The summer of 2019 featured rapid roster turnover across the NBA as players switched teams via free agency and trades. In the middle of all those transactions, front offices showed off their creativity when structuring contracts.
We saw the Brooklyn Nets' Kevin Durant and Kyrie Irving make a rare move for superstars by having their contracts laden with incentives. The Houston Rockets' Eric Gordon signed an extension that becomes fully guaranteed for $21 million in the final year of the deal if the team wins an NBA championship.
Here's our look at the new bonuses to monitor this season, teams with luxury tax concerns and potential supermax deals at stake.
The new bonuses
Kyrie Irving and Kevin Durant | Brooklyn Nets
Because there was not a sign-and-trade agreement in place for D'Angelo Russell when Brooklyn's new stars committed on July 30, Irving and Durant at first were set to have $4-5 million in unlikely bonuses in their contracts. That extra $10 million -- generated because unlikely bonuses don't count toward the salary cap -- would have allowed the team to sign Irving and Durant outright and use the remaining room on free agent DeAndre Jordan and second-round pick Nicolas Claxton.
However, both players caught a financial break when Golden State approached Brooklyn later that night about the possibility of acquiring Russell in a sign-and-trade for Durant. Because cap space was not required to sign Durant, Brooklyn needed to structure only $1 million in unlikely bonuses for Irving to still have room for Jordan and Claxton. In total, Durant and Irving could have opened the door to losing a combined $16 million had the Warriors not stepped in at the last minute.
The $1 million in unlikely incentives for Irving is broken into eight $125,000 bonuses, ranging from games played, statistical benchmarks and offensive/defensive rating. All eight are deemed unlikely for cap purposes since they weren't achieved in 2018-19.
Durant still has a $1 million bonus based on the success of the team -- even if he doesn't play this season. If the Nets reach the first round of the playoffs or win at least 43 games, Durant fulfills the criterion.
Nene Hilario | Houston Rockets
Editor's note: The NBA has ruled Nene's contract as valid -- the $7.4M of "likely" bonuses will remain. But for trade purposes, the contract will only count as $2.56M toward incoming and outgoing salary.
Although Nene signed with the Houston Rockets on Sept. 6, the NBA has yet to officially approve the deal. The 10-day delay is a result of the NBA discussing internally whether it should disapprove details in the contract, according to multiple sources. Despite the contract technically falling within the limits of the collective bargaining agreement, the NBA is allowed to interpret the agreement as a violation of the spirit of the rules.
Here's why: Nene's contract includes more than $7 million in bonuses that have been deemed likely for cap purposes, the largest amount in NBA history. However, it's extremely unlikely he'll hit those criteria this season, at least with the Rockets.
Nene was signed as a trade chip. Houston offered a two-year, $20 million contract structured in two phases: $2.56 million of guaranteed base compensation and $7.44 million in these bonuses:
$2.4 million for playing at least 10 games and the team winning at least 52 games
$2.5 million for playing at least 25 games and the team winning at least 52 games
$2.5 million for playing at least 40 games and the team winning at least 52 games
Those games played stipulations are key. Because Nene played in 42 games in 2018-19 and the Rockets won 53 games, the bonuses are considered likely and are allowed to reach $7 million plus. If the bonuses were deemed unlikely, they would be capped at 15% of the Nene's base salary.
Starting on Jan. 15, Nene's full $10 million cap hit can be used as outgoing salary in a trade, while his contract would count as $2.56 million in incoming salary -- if the team trading for him did not win 52 games during the 2018-19 season and Nene hadn't met any of the games-played criteria.
Here's an example of how Houston could take advantage: The Rockets could sign free agent Iman Shumpert to a similar contract and package him with Nene, creating enough matching salary to acquire the Memphis Grizzlies' Andre Iguodala (or a different player whose salary falls within 125% of $20 million).
Because only $4.9 million for both players is guaranteed -- and not the $15 million in bonuses -- the receiving team would gain significant savings, with Houston likely throwing in a draft asset to complete the deal. The Rockets still have first-rounders in 2020 and 2022 as well as second-rounders in 2021 and 2023 available to move.
Even with these bonuses officially deemed likely, the NBA could determine that the contract is comparable to a player with a $2.6 million guaranteed deal so only the $2.6 million should count as outgoing salary. But there's currently no clear path to make that justification, at least not according to the CBA.
The Lakers did something similar when they signed Yi Jianlian in 2016, but he was waived before the season started.
Kentavious Caldwell-Pope | Los Angeles Lakers
Caldwell-Pope benefited when Kawhi Leonard chose to sign with the LA Clippers. Not only did the shooting guard land a two-year, $16.6 million contract but it also comes with the possibility of earning an additional $1.2 million in bonuses.
While the $163,000 incentive for being named to either all-defense team is unlikely, there's a total of $1 million available in reachable bonuses that have been deemed unlikely. If the Lakers advance to the Western Conference finals, KCP will earn $50,000. There's also $350,000 available for per-game assists (1.85), per-game rebounds (4.0) and per-game steals (1.2). He reached those three statistical criteria during the 2017-18 season but not in 2018-19.
Gay's $14.5 million cap hit this season is his largest salary since tearing his left Achilles tendon in January 2017. Included in that salary is $500,000 in a likely bonus if Gay plays in more than 60 games. Last season, the forward appeared in 69 games, his most since 2015-16.
Gay can earn an additional total of $1.5 million if the Spurs win 52 games (with Gay playing a minimum of 60 games), if he shoots 37.5% from 3 (minimum 100 makes) and if he posts a defensive rating below 103 and a defensive rebounding rate above 20%. Last season, Gay shot a career-high 40.2% from 3-point range but on only 74 made field goals.
Tyus Jones and Delon Wright | Grizzlies/Mavs
The former 2015 first-round picks both changed teams this offseason, and both signed deals with incentives.
Jones has $858,000 in a likely bonus if the Memphis Grizzlies win 33 games, the same number the team won last season. Wright's incentives are more of a long shot. The Dallas Mavericks guard can earn $350,000 for each of these three criteria: win Most Improved Player, earn an All-Star selection and/or make either all-defense team.
Maxi Kleber | Dallas Mavericks
The undrafted Kleber is on a new four-year, $34 million deal. His cap hit can increase an additional $475,000 for reaching the following incentives:
Either all-defense team: $150,000
Free throw percentage (at least 80%): $75,000
Minutes played divided by rebounds (greater than 4.0): $100,000
3-point percentage (at least 40%): $150,000
Julius Randle | New York Knicks
Randle earned $22.4 million in the first five seasons of his career, and he can make nearly that much this season if he achieves the incentives in his contract.
On top of his $18 million salary, Randle also has $900,000 available for three benchmarks: either all-defense team, an All-Star selection and making the playoffs (if Randle appears in at least 65 games). Although all three are unlikely, keep an eye on Randle posting All-Star type numbers this season for a New York team that is rebuilding.
The Sixth Man of the Year contender is on a four-year, $50 million contract that also includes $1 million per year in unlikely bonuses. To earn an extra $500,000, the guard has to have a defensive rating below 100 and play at least 63 games while averaging at least 22 MPG. Last season, Ross posted a defensive rating of 105.9.
The other half of the incentive is tied to reaching the NBA Finals.
Dewayne Dedmon | Sacramento Kings
Dedmon had one of the most complex sets of bonuses in his contract the past two seasons with the Atlanta Hawks. Now with Sacramento, Dedmon has two sets of simpler incentives:
$150,000 for total games played (70) with the Kings winning 48 games
$150,000 if Sacramento reaches the second round of the playoffs
The last time the Kings won at least 49 games was in 2004-05, and the previous season they advanced to the second round.
Thaddeus Young | Chicago Bulls
The success of the Bulls will determine whether Young's $12.9 million salary gets a slight bump. If the Bulls reach the first round of the playoffs, Young will earn a $150,000 bonus. There is an additional $150,000 available if the team wins at least 48 games.
As in his previous contract, Young also has incentives for earning MVP, most improved or either all-defense team.
The financial incentive of the postseason
Eric Gordon and Clint Capela | Houston Rockets
Gordon recently agreed to a four-year, $75.5 million extension with Houston, and last season Capela signed a five-year, $80 million contract. Both contracts comes with postseason incentives.
Capela will receive $1 million if the Rockets advance to the Western Conference finals, and Gordon will see the $20.9 million non-guaranteed salary in the final year of his extension become fully protected if Houston wins the NBA championship at any point during the contract. Gordon also will have to play either a minimum of 500 regular-season minutes or 750 minutes combined in the regular season and postseason. That $20.9 million also becomes guaranteed if Gordon is named an All-Star for the first time in his career.
Capela could earn $500,000 if he shoots greater than 65% from the free throw line and another $500,000 if his defensive rebounding rate is better than 30%. Capela improved his free throw shooting last season, increasing it from 56% in 2017-18 to 63.6%. However, his rebounding rate dropped from 27.8% to 24.1%
Al Horford | Philadelphia 76ers
At first, people around the league were skeptical of Horford's four-year, $109 million contract with Philadelphia. Why would the 76ers commit $26.5 million in 2022-23 to a 36-year-old Horford?
But Philadelphia took a unique approach by adding guaranteed language for the last season. If Philadelphia reaches the NBA Finals during the first three years of the contract, Horford's base compensation will increase from $14.5 million to $19.5 million. The Sixers winning an NBA championship for the first time since 1982-83 will make Horford's full $26.5 million guaranteed.
The Raptors' postseason success in 2018-19 also benefited Lowry financially. On top of earning $200,000 for his selection to the All-Star Game, Lowry also received $1.5 million for reaching the conference finals and NBA Finals and winning the championship. Because all of those same incentives are now deemed likely, Lowry has a current cap hit of $35 million.
Lowry has two additional $500,000 bonuses: first- or second-team all-defense and first- or second-team All-NBA. The total amount of bonus money is capped at $2.3 million, even if Lowry earns the $2.7 million available.
Luxury tax implications
Already pressed against the luxury tax, the Nuggets could see their $979,000 buffer shrink if shooting guard Gary Harris stays healthy and the team has a deep playoff run.
As part of his four-year, $74 million rookie extension, Harris has $2.4 million in incentives for team playoff success and individual honors -- similar to Nikola Jokic and Paul Millsap. However, while Jokic earned $931,000 and Paul Millsap got $350,000 a year ago when Denver reached the second round, Harris failed to meet the criteria because he played only 57 games.
If Harris plays 60 games (which he has done only twice in five seasons), the Nuggets reach the NBA Finals and the team logs 57 wins, Harris will earn $775,000. Winning an NBA championship would push that total to $975,000 and leave the Nuggets just inches away from paying the tax.
Houston Rockets
A year ago at this time, Houston was $9.1 million over the tax threshold and faced with a $14.6 million penalty. Then the Rockets made five trades in four months while Capela fell short of his $2 million in incentives. That was enough to get the team under the tax line.
This season, the Rockets start $358,000 below the line but will go over if Capela meets his bonus criteria and Houston trades Nene for more than his $2.56 million salary. Despite the possibility of becoming a luxury tax team for only the third time since 2002-03, ownership has approved a budget that would allow Houston to take back money even if that means spending into the tax.
Miami currently is $3.8 million over the tax and facing a $5.7 million penalty.
Barring a trade during the season, that tax penalty could increase to $8.3 million if Dion Waiters plays more than 70 games (worth $1.2 million) and the Heat return to the playoffs (Kelly Olynyk has a $400,000 incentive in his contract). Olynyk also has a $1.4 million bonus for minutes played (1,700) that is deemed likely.
The Blazers will see their luxury tax penalty decrease from $22.2 million to $19 million before we even get to Dec 1.
The savings are a result of Jusuf Nurkic being likely to miss the early part of the season as he rehabs from a fractured left tibia and fibula. Nurkic earned a $1.25 million bonus in 2018-19 when he appeared in more than 70 games and the Trail Blazers won more than 50 games, but he's not expected to return in time to reach that bar this season.
All-NBA and the supermax
No player has more on the line financially this season than Joel Embiid. The Sixers center will have his remaining annual salaries of $29.5 million, $31.6 million and $33.6 million become guaranteed once he reaches 1,650 minutes this season. Embiid also will become supermax eligible if he is named All-NBA for a second consecutive season. Because he is one season short of the years of service minimum for a supermax, Embiid will have to wait until 2021 to potentially sign a four-year, $212 million extension.
Besides Embiid, the Wizards' Bradley Beal and Pistons' Andre Drummond are supermax eligible if they earn All-NBA in 2019-20. Beal is also extension eligible up until Oct. 21 for a three-year, $112 million contract. If Beal does make the All-NBA team, the Wizards can offer him a five-year, $253.7 million contract in July 2020.
Drummond, has a $28.7 million player option for 2020-21 and would be eligible for either a five-year, $237.5 million contract (if he opts out) or a four-year, $196 million deal. Last season, Drummond finished with three All-NBA votes.
Giannis Antetokounmpo and Rudy Gobert already met the supermax criteria and are eligible to sign a $253.7 million extension next summer.
Other players with bonuses: Davis Bertans, Bismack Biyombo, Dante Exum, Derrick Favors, Evan Fournier, Rudy Gobert, Aaron Gordon, Maurice Harkless, John Henson, Solomon Hill, Jrue Holiday, Joe Ingles, Patty Mills, Victor Oladipo, Miles Plumlee, Dennis Schroder, Tony Snell, Myles Turner, T.J. Warren