The Utah Jazz now enter the most important -- and perhaps the most expensive -- offseason in franchise history.
While there will be plenty of reflection on the regular season and the first-round Western Conference series loss to the Denver Nuggets, the primary focus will be on potential extensions for All-Stars Donovan Mitchell and Rudy Gobert.
Signing both players to long-term contracts would see the Jazz make an investment of at least $300 million in the two players.
Can the Jazz afford both players and still have the resources to maintain a playoff roster?
Note: The financials in here are based on the salary cap and luxury tax holding at the 2019-20 levels, as expected. Dates are subject to adjustment.
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The rookie extension of Donovan Mitchell
Even before his 57-point performance in Game 1, Mitchell was in line to sign the most lucrative contract in Jazz history, for a projected $158 million over five seasons.
The question is if an agreement will be reached on Oct. 18, the first day a player can agree to a rookie extension, or if the Jazz will wait until the 2021 offseason.
Mitchell is an All-Star, a franchise player, one of the top players under age 25 and durable, having missed only 11 games in three years.
However, the decision on whether to extend is not that simple, and here is why:
Because he was drafted outside of the top 10 (the No. 13 pick in 2017), Mitchell will have a $15.9 million cap hold in 2021, a projected $11.3 million less than where his new salary would start.
The $27.3 million starting salary could increase if both sides negotiate All-NBA language and also if the cap in 2021-22 increases from $109.1 million (where it was in 2019-20 and possibly will be in 2020-21).
With the $34.5 million Mike Conley contract set to expire, the Jazz could have between $25 and $30 million in room before offering a new contract to Gobert (more on that below). That number could decrease if free agent Jordan Clarkson is brought back.
The virtue of waiting is giving Utah the flexibility to sign free agents. But it should be noted that before Bojan Bogdanovic signed a four-year, $72 million contract last summer, Utah had taken a conservative approach in building its roster, focusing more on internal development of its draft picks and the trade front.
Meanwhile, if the Jazz do wait until 2021, they will be walking a fine line with their star player. Of course, the Jazz can pitch Mitchell on the benefits of waiting, but will he accept that while Gobert signs an extension and Clarkson is brought back? Mitchell could even point to the Joe Ingles extension that decreased cap space by $13 million in 2021.
Plus, what happens if there is turmoil during the 2020-21 season, giving Mitchell second thoughts about being in Utah for the long haul? Yes, Mitchell would be a restricted free agent, allowing Utah to match an offer sheet. But the Jazz would run the risk of a team signing him to a four-year offer sheet with a team option, which is how Utah lost Gordon Hayward prematurely.
From the perspective of the Jazz, there is financial risk even if they preserve flexibility. Although there would be an understanding that a max contract would be waiting even if there was an injury, the contract would be uninsurable (for that specific injury) if Mitchell were to suffer a significant injury during the 2020-21 season. That means instead of the Jazz possibly collecting $22.5 million in insurance, they would then be on the hook for the full $27.3 million salary.
The max extensions signed by Devin Booker of the Phoenix Suns (two years ago) and by Pascal Siakam of the Toronto Raptors (last year) showed that teams are willing to forgo cap space in order to secure a long-term commitment and good will from their franchise players.
The Rudy Gobert extension
"We're looking to add players with the physical talent and the competitive makeup of Donovan and Rudy," said Utah vice president of basketball operations Dennis Lindsey. "We want to build around them moving forward."
But first, let's get this out of the way. Though Gobert is eligible for a five-year, $221 million supermax contract, the Jazz should not -- and likely will not -- entertain the idea of extending him to such a contract.
Yes, Gobert is one of the top defenders in the NBA and an important player, but the contract would average more than $51 million in its last three seasons, a massive amount for any player and especially one that contributes so little scoring.
Combine that with the Mitchell rookie extension and Utah would have close to $90 million committed in two players starting in 2023-24.
Take the $220 million supermax off the table and the Jazz have multiple creative ways to structure a new contract:
They can offer Gobert a four-year, $133.0 million extension. The new contract also would include a total of $17.5 million in likely bonuses and more than $1.6 million in unlikely incentives. The total would come out to $151 million, which is $10 million more than a team with cap space in 2021 can offer.
They can offer him a five-year, $189.9 million extension. Although this is not the full supermax extension (which is 35% of the cap), the Jazz are permitted to start at 30% in the first year.
They can offer him the full super max of 35% of the cap for Year 1 but decrease the salary 8% each year. The total would come out to $160 million over five seasons.
If the league keeps the luxury tax flat in the next two seasons, a salary starting at $38.2 million in 2021-22 would be cost-prohibitive. If an extension starts at 30% of the 2021-22 cap, Utah cannot offer less than five years in an extension.
The Jazz will need to look at the landscape of the league in 2021.
If the salary cap is $109 million, a minimum of 12 teams -- Atlanta, Charlotte, Chicago, Cleveland, Dallas, Detroit, the Lakers, Miami, New York, Phoenix, San Antonio and Toronto -- will have room north of $30 million.
The Jazz have balanced their finances to allow both Mitchell and Gobert to sign extensions; build out the roster with draft picks, the midlevel exception and Utah's own free agents; and still stay under the luxury tax in 2021-22 and during the length of their new contracts.
Prioritizing Jordan Clarkson
Clarkson does not carry the status of Mitchell and Gobert, but the unrestricted free agent will be a priority when free agency starts.
Acquired in late December from the Cleveland Cavaliers for two future second-round picks and Dante Exum, Clarkson gave life to a Utah bench that ranked in the bottom of the league in scoring. With Clarkson's arrival a factor, the Jazz went on to win 23 of the last 34 games before the season was suspended in mid-March.
In the 34 games, Clarkson averaged 15.6 points (third highest on the team) and 25.3 minutes, shooting 48.2% from the field and 36.6% from 3. Clarkson continued providing punch off the bench in the playoffs.
The Jazz have an advantage in re-signing him, not only because of Clarkson's Bird rights but also because 20 of the 30 teams will be restricted with only the $9.3 million or $5.7 million midlevel exception.
Offseason cap breakdown
If the tax drops to $132.7 million (the same as in 2019-20), Utah will have $9 million in room but with 14 players (including their first-round pick) under contract.
Utah will have the midlevel and biannual exceptions.
Depth chart
The resources available to build the roster
The draft: first-round pick
$5.6 million to send and receive in a trade
Own free agent: Jordan Clarkson
Exceptions: $9.3 million midlevel and $3.6 million biannual
Dates to watch
Conley opting into his $34.5 million contract for 2020-21 is pretty likely, especially given his spotty health of late, his age (33 in October) and the lack of teams with cap space. But one alternative for Conley is for him to opt out and work out a new contract with Utah. For example, Conley could still get his $34.5 million, but spread over two years: $28 million in 2020-21 and $6.5 million guaranteed (out of $26 million) in 2021-22. That would lower Utah's overall salary commitments for the upcoming season.
Utah has five players with partial or no salary protection, including Juwan Morgan ($1.5 million), Georges Niang ($1.8 million), Miye Oni ($1.5 million) and Rayjon Tucker ($1.5 million).
Niang will see his contract guaranteed once he is not waived by Oct. 26.
Tucker has $340,000 guaranteed, with the remaining amount protected if he is not waived by Nov. 8.
Restrictions
Conley cannot be traded until he exercises his option for 2020-21.
The protected amount for the five players on non-guaranteed or partially guaranteed contracts count as outgoing salary.
The Jazz cannot trade a first-round pick until two years after the pick to the Memphis Grizzlies is conveyed, which probably means the 2024 pick is the first that is eligible for trade.
Extension candidates
Niang joins Conley, Gobert and Mitchell as the Jazz players who are extension-eligible.
After being drafted in the 2016 second round by the Indiana Pacers, Niang signed a three-year, $4.9 million contract in 2017. As a result of the injury to Bogdanovic, the forward has seen his minutes and production increase during the NBA restart in Orlando, Florida. In the eight seeding games, Niang topped 20 minutes three times. In the playoffs, he scored a season-high 16 points against Denver. The Jazz would first need to guarantee his 2020-21 salary and then add up to four years to his current contract. He is an unrestricted free agent in 2021.
The draft assets
Utah will send Memphis a 2021 first-round pick (protected 1-7 and 15-30). If that's not conveyed, the Grizzlies will have Utah's 2022 first (top-6 protected). The first also has top-3 protection in 2023 and top-1 in 2024.
Here's how ESPN's Jonathan Givony and Mike Schmitz have Utah selecting in October:
• No. 23 (own): Josh Green | SG/SF | Arizona