Dario Saric's Tricky Contract Situation

Once the news broke that Dario Saric might be unhappy with his situation in Turkey, speculation immediately arose about whether or not it was possible to bring the talented forward over to the NBA earlier than expected.

Saric, who just signed with Anadolu Efes a few days before the 2014 NBA draft, has yet to dress in their first two Turkish League games.

To start this off, this is all extremely premature. First, at this point all that we have is a translation of quotes from his father. Saric and his father have an interesting relationship, alternating between reports of Pedrag Saric being a key decision maker to occasionally being at odds with his son. While it sounds like he is in communication with his son and speaking to his wishes, it would be helpful if we could get quotes from Saric directly.

Second, it's been two games. There are plenty of incentives, including financial, for both sides to work this thing out. That's not saying that Saric isn't frustrated. I'm sure that he is. But if Saric begins to get acclimated to his teammates, begins to see the court, and his playing time steadily increases over the year, this will likely be looked back at as a minor bump in the road. The situation will have to become untenable for the status quo to really change, and thinking that we're there after two non-Euroleague games is a little bit premature.

(Related: part of the issue is the foreign player quota in the Turkish Basketball League, which stipulates that only 6 foreign players can dress for a game. That issue does not exist for Euroleague games, with Efes beginning Euroleague play tonight. It will be interesting to see whether Saric gets any playing time during these games).

That being said, it's worth exploring Dario Saric's contract situation, what the Sixers can and cannot do towards that, and what options he is left with if the situation does continue to worsen and it ultimately becomes an untenable situation for both the team and player.

The first thing that needs to be said is that Dario Saric's contract does not have an out built into it during the first two seasons. Eliot Shorr-Parks did a good job of explaining this yesterday in his piece for NJ.com. There was some speculation around the time of the draft that the contract included an out after 1 season in Turkey, but it does not.

Now, could one be negotiated? Most likely. If the situation becomes absolutely unbearable for both sides, without much hope for improvement in the future, Saric and Efes could likely negotiate a way for him to get out of the contract. But it is not something that currently exists in the framework of the contract, so it is something that Efes is going to have to agree to in order for it to become a reality. In essence, Saric is at the whims of his current team.

And Efes' whims are not likely to see them give him up easily. Saric signed a 4 year contract with Cibona back in 2012, and in order to get him out of this contract Efes had to pay a substantial transfer fee. There are conflicting reports about how much this transfer fee was, with Eurohoops listing it as €1.2 million (paid out as €400k per year), and Sportando reporting it as $1.2 million. While it's nice to see 1.2 million as being consistently reported, there's a considerable (~$335k) difference between the two figures.

(Related: The two sites also disagree considerably on Saric's yearly salary, with Sportando reporting it as €2m per season, and Eurohoops as €2m total over three seasons. A third source told me €1.1m per season. I reached out to Saric's agent so he could clarify these discrepancies, but he declined comment. I have since reached out to others familiar with the situation, and will report back if I can get either the transfer fee or yearly salary clarified).

Even if the transfer fee is the lower $1.2 million, that is a considerable investment that Efes just made in order to get Saric on their team. Not only does it show Efes values Saric on the basketball court, and would have to completely lose hope that they can integrate him into their team, but If they were to allow Saric to negotiate an early buyout they would likely be looking to recoup as much of that as possible.

This puts the Sixers at a considerable disadvantage. NBA rules stipulate that an NBA team can only contribute up to $600k towards a buyout, with the rest having to come from Saric.

One way this can be done is the Sixers essentially giving him a signing bonus as part of his contract. However, since Saric was a first round pick, he's bound by the rookie scale. This limits what the Sixers can do, as they have to pay within 20% (plus or minus) of that slotted rookie salary.

Where that leaves the Sixers is they can essentially hand Saric a contract worth 120% of the rookie scale (the max that they can offer him), but only pay him 80% of that. The rest they can use as what is essentially the equivalent of a signing bonus, shipping it off (along with the $600k allowed by the league) to Efes towards Saric's buyout.

For the 12th pick in the 2014 NBA draft, the NBA slots a first year salary of $1,803,400. 120% of that gives a max that they can allocate towards Saric as $2,164,080, of which Saric must receive $1,442,720 (80% of $1,803,400). This means that the Sixers can give Saric another ~$721k towards a buyout this season. Since signing bonuses are based off of the percentage of guaranteed salary, and first round picks have the first two seasons fully guaranteed, a similar bonus can be done for year two of Saric's contract. Giving the Sixers the ability to contribute $600k towards Saric's buyout, and also allowing Saric to get up to ~$1.5 million of his guaranteed salary up front, which he can use towards the buyout.

So, in theory, the Sixers could work with Saric and Efes to get the upfront money Efes may demand for a buyout, but a very large chunk of that is going to come directly out of Saric's guaranteed salary, greatly limiting his earning potential for his first two seasons in the NBA. With other European teams not limited in what they can contribute towards a transfer fee (and thus not having to limit Saric's salary to do so), it's very likely that Saric would find other, more lucrative, places to play.

There's one final angle to consider. On the first day of the regular season, teams lose the cap hold for any player who has signed a non-NBA contract. However, teams can remove the cap hold from their team salary calculation earlier by signing a letter declaring that the player will not sign an NBA contract for this season. While the Sixers have plenty of cap space, they have made moves in the past that indicates they look to maximize their flexibility. With Saric having signed a long term contract with Efes that included no built-in out for this season, and with a considerable cap hold due to his $1.8 million slotted salary, it's possible that the Sixers submitted such a letter. This letter could prevent Saric from playing in the NBA this season, even if he forces his way off of Efes and becomes available.

Again, all of this is wildly premature, and both sides have huge financial (and basketball) reasons to give this more time and try to work it out. We're only two games into the season, and It's not entirely uncommon for a new player, particularly one as young as Saric, to have his playing time limited while he adapts to a new situation. And it's also not entirely uncommon for a young player, especially one who had just won the MVP of the Adriatic League Final Four and played well in the FIBA world championships, to be unhappy with not playing. This would have to go on for much longer to reach the point where it becomes untenable for both sides.

That being said, if we do reach that point where Saric and Efes begin to explore the possibility of prematurely ending their relationship, all of this leads me to believe that he most likely scenario would be another European team working with Efes for Saric's rights. At best, if Efes and Saric do part ways, perhaps we can hope that wherever he signs next will include an easier out for the Sixers after this season. That, to me, is the best (remotely realistic) outcome.