The Sixers, The Arenas Provision And You

The Sixers' financial flexibility is no longer the level of asset it was in previous years, now that just about every team in the NBA has room under the new $94 million cap. But still with far more of it than anyone else in the NBA, it's a tool they have the freedom to utilize in all sorts of ways.

One of those ways is naturally through restricted free agency, where players of four years of experience or less are obviously more likely to fit the team's timeline of competitiveness. The Harrisons Barneses, Evan Fourniers and Allen Crabbes of the world are surely going to see paydays a little too large for comfort at first. But within that market of restricted free agents are players who could fit the team's timeline even better: Free agents with one or two seasons of experience in the league (typically former second-round picks), who are subject to the "Gilbert Arenas" provision.

The Arenas provision exists to make life easier for teams to retain their young players by limiting the amount other teams can offer them in the short-term. I'll let the invaluable Larry Coon take it away:

Teams are now limited in the salary they can offer in an offer sheet to a restricted free agent with one or two years in the league. The first-year salary in the offer sheet cannot be greater than the Non-Taxpayer Mid-Level exception (see question number25). Limiting the first-year salary in this way enables the player's original team to match the offer sheet by using the Early Bird exception (if applicable -- see question number 25), or Non-Taxpayer Mid-Level exception (provided they have it and haven't used it already)¹.

The second-year salary in such an offer sheet is limited to the standard 4.5% raise. The third-year salary can jump considerably -- it is allowed to be as high as it would have been had the first-year salary not been limited by this rule to the Non-Taxpayer Mid-Level exception². The salary in the fourth season may increase (or decrease) by up to 4.1% of the salary in the third season. The offer sheet can only contain the large jump in the third season if it provides the highest salary allowed in the first two seasons, it is fully guaranteed, and it contains no bonuses of any kind.

So, to summarize: The first-year salary can't exceed the mid-level exception (about $5.6 million for this season) and the second season can't exceed the maximum 4.5 percent annual raise allowed to most free agents signing with teams that don't already hold that player's Bird rights. But the third and potentially even fourth season is where there's the most wiggle room - this is why it's often called the "poison pill" contract. As Coon notes, that third-year salary can essentially go as high as that player's maximum salary would be. According to Resident Twitter Cap Expert Jacob Rosen's estimates, that'd be about $24.1 million (and about $25.1 million if the Sixers or any other team offers a fourth year).

Bare in mind that it doesn't have to be a maximum offer on the back-end, either. Daryl Morey showed in his poison pill offers to Omer Asik in Chicago and Jeremy Lin in New York, you can really make life hell for opposing general managers with lower numbers too, especially when the most competitive teams are set to often have lots of money tied up 2-3 years down the road. The Knicks had $60+ million on the books in future years when the Rockets made the offer to Lin. It's no wonder they chose not to match on one of their role players.

Anyway, back to the Sixers. This is a topic of conversation because three interesting guards (two realistically gettable ones in particular) are Arenas players on the RFA market this summer: Jordan Clarkson, Langston Galloway and Tyler Johnson. Remember guards, everyone? They're a thing.

Clarkson is probably a lock to get a five-year max deal from the Lakers, and I'm sure they'd laugh in his face if he chose to pursue one of these types of deals with another team, because he'd save the Lakers (and lose himself) about $30 million while they match anyway. Barring a major swing, it's not happening with him.

But Galloway and Johnson are both really nice players who are almost definitely of some interest to the Sixers.

Let's start with Galloway. Much has been made of Philly's need to re-check its priorities when looking for guards - even with Simmons likely to start the season at the four, he's still going to be one of the team's primary creators, and will be handling the rock extensively. Pat Beverley has been the popular archetype for what the team needs, a guard who can stroke it from deep at a high clip, defend his ass off at the point of attack and only create for others on a pretty limited basis. Well, this is the style of player Galloway is, albeit on a lower level. He still leaves some room to be desired from long range as a 34.8 percent career three-point shooter, but he does defend at a high level. He really works on that end, has a solid nose for the ball and will force some turnovers (1.4 steals per 36).

Given that the Knicks dumped Calderon and Grant and that their starting point guard is made of glass, it'll be interesting to see what kind of price it'll take to scare them off. But Galloway played four years at St. Joe's and there's a massive crater on the roster that his skill-set would fit perfectly.

Johnson's situation will be one of the more fascinating storylines to watch when the clock strikes midnight. Miami will surely be fighting to keep Hassan Whiteside, and with a meeting with Kevin Durant set plus Dwyane Wade and Luol Deng hitting the market, their hands are going to be full.

Johnson's a 2/1 guard out of Fresno State who just finished his second season with the Heat. He's shot it from deep at a 37.8 percent clip thus far for his career as well as over 39 percent on catch-and-shoot treys this season. He's a good athlete, can handle the ball and create off-the-dribble some too. He's a pretty textbook fit even if he'll hurt you on the defensive end sometimes, and looks like a player who could blossom playing in a bigger role. Here's the catch, because there always is one: he's played just 68 games in two seasons, battling nagging shoulder troubles. He did return from surgery in time to compete in the playoffs this season though, which was good to see.

So, the Sixers could offer either of these guys (and Clarkson, if they want to do LA a favor, which I'm sure they don't) a deal at most in the neighborhood of four years and just over $60 million.

Ouch, right? It's a tough financial pill to swallow, but one of the beauties of the Arenas provision is that for the offering team, even if a team like the Sixers is paying someone the mid-level in Year One and $24 million in Year Three, the cap number each season is only the average annual value. For a 4/60 type deal, the cap number would be about $15 million per year on the books, which is not far off from what the market value will be for a decent starter under the new cap. So, the offering team gets steady, even cap hits as the rising cap eventually normalizes. That team is also making a bet on the player developing into a starter-level talent over the course of the contract.

Circumstances will be different for the Knicks or the Heat if they choose to match these offers, however. They won't get steady, normalized cap hits - for matching teams, the cap numbers are exactly what the player is making each year instead, which comes with its own set of advantages and disadvantages. Maybe they'll want no part of a long-term, soon-to-be expensive commitment to a role player they aren't totally in love with. Or maybe they'll love the short-term flexibility they get from paying their backup guard the mid-level for the next two seasons, while maintaining short-term flexibility for the free agent bonanza the next two summers. To each his own.

For the Sixers specifically, while they'll also certainly be looking to fill out the roster with some veteran talent, younger players like these who fit the timeline of what they're building are going to be attractive, too. If they really covet one of them, they could take a gamble. They have plenty of flexibility to do so, and at worst, they'll just be driving up prices of rival teams' players.

Tyler Johnson max contracts! This next week is going to be insane.