If you scroll through YouTube there is a neat video on there, uploaded in June of 2017, that shows Fred VanVleet back home in Rockford and fresh off his rookie NBA season schooling a local high school senior and another local G-League pro in a controlled game of 1-on-1.
Funny story: the high school kid, turns out, was Jordan Poole, then 17. He was about to head to the University of Michigan where he played two seasons before being taken by the Golden State Warriors with the 28th pick in the 2019 NBA Draft, the same summer that VanVleet, the undrafted guard who 'bet on himself,' cashed in with a four-year contract for $85 million.
But NBA finances rarely stay static — or comprehendible — for very long.
Poole has come a long way from getting his shorts handed to him by the older, stronger, and more experienced VanVleet five summers ago. He helped lead the Warriors to a championship last June, establishing himself as one of the most prolific young scorers in basketball. And last week — just days after going unintentionally viral when a video of him being viciously punched in practice by teammate Draymond Green was leaked to TMZ Sports — Poole was rewarded with a four-year extension deal worth $123 million guaranteed, or $38 million more than his former 1-on-1 teacher.
That contract came on the heels of Miami Heat guard Tyler Herro — a prolific scorer who, much like Poole, neither started last season nor was recognized for his defence — signing a four-year rookie extension with the Miami Heat with $120 million guaranteed.
They are just two of the eye-popping contracts that have been handed out across the NBA over the past few weeks or months in advance of the 2022-23 season, which opens tonight.
Why are we now living in a world where Herro and Poole — a pair of score-first, defence-optional shooting guards with barely 100 career starts between each in line to earn more than $30 million a season?
And why are we heading into the season with the Toronto Raptors having not yet reached extensions with both Pascal Siakam and VanVleet, their pair of proven two-way workhorses with all-star nods and All-NBA recognition on their resumes?
And could the Raptors come to regret not getting deals done?
Ah, welcome to the wacky world of NBA economics, which — barring some kind of massive correction — only promises to get more difficult to fathom in the years to come.
Why did Herro and Poole get paid? While the money looks massive now, as league revenues increase, they could almost be bargains.
League revenues are going up after flat-lining during the peak(s) of the pandemic. The salary cap — which reflects a roughly even split of basketball-related revenues between the league and players — increased by 10 per cent from 2021-22 and stands at $123.66 million this season. Two more years of comparable growth and the NBA could be looking at a $150 million salary cap for the 2024-25 season.
And after that? The league will be in line for a new deal for its media rights, with some reports suggesting that the existing nine-year, $24-billion deal could more than triple to $75 billion with the potential players like tech giants Apple or Amazon joining more traditional media companies to drive up the price.
It’s all conjecture, but the possibility exists that NBA teams would have a $171 million salary cap for the 2025-26 season. Remember when the league’s first $200 million contract seemed hard to fathom? Well, we could be just a few years away from a $350 million deal paid out over five years, and by the way, if Raptors rookie-of-the-year Scottie Barnes progresses at the rate everyone hopes he does, he might be in position to sign it.
With all that in mind, you can understand why Siakam likely won’t sweat passing on what could have been a three-year extension worth $130 million, which represents a 30 per cent share of a projected $134 million salary cap.
If Siakam earns All-NBA honours this season he would be eligible for a ‘supermax’ extension next summer: potential a five-year deal for 35 per cent of the cap and eight per cent raises that could be worth in the neighbourhood of $300 million, or more.
With that kind of carrot dangling, Siakam’s stated individual goal at media day — "I wanna be a top-five player in the league. I wanna be one of the best, and I’ll do everything I can to make that happen" — makes perfect sense, and it’s obvious, in retrospect, that the possibility of Siakam signing what would be a team-friendly extension before what he hopes will be his best season was never a likely scenario.
Similarly, if VanVleet doesn’t sign an extension — unlike Siakam, his new deal can be struck any time this year — it’s unlikely a reflection of his views on his long-term future in Toronto, but just him being a businessman and keeping an open mind.
"I will just say that I love being a Raptor," was VanVleet’s media day answer, and one he doubled down on Monday. "I have a great relationship with management, ownership, coaching staff. There’s nothing I could really ever complain about being on this team. But I’m not going to speak on contractual things so you guys will know when it’s time to know. I’m happy with where I am, and I think it’s a mutual love."
But love doesn’t always equal money.
By league rules, the most the Raptors can offer him is a four-year contract and a 20 per cent increase on his current deal — so $114 million — which would kick in for the 2022-23 season.
With the cap rising and contracts like Poole’s or Herro’s to use for comparison, VanVleet can likely proceed with confidence, knowing that — like Siakam — just because he doesn’t cash in now, doesn’t mean there’s not a bigger pot of gold waiting for him in the near future.
And by the same measure, the Raptors can take some comfort in that if they do have to dig deep into their considerable pockets for deals for their stars that might have seemed incomprehensible not all that long ago (former Raptors star Vince Carter earned just $171 million over his entire 22-year NBA career), it will be because VanVleet and Siakam are playing well, and the team is benefitting.
"My individual success is pretty much based on how the team does," VanVleet said Monday. "The way I play is relative to how the team does. I've always won, I've been a winner, and I'll continue to strive to be that. So, if we do well that means I'm probably playing well and the team is doing well… everything else will probably work itself out."
A lifetime of riches likely didn’t seem possible when VanVleet was spending a hot summer day working on 1-on-1 moves in a gym in Rockford against a promising high school kid, but the NBA is a place where dreams can happen in a hurry.
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