million 2020-21: $41.4 million 2021-22: $44.2 million 2022-23: $47.1 million
League revenue for this upcoming season will determine the salary cap for the next season, so Westbrook’s projected first-year salary is subject to change. Westbrook could also conceivably take less money, anywhere from 30 percent to 35 percent of the cap, which would change the total.
What advantage does the Thunder have over other teams in signing Westbrook?
The Thunder can exceed the salary cap to sign Westbrook since it owns his Bird Rights (he’s never left the Thunder as a free agent or been on waivers). Also, the Designated
Veteran Player Exception was created with players like Westbrook in mind, to make it easier for clubs to retain their stars. Since Westbrook hit the criteria to trigger the DPE option, the Thunder can offer him five years at the estimated $207 million. If he were to sign elsewhere as a free agent in 2018, other teams could only offer a maximum of four years and an estimated $160 million.
Why would Westbrook wait to sign until 2018?
Westbrook would wait if he’s unsure about committing to the Thunder long-term. He’s given no indication that he wants to play elsewhere, but there’s a question of if the Thunder will be able to build a viable championship contender around him while he’s in his prime. He could apply urgency to the Thunder to make significant change if he elects not to sign.
Westbrook can still sign the same five-year DPE with the Thunder next summer as a free agent, but if he signs it as a new contract and not an extension he would be able to negotiate a no-trade clause. League rules state players cannot negotiate no-trade clauses into an extension.
Also, Westbrook could make the same $200 million-plus with a new team if he were traded this season. The team acquiring him would own his Bird Rights and he’d have the necessary 10 years of service to qualify for 35 percent of the salary cap as a free agent in 2018.
Westbrook could also opt to sign a shorter extension — a two-year deal with a player option for a third year like one he signed last summer — to give himself a combination of financial security and flexibility should he want to play elsewhere.
Why would Westbrook sign now?
Westbrook will still be paid $28.5 million this season no matter what. The money will be no different if he signs the DPE with the Thunder now as opposed to the summer of 2018.
Signing the DPE now, however, would give Westbrook long-term security a year earlier in the event of injury. Despite his incredible athleticism, Westbrook turns 29 in November and has three knee surgeries on his resume. The Thunder believes Westbrook is getting better, and there’s no dispute he has in each season, but a player’s peak years in the NBA typically come in his mid-to-late 20s. Westbrook’s athleticism separates him from those at his position and is a critical tool to his style of play.
Signing now would send a message to players around the league that Westbrook is committed to staying in Oklahoma City. The Thunder doesn’t have a history of signing marquee free agents partly because it cultivated stars from within. But the likelihood of free agents wanting to come to Oklahoma City, or acquired players wanting to stay, increases if another star is committed to sticking around. That star is Westbrook.
The Thunder is already at $111 million in salary, over the projected $99 million salary cap, but it will still talk to potential targets come Saturday when free agency opens. Westbrook agreeing to resign early would give the Thunder a definitive selling point to free agents: Team up with the MVP. He’s not going anywhere.