It’s a very big day for Sixers fans. James Harden must decide by 5 p.m. EST whether to accept his $47.4M option for the 2022-2023 season or hit unrestricted free agency. We do not anticipate that he’d be a free agent for very long. The good news is that all reports point to a lovefest between Harden and the team. But if he did opt out, it would likely be to allow the team to improve around the margins this offseason.
If Harden opted in, the team would most likely be looking at a Taxpayer’s Mid-level exception, and maybe a veteran’s minimum signing to finalize the roster. There wouldn’t be much room to work with.
But if he opted out and took less money in year one of a three-year framework, for example, the team might be able to limbo below the Luxury Tax apron and unlock a Non-Taxpayer’s Mid-level exception worth around $10.3M.
Of course, when we talk about these figures, we mean “projected figures.” That is also in flux, and apparently there could be even more wiggle room. Per Jake Fischer of B/R:
Word starting to circle around NBA front offices of a potential increase in the 2022-23 salary cap. Multiple teams have indicated the cap could raise as high as 10%, from a projected $122 million.— Jake Fischer (@JakeLFischer) June 29, 2022
Adrian Wojnarowski, appearing on ESPN, spoke about a hypothetical where Harden takes a bit of a pay cut for 2023 to help the Sixers this coming NBA free agency period:
Woj just now on SC. Seems to be leaning more towards the opt out ? pic.twitter.com/xPhQyCOOpx— NBA Clinic ™️ (@NBAclinic) June 29, 2022
Woj spoke hypothetically but makes clear that there seems to be a “playbook” where Harden could opt out:
“[An opt out hypothetically] gives the Sixers a lot more financial flexibility to go and improve this team in the offseason. He can still get long-term guaranteed money, or certainly guaranteed money at a very high number over a couple of years by opting out and it gives the Sixers the ability to add to their roster. They know they have to get better...they’ve talked significantly about this in Philly. He has told them he wants to win, he is committed to winning and I think there’s a playbook here now for the Sixers and James Harden to work together and find a way to get James Harden a new deal in Philly and improve that roster....at the end of the day I think James Harden’s gonna be in Philly, he’s gonna be there on a new deal, and Philly is perhaps gonna have the opportunity then to do some things here in free agency.... ”
So Woj sounds like he’s leaning towards a “new deal,” allowing a bit of wiggle room under the tax apron. And that should be music to Sixers fans ears.
Just so you have a basic understanding of the particulars, if Harden opts in, and waits until a key date in August, he could make a three-year max. That number had come out to around $151M, before the projected cap spike Fischer reported. If he did, that would make signing P.J. Tucker to a $10M deal pretty difficult.
But here’s where it gets tricky. If Harden took about a $10M discount in year one and took let’s say $36.9M for 2023, the team could unlock a larger Mid-level exception and a Bi-Annual exception:
25% Max: $30.9M (5Y/$179.2M or 4Y/$132.9M)— Yossi Gozlan (@YossiGozlan) June 29, 2022
30% Max: $37.1M (5Y/$215.1M or 4Y/$159.4M)
35% Max: $43.3M (5Y/$250.9M or 4Y/$186M)
Non-taxpayer MLE: $10,485,000 (4Y/$45.1M)
Taxpayer MLE: 6,476,000 (3Y/$20.4M)
Room MLE: $5,398,000 (2Y/$11.1M)
Bi-Annual: $4,104,000 (2Y/$8.4M) https://t.co/ZyuIRpl38l
(Of course all of these figures are hypothetical for now.)
That would open up some important roster spots for free agents. But then the most Harden could make on a three-year deal (since teams are capped at offering 8 percent raises annually) comes out to just $120M. So, him taking $10M less in year one leaves him earning more than $30M less over the three-year deal. So you can see why he may not be thrilled to go for that.
But maybe there’s a way both sides can come to terms on a deal that makes everyone happy. Because the incentives certainly are there. That Woj says they’ve talked about this a lot should provide fans with a bit of hope. If Harden opts in, it’ll leave us wondering if they’ve prioritized future flexibility over Joel Embiid’s prime somehow. By keeping him on a three-year deal, they can pursue a max free agent in 2025. If they offered him a four or a five-year deal, they could certainly pay him much less in year one and go “all in for Embiid’s prime,” but then there would be great risk given Harden’s advanced age and declined burst come 2026-2027.
Plenty to mull over but him opting out and restructuring on a three-year framework would make everything easier, and perhaps facilitate the reunion with P.J. Tucker, while doing so in a way they don’t need to salary dump any key role players like Matisse Thybulle.
But after hearing for weeks now that his opt in was basically a forgone conclusion, things have certainly taken a turn in the final hours.