What does Jrue Holiday's extension mean for him and the Milwaukee Bucks?
ESPN's Adrian Wojnarowski reported Sunday that Holiday and the Bucks have agreed to a four-year extension worth $135 million in base salary and up to $160 million including incentives. That ensures Holiday, who had a $27.4 million player option for the 2021-22 season, will stay in Milwaukee after being acquired in a trade last fall.
With Holiday under long-term contract along with two-time reigning MVP Giannis Antetokounmpo and All-Star Khris Middleton, where do the Bucks go from here? And what does Holiday's decision to extend do to a crop of 2021 free agents that had already been thinned by multiple veteran extensions? Let's take a look.
Milwaukee keeps its core together
When the Bucks dealt two first-round picks (in 2025 and 2027) and two swaps (in 2024 and 2026) to the New Orleans Pelicans for Holiday last November, they were taking a risk on two fronts. At that point, both Antetokounmpo and Holiday were potentially headed toward free agency this summer.
The potential cost of those draft picks became a lot less scary for Milwaukee when Antetokounmpo signed a supermax extension in December. Now, the Bucks have ensured that Holiday will stick around too. That did come at a cost.
With Holiday getting the largest possible extension -- a 20% raise off his current $25.1 million base salary, with nearly $5 million in additional incentives -- Milwaukee joins the Brooklyn Nets, Golden State Warriors and Philadelphia 76ers as one of four teams in the league with three players under contract for at least $30 million in 2021-22 salary.
After their money-saving trade for P.J. Tucker, the Bucks may avoid the luxury tax this season, depending on the current incentives in Holiday's contract -- many of which require him to play 59 games after adjusting for the shortened season. Because of the time he missed in the NBA's health and safety protocols, Holiday needs to play in at least 21 of the team's remaining 23 games to get there. Holiday also has a $1 million bonus if Milwaukee wins the championship and he plays at least 75% of the team's playoff games -- on top of $200K for reaching the NBA Finals.
With raises for both Antetokounmpo and Holiday, the Bucks are almost certain to pay the tax in 2021-22. Their tax bill only figures to escalate from there, with starting guard Donte DiVincenzo due for a new contract the following season, via either extension next fall or as a restricted free agent in the summer of 2022.
Milwaukee isn't scheduled to get significant salary relief until the summer of 2023, when starting center Brook Lopez reaches the end of his current contract and Middleton has a $40.4 million player option.
If the Bucks' ownership group is willing to pay the tax for a championship contender, this core can stay together through Giannis' prime. But it's likely that the big salaries of their stars will force the team to make cuts around the edges, which could hamper Milwaukee's depth. That's the price of paying for veteran talent in a smaller market.
Holiday's value is worth the money
As compared to Brooklyn's star-studded trio, Holiday might not look as obviously worth a deal that could pay him $40 million per year if he maxes out the incentives. Holiday has been an All-Star just once in his career, back in 2012-13 with the Philadelphia 76ers. He's never been voted to the All-NBA Team. Yet advanced statistics suggest Holiday is more valuable than his accolades show.
Holiday has been a consistent standout in ESPN's real plus-minus, finishing in the top 25 in RPM every season since 2015-16. So far this season, Holiday's plus-3.7 RPM ranks 22nd league-wide. We saw that value reflected during Holiday's absence from the lineup while battling COVID-19, during which the Bucks suffered a five-game losing streak and went 5-5 overall. Since Holiday's return, Milwaukee is 12-4 to climb back within two games of the Eastern Conference lead.
During the playoffs, Holiday's value is likely to be amplified because of his ability to excel at both ends of the court. Holiday will be the Bucks' top defensive option against opposing perimeter stars, and his combination of shooting and playmaking should make it more difficult for opponents to give help in the paint against Antetokounmpo than it was with predecessor Eric Bledsoe at point guard.
There's also the matter of what kinds of offers Holiday might have gotten had he reached free agency this summer. With Antetokounmpo and All-Stars Paul George and Rudy Gobert signing extensions last fall, Holiday could have been one of the best players available. Two-time Finals MVP Kawhi Leonard can still be a free agent if he declines his 2021-22 player option with the Clippers, but Leonard is the only potential unrestricted free agent who is clearly more valuable than Holiday going forward.
From that standpoint, Holiday played it safe by agreeing to an extension rather than testing the market. This is still a nice payday for Holiday, who also got a player option that could allow him to hit free agency in 2024, when he'll be 34.
Each extension that takes players out of 2021 free agency improves the outlook for those who will be on the market. In particular, having Holiday off the board should be beneficial to the other point guards available, a group headlined by Toronto Raptors guard Kyle Lowry.
Phoenix Suns guard Chris Paul also has an interesting decision to make on a $44.2 million player option for 2021-22. Paul wouldn't realistically get offers of that size in free agency but could choose to secure a multiyear contract while he's still playing at an All-Star level.
Meanwhile, Holiday's extension puts into context the decision by Los Angeles Lakers guard Dennis Schroder to decline an extension offer. Teams searching for point guards in their prime will now have Schroder atop the unrestricted market, with restricted free agent Lonzo Ball also an option.
With Holiday under contract, Milwaukee won't have to worry about shopping for starters in free agency for several years to come. The Bucks have their core in place and now are focused on ensuring the right supporting pieces are in place for a run at a championship.