Jayson Tatum is going to be a Celtic for a very long time. An All-Star third season has only cemented that notion for the 2017 No. 3 overall pick, who still has a year remaining (at $9.89 million) on his rookie deal after this season.
However, Tatum’s emergence towards a star level as a 21-year-old has not only impacted the Celtics’ championship ceiling but what their payroll could look like moving forward. Boston’s front office will have an opportunity to offer Tatum a rookie extension as soon as July 1st and, barring something unforeseen happening, it’s simply a matter of when, not if, that will happen.
Players coming off their rookie deals are normally eligible for up to 25 percent of the salary cap with their next contract, something that the Celtics were already expected to offer happily in the midst of his All-Star turn. However, could Tatum command even more than that number due to the special Rose Rule exception? Let's take a closer look at the criteria he will be facing to reach a higher max salary threshold than 25 percent that was created last decade, along with the domino effect it could ultimately have on the Celtics cap finances.
What is the Rose Rule besides the thing that helped prevent the Celtics deal for Anthony Davis last year with Kyrie Irving already on the roster?
There are actually two specific terms that will come up for a player receiving elite treatment coming off a rookie contract. Let’s go over those two first to avoid any confusion:
Designated Rookie Rule: This is a designation that teams can use to allow them to sign players to a five-year extension with one year still remaining on their rookie contract (i.e. the position Tatum will be in this summer). In order to do this, a team must pay the player at least the max (25 percent of cap as a starting salary) for the length of the deal. If not, teams are limited to just four years with their extension offer before the season.
Rose Rule: The designated rookie rule allows a player to sign with his team for a longer extension (five years). The Rose rule opens the door for a team to pay a player more than the 25 percent max based on whether they reach a certain set of criteria. A player becomes eligible for up to a 30 percent max if they do one of the following things by their fifth NBA season:
--Named to All-NBA team in most recent season or in two of past three seasons
—Named Defensive Player of the Year in most recent season or in two of past three seasons
—Named MVP in any of the past three seasons
How will designated rookie rule impact the Celtics and Tatum?
Danny Ainge has a history of playing it slow with contract extensions and technically he could wait until Tatum’s rookie contract expires (end of 2020-21 season) to sign him to a max five-year deal. However, that means Tatum has to play through a contract year with no long-term security and that’s an end game both sides may not want, given how well Tatum has played. Locking up Tatum for five additional years (six in total) this summer is the expected solution both sides will be looking for. The Celtics could get an extra year locked in (potentially with no player options) and Tatum gets max money and the security any young player would want.
The only limitation for this rule from a team perspective is that any franchise can only have two designated rookies on its roster at a time. Tatum would be the first one on this roster since Kyrie Irving’s departure and no young players on the team still playing under rookie deals project to be close to max players for Boston moving forward so making Tatum a designated rookie wouldn’t inhibit the Celtics for trading for a second designated rookie with another team (i.e. Karl-Anthony Towns) moving forward if the opportunity presented itself.
Is this rule why the Celtics couldn’t trade for Anthony Davis last season?
Yes, since an NBA team is permitted to have just one of their designated rookies acquired via trade. The Celtics acquired Kyrie Irving via trade after he was made a designated rookie in Cleveland, so the Celtics couldn’t acquire Anthony Davis last year (who was also a designated rookie) while Irving was still on that rookie extension deal.
How could Rose Rule impact Tatum’s next deal with the Celtics?
Looking at the criteria, it’s unrealistic to think Tatum could emerge as an MVP or Defensive Player of the Year this season or next season. However, Tatum has played well enough to be considered for All-NBA votes this year and that should continue if he can sustain this type of play for the final two months of the season or for the entire year next season.
If Tatum does get the nod on even the third team All-NBA squad this spring, he can make the case that he is worthy of incentives closer to the 30 percent Rose Rule max this summer, which could cost the Celtics a few million dollars per year in each year of his next deal. If he reaches an All-NBA team next season in the fourth year of his rookie deal, he will be eligible for whatever is written into any extension he signs.
How would the Celtics handle this in negotiations?
The recent trend for All-Star level players negotiating rookie extensions is having these All-NBA thresholds written into the new deals. For instance, Pascal Siakam signed a four-year max contract extension with the Raptors this past fall that is worth 25 percent of the max on the surface. However, if Siakam makes the All-NBA second team this season, his annual salary goes up to 28 percent (with annual raises yearly). Higher thresholds were also included for All NBA first team (29 percent) and MVP (30 percent).
The Celtics could easily do something similar with Tatum, giving him a baseline max of 25 percent and escalating All-NBA bonuses per the Rose rule based on how well he performs next season (the final year of his rookie deal).
So how much of a difference could those raises make for Tatum and the Celtics cap?
Standard five-year max for Jayson Tatum worth $182 million (25 percent of cap)
2021-22: $31.25 million
2022-23: $33.75 million
2023-24: $36.45 million
2024-25: $39.37 million
2025-26: $42.5 million
Rose Rule five-year max for Jayson Tatum worth $220 million (30 percent of cap)
2021-22: $37.5 million
2022-23: $40.5 million
2023-24: $43.74 million
2024-25: $47.2 million
2025-26: $51.02 million
In my opinion, it's highly likely that Tatum’s contract will fall somewhere in between these two numbers (25 percent max and 30 percent max) if he makes All-NBA next season, since the Celtics will have the ability to add incentives if he signs a rookie extension this summer for anywhere between 25-30 percent if he does make an All-NBA team next year.
None of this will impact the length of Tatum’s future in Boston to a large degree. He’s going to be in a Celtics uniform for a long time and the front office will likely try to maximize the length of his next deal (i.e. five years) no matter what the financials are. However, with the luxury tax likely to become a bigger factor for this team beginning next season once Jaylen Brown’s extension kicks in, a bigger extension for Tatum could end up costing the front office some flexibility with cap room beginning in 2021 and ownership millions more when luxury tax costs are factored in if the C's want to keep this core together. Maximizing this season and next before those financial concerns come into play is going to be crucial for this front office since there's obviously a lot more you can do with the rest of the roster when paying Tatum $10 million instead of $30-35 million each season.
The Celtics will be happy to pay the heavier burden for a top-15 player but contract negotiations between the two sides just got a little more interesting this summer because of Tatum's recent play. The Duke product was always going to get a max this summer with a strong year but how much Rose Rule money he gets could depend on how well the next few months go (to give him negotiation leverage) and whether he ends up qualifying for the Rose Rule with an All-NBA selection next season. It's an important storyline to watch amid a terrific bounce-back year for this roster and front office.