Besides a celebration, what does Giannis Antetokounmpo's decision to sign a five-year, supermax extension mean for the Milwaukee Bucks?
Undoubtedly, this was the outcome the Bucks were hoping for -- keeping the two-time MVP in Milwaukee beyond his potential free agency next summer and avoiding an entire season of speculation about his future.
At the same time, in some ways Giannis' extension is just the beginning of the job for the Bucks' front office, which now must find a way to keep a championship-caliber team around him without going deep into the luxury tax. Where does Milwaukee go from here?
And what about the teams that had planned to make a run at Antetokounmpo in free agency next summer? Let's take a look.
Holiday extension next
The Bucks still have a possible 2021 free agent to take care of with an extension: guard Jrue Holiday, their marquee addition this offseason in a trade that sent three first-round picks and two swaps to the New Orleans Pelicans in return.
Because he was traded, Holiday is subject to limitations on his extension until midseason that would allow him to add only a single season beyond his 2021-22 player option, at a 5% raise -- less than he could make by simply playing out the contract and re-signing with Milwaukee.
Those extend-and-trade restrictions expire Feb. 26, per ESPN's Bobby Marks, enabling Holiday to sign an extension that would replace the player option and add up to three additional years with a possible starting salary in 2021-22 of more than $30 million, improving upon his $27.38 million player option.
Presumably, the Bucks wouldn't have been willing to give up such a huge haul of draft picks for Holiday without an idea that he'd be amenable to a possible extension. I'd expect a deal to be struck midseason.
Milwaukee roster getting expensive
It's a good problem to have, but Giannis' guaranteed raise of at least $11.9 million (which could increase in the unlikely event the NBA's salary cap increases by more than the negotiated minimum of 3% for the 2021-22 season) will cause the Bucks' payroll to skyrocket.
Counting player options for Holiday and reserves Bryn Forbes and Bobby Portis, plus a team option for guard Donte DiVincenzo the team is sure to exercise, Milwaukee is already committed to nearly $150 million in 2021-22 payroll. That would put the Bucks $13 million above the projected luxury-tax line before filling out the roster with a couple of additional players. An extension that gives Holiday a raise on his player option would only add to that total.
Realistically, a tax bill is the cost of doing business for a championship contender. Over the past five years, the lone two champions not to pay the tax (the 2016-17 Golden State Warriors and last season's Los Angeles Lakers) were both teams that used cap space the previous offseason. The Warriors then went into the tax in 2017-18, as the Lakers project to do this season. Still, it's different for those two teams in major markets to pay large tax bills than it is the Bucks, who have spent into the tax only once in franchise history according to HoopsHype.com: 2002-03.
As Giannis' well-deserved extension increases 8% year over year while the cap stays relatively flat (negotiations to revise the collective bargaining agreement in the wake of the COVID-19 pandemic guaranteed a minimum 3% annual increase in the cap but also a maximum of 10% through the potential expiration of the CBA in 2022-23), Milwaukee's cap math won't get any easier in the foreseeable future. Depending on the structure of a possible Holiday extension, the Bucks won't get appreciable spending flexibility until Khris Middleton's contract expires after 2023-24, when he holds a player option for $40.4 million.
To remain competitive through Giannis' prime, Milwaukee also has to get creative infusing young talent into the roster without the benefit of first-round picks in 2022 (traded to Cleveland), 2025 and 2027 (both traded to New Orleans). While aging isn't an immediate concern for the Bucks, Holiday is 30 and Middleton 29, putting them on the downside of the curve for NBA players. Starting center Brook Lopez (32) and guard D.J. Augustin (33) will probably need to be replaced when their current contracts end.
Certainly, these are concerns nearly any other NBA front office would love. Still, they're a reminder that the Bucks' work isn't close to done when Giannis puts pen to paper on his extension.
Pivot for Miami, Toronto and Dallas?
For the Bucks, the best thing about Antetokounmpo delaying an official decision on the supermax extension, which he could have agreed to at any point after free agency opened on Nov. 20, is the way it affected the offseason for two of Milwaukee's Eastern Conference rivals. Both the Miami Heat and Toronto Raptors, who knocked the Bucks out of the past two postseasons, limited their 2021-22 spending so as to potentially pursue Giannis in free agency next summer.
Now that Giannis is off the table, it will be interesting to see how the Heat and Raptors adjust. There's still value in having cap space in 2021, but next summer's free-agent class is looking far less star-studded after Antetokounmpo, Finals MVP LeBron James and Paul George of the LA Clippers all agreed to extensions in the past few weeks. (Several players also agreed to rookie extensions, but as potential restricted free agents they weren't actually going to be available in free agency anyway.) Rudy Gobert of the Utah Jazz could join them by also agreeing to an extension.
If so, teams looking at adding a star in 2021 free agency would be reduced to hoping they can convince George's Clippers teammate Kawhi Leonard to unexpectedly change teams or focusing on a group of free agents with more question marks like Victor Oladipo of the Indiana Pacers.
With free agency no longer so appealing, Miami and Toronto -- as well as the Dallas Mavericks, another hypothetical Giannis suitor and the only West team that has prioritized 2021 cap space -- could pursue in-season trades that add salary to their books for 2021-22 and beyond.
The Heat face a particularly interesting decision on whether to make an offer for MVP James Harden, who is seeking a trade from the Houston Rockets. Harden would bolster a roster that reached the 2020 NBA Finals, but at the cost of substantial young talent (most likely headlined by second-year guard Tyler Herro) and a dramatic makeover to the team's offensive style of play.
Meanwhile, Antetokounmpo's extension could facilitate one for Raptors forward OG Anunoby. Because Anunoby's next contract will surely start at more than his $11.7 million cap hold, Toronto can maximize its 2021 cap space by waiting to re-sign Anunoby next summer. If that's no longer as important, the team might want to lock in Anunoby's next contract now, much as Miami already did with All-Star Bam Adebayo.
Undoubtedly, the Heat, Mavericks and Raptors would have preferred to have a shot at Giannis next summer. The silver lining in his decision to extend now is giving them more flexibility to investigate a Plan B without waiting all the way until the 2021 offseason.