76ers, Jrue Holiday reportedly working on contract extension

Word coming out of 76ers camp, following a report by Marc Stein of ESPN, is that the team is in talks with fourth year point guard Jrue Holiday on an extension. While a deal is not finalized, the two sides appear to be pretty far along in the talks. They would have until October 31st to come to an agreement.

With the new CBA, the maximum Holiday can get on an extension this fall would be 25% of the salary cap. This is the maximum a player with 0-6 years of experience in the league can command, and would be roughly $13.6 million. The maximum salary for players with 7-9 years of experience would be 30% of the cap, and for players with 10+ million it would be 35% of the cap.

It is possible for a player with 0-6 years of experience to get the 30% of the salary cap available to players with 7-9 years of experience, but that player would have to have won an MVP award, been named to an All-NBA team twice, or been voted as an All-Star starter twice, none of which Jrue Holiday has accomplished.

Holiday can then receive annual raises each year of up to 7.5% of the salary of the first year of the new contract. The contract would be limited to either a 4 or 5 year extension beyond the 1 year remaining on his current deal. In order to make it a 5 year extension, they would have to use the "designated player" exception on Holiday. A team can only have one player they have used the designated player exception with on the roster at any time. In order to use the designated player exception again, Holiday would have to be moved or signed to a new contract. They can also only have one player on their roster whom they trade for who has had a designated player exception used on them by a previous team.

In short, if they use the designated player exception on Jrue Holiday to give him a five year extension, they can only offer Evan Turner a four year extension, unless they move Holiday.

Holiday had been reportedly been seeking a maximum salary contract earlier this offseason. It would be unlikely for the 76ers to agree to that at this time when they will have the right of first refusal for him next offseason.

If the extension is not completed by October 31st, Holiday will then become a restricted free agent next offseason, assuming the 76ers offer him a qualifying offer. He will then have a cap hold of 250% of his 4th year contract, which would be a cap hit of approximately $6.7 million until Holiday is either re-signed or his bird rights are renounced.