How the Sixers can get the non-taxpayer MLE after James Harden opted out

Philadelphia 76ers guard James Harden officially declined his $47.4 million player option for the 2022-23 season on Wednesday, a source confirmed to Liberty Ballers. Shams Charania of The Athletic was the first to report the news. Harden is now set to become an unrestricted free agent at 6 p.m. ET on Thursday, June 30, although his return to the Sixers appears all but preordained.

“As you guys have heard, it’s a mutual lovefest, so we feel like we’ll work it out,” team president Daryl Morey told reporters after the 2022 NBA draft last week.

Harden is eligible to receive up to $46.5 million as his starting salary on a new contract from either the Sixers or another team. He can sign up to a five-year, $269.9 million deal with the Sixers or a four-year, $200.1 million deal with another team, although he “intends to return on a contract in free agency that gives the team financial flexibility to bolster the roster,” according to Charania.

The structure of Harden’s contract will go a long way toward determining how much more salary the Sixers need to shed before they gain access to the non-taxpayer mid-level exception, which they’re reportedly hoping to use on Miami Heat forward P.J. Tucker, according to Keith Pompey of the Philadelphia Inquirer.

“Numerous rival teams… expect P.J. Tucker to land in Philadelphia on a three-year, $30 million deal in free agency,” NBA reporter Marc Stein added Sunday. “If Pat Riley’s Heat can find a way now to re-sign Tucker, they will definitely surprise some people.”

The salary cap is projected to come in at roughly $123.6 million, according to ESPN’s Tim Bontemps. Keith Smith of Spotrac projects the luxury-tax threshold to land at nearly $150.3 million. Based on those projections, the luxury-tax apron should land just south of $157.0 million.

Teams that use the non-taxpayer MLE (projected to be nearly $10.5 million), the bi-annual exception (projected to be $4.1 million) or receive a player in a sign-and-trade are not allowed to cross the apron at any point in that league year. If Harden earns his maximum $46.5 million salary next season, the Sixers would have $150.8 million on their books with 13 players under contract. They’d be nearly $4.4 million over the apron if they spent their full non-taxpayer MLE and left their 15th roster spot open.

If the Sixers fill out that 15th roster spot with someone on a minimum contract, it would cost them $1.0 million to sign an undrafted free agent, $1.6 million to sign someone with one year of NBA experience and $1.8 million to sign someone with two or more years of NBA experience. However, the apron calculation uses the two-year minimum salary even for players with zero or one year of NBA experience. That means the Sixers would be $6.2 million above the apron if they signed anyone to a minimum deal for their 15th roster spot, which is the amount they’d have to shed to spend the full non-taxpayer MLE.

Sources familiar with the Sixers’ approach have repeatedly made clear that they do not plan to salary-dump rotation players strictly for the purposes of gaining access to the non-taxpayer MLE. That means they’ll have to create room under the apron another way, whether it’s Harden taking exactly that amount less than his max or him taking a slight discount and them trading rotation players for future draft capital.

The Sixers don’t have to spend the full non-taxpayer MLE to offer Tucker a three-year, $30 million contract, either. If they gave Tucker a starting salary of $9,525,000 with the maximum 5 percent annual raises, that would get them to a three-year deal worth $30,003,750. (The bare minimum they could offer to get him over the $30 million mark is $9,523,810.) While an $1 million difference might not sound like much, every dollar counts when you’re bumping up against the apron.

If Harden took his $46.5 million max and the Sixers hoped to use both the non-taxpayer MLE and the bi-annual exception, they’d need to clear $8.2 million of salary. If Harden isn’t willing to give up that $8.2 million on his own, the Sixers could free up $3.2 million by salary-dumping Korkmaz onto a team with cap space and replacing him with someone on a minimum contract.

In that scenario, Harden could take no more than roughly $41.2 million next season, which is more than $5 million less than his maximum salary. A three-year deal with standard 8 percent annual raises would come in at $133.6 million, which is roughly $17.1 million less than his maximum deal over that span.

It seems as though the Sixers may not even have to dump Korkmaz, though. ESPN’s Brian Windhorst reported that Harden is willing to take a starting salary in the “mid-30s” (h/t Derek Bodner of the Daily Six Newsletter), which would single-handedly push them far enough below the apron to use both the non-taxpayer MLE and bi-annual exception.

If the Sixers don’t make any other changes to their roster and hope to use both exceptions, Harden can earn no more than roughly $38.1 million. If he winds up taking even less than that, it would give the Sixers some additional breathing room below the apron for any in-season moves they need to make.

Given the steady drumbeat of reports linking the Sixers with Tucker, they must already have an idea of how to create enough wiggle room under the apron to gain access to the non-taxpayer MLE and/or the bi-annual exception. We’ll find out what Morey has up his sleeve soon enough.

Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac or RealGM.