All the way back on the opening day of free agency, we heard how the Sixers had started discussions with agent Rich Paul on a contract extension for Ben Simmons. Days later, Philadelphia had reportedly offered the max extension and the two sides were working out the details. After a couple weeks, Monday brought the news of a finalized agreement. Then, yesterday, we learned the full extent of what exactly had been ironed out during the two-week interim. There was no player option, but a 15 percent trade kicker, and more interesting, additional incentive tiers to the contract, as laid out by ESPN’s Bobby Marks.
Here is the complete breakdown on the five-year rookie max extension for Ben Simmons:— Bobby Marks (@BobbyMarks42) July 17, 2019
All-NBA 1st team: $203.6M
All-NBA 2nd team: $196.8M
All-NBA 3rd team: $190M
No All-NBA: $169.7M
As @wojespn reported the contract has a 15% trade bonus and does not have a player option.
Simmons’ max extension had to start at 25 percent of the cap under the Designated Rookie rule (the $169.7 million figure), but was allowed to go up to 30 percent of the cap under the 5th-year, 30% max criteria. Rather than using a flat, all-or-nothing All-NBA criteria, the Sixers and Simmons’ camp agreed to tiers, where his performance for the 2019-20 season would earn Simmons 28 percent of the cap for third-team, 29 percent for second-team, and the full 30 percent for first-team All-NBA.
While we can debate the validity of having media members play a role in determining a player’s salary, incentives are now in place for Simmons to do everything possible to have a big season. First-team All-NBA would obviously be a huge leap, but third-team feels realistic for someone who made the All-Star team in his second professional season on the court last year.
Now, Ben has over $20 million on the line for making that step up to third-team All-NBA. No wonder he’s not playing in the FIBA World Cup. That sort of money would be enough to trump national pride for nearly anyone.
Simmons is no stranger to this sort of incentive structure. He is currently in the middle of a 5-year, $20 million guaranteed shoe contract with Nike, signed on June 6, 2016. Per USA Today, that deal also includes bonuses that could send it above $40 million. Portions of those bonuses, All-Rookie team and Rookie of the Year, Simmons has already hit, while items such as first-team All-NBA and MVP are still out there for Ben to strive to achieve. Simmons is a guy used to betting on himself; he’ll just be doing so in an even bigger way this season.
From the Sixers’ perspective, they know that if Simmons does make third-team (or better) this year, it probably means the team is in the midst of a very good season and they’ll be in no position to complain. If Simmons fails to earn an All-NBA designation, that $170 million will still look like an underpay, as clearly laid out by The Athletic’s Derek Bodner. The Sixers bought themselves some additional financial flexibility moving forward by structuring the contract in tiers like they did, rather than going with the full 30 percent of the cap for any All-NBA designation. That negotiation could mean the difference in a couple extra million dollars each year.
We saw similar forward-thinking cap shaving moves in the other contracts Philadelphia doled out this offseason to Tobias Harris and Al Horford. Harris took around $10 million less than his max contract, but the deal has him set to receive what his max would have been in year one, followed by smaller raises than the 8 percent max raise each year going forward. Meanwhile, Horford will make $28 million this season, with $500k step-downs over the next couple years.
With Simmons in the last year of his rookie deal, the Sixers recognized they could front-load those other contracts as much as possible, while still making the other necessary moves to round out the roster. Philadelphia will almost certainly be in the luxury tax beginning in the 2020-21 season (the tax for that season is set at $143 million), but all of these moves made in conjunction could help the team remain below the apron.
Staying below the apron would allow the Sixers to use the higher non-taxpayer’s mid-level exception, have the bi-annual exception at their disposal, and participate in sign-and-trades. With the core of the roster now in place long-term, having those mechanisms available in the future could make a big difference when you’re talking about the slimmest of margins in postseason competition.
Once again, the Sixers overhauled their roster in a big way this summer. With the league more wide open than ever, Philadelphia is rightfully all-in this season, but Elton Brand and the rest of the front office have done a good balancing act in also retaining what limited financial flexibility they could in years to come.