Try to Remain Calm

Posted by Rob Mahoney on May 22, 2010 under Commentary, News | 3 Comments to Read

Marc Stein dropped the biggest bomb of the Mavs’ off-season thus far: barring a rapid advancement in the negotiations between Dirk Nowtizki and the Mavs over a possible extension, Dirk is expected to opt-out of the final year of his contract and become an unrestricted free agent this summer.

I know what it sounds like, but relax and take deep breaths. Dirk becoming an unrestricted free agent opens the door for a potential disaster this summer, but it’s far, far more likely that Nowitzki will remain a Maverick in 2010-2011 and beyond. The real motivations for Nowitzki’s potential opt-out are not to test the free agent waters or flirt with other teams around the league, but rather because of two potential economic benefits (as outlined by Stein) that Dirk can only access by signing a new deal this summer:

Opting out to sign a new deal, for starters, would lock in terms based on the NBA’s current collective bargaining agreement through the life of the next contract. Under the league’s current system, Nowitzki is eligible for a four-year maximum contract from Dallas worth $96.2 million once he opts out. The most he could receive from another team is a four-year deal worth $93.1 million.

Signing a three-year extension to the last remaining season on his current contract, by contrast, would expose Nowitzki to potential after-the-fact reductions to his annual wage if league owners are successful in their attempts to lower the value of maximum salaries in the next collective bargaining agreement.

…Another motivation for Nowitzki to opt out as opposed to signing an extension is the ability to secure a no-trade clause in a new contract.

Only players with at least eight years of NBA service time and four seasons with the same team are eligible to have a no-trade clause in their contracts, but such clauses can only be added to new deals. NBA rules prevent major changes, such as adding a no-trade clause, to an existing contract or an extension to a contract, which is largely why Bryant possesses the league’s only active no-trade clause.

You can’t blame Nowitzki for wanting either of those things. It’s not necessarily selfish to act in one’s best interest, and in this case that’s exactly what Dirk is doing. By signing a new deal now, Dirk will lock himself into a more lucrative long-term contract than is likely to be allowed under the new CBA next season. It’s a no-brainer for him, and the possibility of adding a no-trade clause gives Dirk personal protection from being traded to an uncompetitive team in the future. This is how NBA players should protect themselves, and you can’t blame Nowitzki for doing just that.

Coincidentally, the move would actually help out the Mavs in ’10-’11 should Nowitzki choose to re-sign. As a player who’s been in the league 10+ seasons, the maximum salary Dirk could make in the first season of a new contract is equal to 35% of the salary cap, 105% of his previous salary, or $14 million, whichever is higher. Should Dirk re-sign with the Mavs on a new deal, his salary for next season would actually be just $20.8 million (105% of his previous salary), a bit less than his ’10-11 salary had he not opted out ($21.5 million). That’s only if Nowitzki pushes the Mavs to the max possible deal, which may not be the case. Dirk has already stated that he’s willing to opt-out and re-sign for a lower salary if it could help the team improve, and we could see Nowitzki sign for a sub-max contract this summer even if he’s worth max money.

That’s not going to clear any cap space for a team that will be well into luxury tax territory, but it does ease the burden on Mark Cuban’s wallet a bit. You’re looking at double the savings for Cuban and the Mavs next season after tax implications, which is a nice bit of financial relief for an owner already dishing some major shekels to keep the team competitive.

While there are plenty of teams around the league that would be interested in hiring Nowitzki at a competitive salary, this is a situation in which loyalty, personal relationships, and history all come into play, and Dirk’s long-term relationships with Nelson, Cuban, and the Mavs will certainly affect his decision this summer. On top of that, Dallas will likely field the most competitive roster among Dirk’s potential suitors, another factor which would give the home team the edge in contract negotiations.

This is a good thing, for both Dirk and the Mavs. Don’t neglect the possibility of the bottom falling out in this team, but signs from Donnie Nelson, Mark Cuban, Rick Carlisle, other GMs and coaches around the league, and Nowitzki himself all point to Dirk’s return. In all likelihood, Dirk will be a Mav next season, and the implications of his opt-out will only affect his and the team’s finances.

  • Sam

    When I heard this news I thought Nowitzki might be taking a pay cut to try and convince Lebron to come to Dallas, but maybe that’s ridiculous

  • Brendan K.

    Doom I cry! DOOOOOOOMMM!!!!

  • Kevin

    Isn’t he eligible for a 6 year deal?