Long or short term: How long will Kyrie Irving commit to Celtics for in next deal?

Kyrie Irving says he plans on remaining a Celtic next summer in what was a very welcome announcement for the organization this week. Danny Ainge sacrificed significant assets for the All-Star last August and was willing to do so under the assumption that the Celtics would be able to retain the point guard through his prime years.

While a verbal commitment has been made by Irving to Boston, nothing is set in stone until next summer. Irving won’t sign any actual extension during this upcoming season since it makes no financial sense for him to do so. Once July 1st hits, Irving will be eligible for a bigger deal, and he’ll presumably sign on the dotted line then. Still, a question remains until that day arrives: How long does Irving plan on committing for? It’s a subject Irving did not want to discuss just yet, due to CBA rules.

“I just have every intention of signing back,” Irving said Friday. “Me and Danny and management have not talked about any numbers, so please do not ask me about it. That goes for anybody, we don’t want any tampering or anything like that. July first, whatever that day is, we’ll talk about contracts and stuff like that.”

Over the course of NBA history, most superstar free agents have opted for long-term security over flexibility and maximizing their earning power. However, there has been a small shift on that front in recent years as a number of top players (LeBron James, Kevin Durant, Paul George) have signed shorter deals than the traditional five-year max contract for a team with Bird Rights. James and Durant have opted for one or two-year deals, while George signed for three years (with a player option) with Oklahoma City last summer.

Those decisions create an interesting backdrop for Irving’s contractual choice this summer. Will he opt to maximize his earnings and maintain some flexibility? Or take the security of a five-year deal that would pay him over $190 million? Let’s take a closer look at his likely options and how those routes could impact the Celtics’ financial flexibility over the next several years.

UNDERSTANDING MAX CONTRACTS

The term ‘max contract’ is thrown out a lot in the NBA, but it doesn’t always mean the same thing. There are several variations of a max deal, dependent on how much experience a player has in the league. For instance, James and George both sides max contracts last summer but James is making $5.1 million more than him this year. Why? James has been in the league for 15 years, putting him on the highest tier for max deals (35 percent of cap). George only has eight years experience, so he’s eligible for 30 percent of the cap.

Max contract breakdowns

1-6 years: 25 percent of cap
7-9 years: 30 percent of cap
10+ years: 35 percent of cap

How does Irving fit into this equation? He’s currently entering his eighth NBA season at age 26 during which he’ll be earning $20.1 million. He’s all but guaranteed to opt out of his $22.1 player option next summer to sign his next deal with Boston.

Based on that experience, he’ll be eligible for 30 percent of the cap for the starting salary in his next deal. The NBA has projected the salary cap at $109 million for next season, which puts Irving’s starting salary at $32.7 million. From there, the Celtics can offer him a maximum of eight percent raises for every year of his deal, for a maximum of five years. Here’s a look at the structure of that deal, with the assumption that a fifth year is a player option for Irving.

Option A: Re-signs full five-year deal at 30 percent max

2019-20: $32.7 million (Age 27/9 years of experience)
2020-21: $35.32 million (Age 28/10 years of experience)
2021-22: $38.14 million (Age 29/11 years of experience)
2022-23: $41.19 million (Age 30/12 years of experience)
2023-24: $44.49 million (Age 31/13 years of experience)

Total: $191.8 million over five years

Overview: That’s quite a healthy chunk of change, so why would Irving (or anyone) turn down that type of money and security if it’s offered? It would likely come to maximizing earning potential and flexibility. Taking a five-year deal at the 30 percent max eliminates two years during which Irving could be earning 35 percent of the cap (starting in 2021) due to accumulating 10 years of experience. The most likely alternative for Irving to address those concerns would be signing a three-year deal with the Celtics this summer that includes a player option.

That type of contract structure would allow Irving to hit the free agent market again in the summer of 2021, the first year he’s eligible for the 35 percent max. There is no official estimate from the league for the salary cap in 2020-21 just yet, but a conservative guess would put it at $122 million, which would mean Irving’s starting salary in 2021-22 could be $42.7 million. Let’s look at what Irving’s earnings would look like if he opts for this route and signs on for five more years in 2021.

Option B: Signs two-year deal at 30 percent max with a player option, then re-signs in 2021 at 35 percent max (10+ years of experience)

2019-20: $32.7 million (Age 27/9 years of experience).
2020-21: $35.32 million (Age 28/10 years of experience)
2021-22: $42.7 million (Age 29/11 years of experience)
2022-23: $46.11 million (Age 30/12 years of experience)
2023-24: $49.8 million (Age 31/13 years of experience)
2024-25: $53.78 million (Age 32/14 years of experience)
2025-26: $58.09 million (Age 33/15 years of experience)

Total: $206.63 million over five years, $318.5 million over seven years

COMPARING THE DEALS 

On the surface, there’s not a huge difference. Irving would earn roughly $15 million more across 2019-2024 by opting for a short-term deal and a new contract in 2021. The bigger difference for Irving lies in the years that comes afterward. A five-year max in 2021 would have him earning a combined $111 million in 2024-26, an average of $55 million per season. That’s a huge number for a player at the tail end of his prime, and it’s a figure he probably won’t be able to get if he hits the open market at age 32 (which would happen if he signs a five-year deal).

Still, that’s not to say opting for a shorter term deal now wouldn’t carry a lot of risk for a player that has managed to play 60 or fewer games in half of his NBA seasons to date. Irving has been injury-prone throughout his career, and despite having the hardware removed from his surgically repaired kneecap, he’s still susceptible to knee arthritis over the long-term, according to our medical expert Dr. Flynn. Counting on staying good enough and healthy enough through 2021 to earn another five-year max deal would certainly be a roll of the dice for the point guard.

The possibility remains that Irving could want some flexibility with his future as well, similar to Durant and James in recent years. Irving is not on their levels from a talent standpoint, but he’s at a tier where he’s a top-15 player in the league, and those guys get max contracts in their primes (when healthy).

WHAT SHOULD CELTICS WANT IRVING TO GO FOR?

For a team that is dead set on contending over the next decade, locking in Irving for as many years as they can is the preferred play. Danny Ainge won’t have significant salary cap room for the foreseeable future, assuming the likes of Jayson Tatum, Jaylen Brown, Al Horford and company are locked up for long-term deals. Seeing that, eliminating any kind of flight risk for Irving for as long of a window as possible is the wise play, despite his injury risks. Additionally, any kind of jump in salary for Irving over the next decade will likely cost C’s ownership tens of millions more due to the fact the repeater tax will be looming for 2021 and beyond. Any dollar the team spends over the tax in those years will result in at least triple that amount due to tax penalties.

Any true benefit that the Celtics could gain with Irving opting for a shorter deal (i.e. protection against injury) would likely be negated as well since Irving would have a player option for year three in such a scenario. Irving’s injury risks are real, but it’s part of the package for the player.

WHAT WILL IRVING OPT FOR?

While Irving may be fond of flexibility down the line, it’s going to be hard for him to turn down a guaranteed $45 million salary at age 31 with his injury history. One league source told Bostonsportsjournal.com that he doubts Irving would turn down a five-year pact given Boston’s promising outlook and the fact that the risks may outweigh the rewards of a shorter term pact.

Barring a catastrophic injury this season, the Celtics will be ready to go all-in with the point guard in his prime. Time will tell whether Irving will return the favor.