Four Thoughts on the Adams and Oladipo Extensions

On Monday, the Oklahoma City Thunder extended the contracts of Steven Adams and Victor Oladipo for four more seasons from their rookie deals. October 31st was the last day first round rookies with three full years experience could negotiate exclusively with their current teams before heading into restricted free agency the following off-season.

As a team that has relied on the life blood of young players since arriving into Oklahoma City, the Thunder have had their fair share of experiences with the Oct. 31 deadline and rookie restricted free agency. Most notably, they were able to extend Kevin Durant, Russell Westbrook, and Serge Ibaka when their time was up without any issues in their first several seasons in OKC. But they’ve also had their negative experiences, most notably with James Harden and Reggie Jackson, who were both involved in trades before they could be offered an extension from the Thunder. On the restricted free agency front, Enes Kanter, signed an offer sheet with the Portland Trailblazers two offseasons ago before the Thunder matched it.

Here are four thoughts (one for each year they signed for) about the contract extensions of Adams and Oladipo.

1. Why so much?

Victor Oladipo reportedly signed for 4 years/$84 million, while Steven Adams reportedly signed for 4 years/$100 million. While many are praising these signings, especially the Oladipo one, the sticker price can still be a bit shocking when you look at it. But you have to realize that everyone is paying these prices, and doing it without batting an eye. It’s the new normal.

When Durant and Westbrook signed their rookie extensions 4 and 5 years ago, they both signed for 5 years in the $80-85 million range. Back then, only players who were thought to become first and second tier players (All-Star/All-NBA potential) got those types of contracts. But now, every player with potential coming off a rookie contract is getting paid, and quite handsomely, I might add. Just look at the Northwest division: Allen Crabbe, CJ McCollum, Gorgui Dieng, Rudy Gobert all signed max or near max extensions. None of those players would ever be confused with possibly becoming one of the greats of this generation.

With less than six years of service, the max allowable for Adams and Oladipo would’ve been up to 25% of the cap. The salary cap for next season is projected to be about $103 million. Twenty-five percent of that would be a four year average of $25.75 million. Adams likely signed for somewhere close to that range (reportedly for $102 million), but the bigger steal may have been Oladipo, who came into camp saying he was eyeing a max deal in the future. If he would’ve made it to restricted free agency, Oladipo would’ve likely gotten a max or near max contract, especially with the scarcity of quality wings in next year’s free agent class. Had the Thunder allowed Oladipo to make it past October 31st without an extension, they would’ve faced three options: trade him in-season, match a max/near max offer sheet from another team in the offseason, or lose him for nothing. With all those options on the table, the Thunder decided to bet on Oladipo’s continued development, and in the process, got an almost $20 million discount.

2. Why keep Oladipo and Adams, but not James Harden?

I heard this a lot on Monday when it became clear the Thunder were going to extend Adams and Oladipo. It’s an almost losing battle trying to explain to people how this scenario and the Harden scenario are completely different. Looking back on it, yes, the Thunder should have kept Harden. Lord only knows what would’ve come from those Durant/Westbrook/Harden/Ibaka teams had they stayed together a couple seasons longer. But several different factors caused the team to pull the trigger on the trade that ripped that quartet apart and the rest is history.

But these two scenarios cannot be compared at all. First off, the Thunder personnel is in a completely different position now than it was four years ago. The departure of Durant combined with the trading of Ibaka left the team with only one elite ball-handler/scorer in Westbrook. The addition of Oladipo and the continued development of Adams gave the team two centerpieces they were in desperate need to keep. Had they let either of them walk, it would’ve likely been two steps back in terms of personnel development.

When Harden was up for an extension, the Thunder already had two ball-dominant scorers. Adding a third one to that mix may have worked, but the team decided to use Harden to shore up the other needs on the team. Was there a financial aspect to the Harden trade? Probably, but sometimes in sports, you have to use one of your assets to fill the other parts of the team.

The financial variable in these two situations is also completely different. Four years ago, the Thunder were bumping up against the luxury tax line before the proposed extension of Harden. This time around, the Thunder were flushed with cash due to the increase in the salary cap and the departure of Durant. The history of the Thunder will always be intricately linked with the Harden trade, but these two scenarios are so different they don’t even warrant being compared to each other.

3. Is the Blake Griffin/Gordon Hayward free agency dream dead?

Essentially, yes. The Thunder decided to bet on the known, instead of betting on the unknown. In order to open up enough cap space to sign a max free agent, the Thunder would’ve had to do a lot of roster maneuvering to free up that amount of money. Enes Kanter would’ve likely had to have been traded into some other team’s cap space. The Thunder would’ve likely had to renounce the qualifying offers to two of either Adams, Oladipo, or Andre Roberson, opening up the opportunity for another team to swoop in and steal those players. And smaller deals would’ve likely had to take place (i.e. trading their 2017 first rounder for someone’s 2nd rounder).

And when all that is said and done, there is still the high possibility that the Thunder would’ve been left at the free agency altar empty-handed. Betting on Blake Griffin coming back home or Gordon Hayward leaving Utah is the ultimate crap-shoot, especially when both those guys are currently in good situations. The Clippers should be one of the top teams in the Western Conference, while Utah is up-and-coming.

But while the free agency dream for those types of players may be dead, the new contracts of Adams and Oladipo make them better suited to be involved in blockbuster trades in the future. It’s going to take a few seasons for everyone’s contracts to catch up to the new economics of the NBA. It is during that transition period where someone like Paul George or Jimmy Butler, both of whom signed extensions before the salary cap exploded, could be had for less, in terms of value, because of the economics of the league.

4. What about Andre Roberson?

The Thunder had the possibility of extending three of their players. They extended two of them. Andre Roberson was the one with whom they could not reach an agreement. While Adams and Oladipo are quality 2-way players, Roberson continues to be great on only one end of the floor. His value was likely more difficult to gauge, so the team decided to wait until the offseason to see how the market plays out for Roberson.

Since the salary cap exploded two offseasons ago, there has yet to be a wing on the market that excels only on perimeter defense. The best comp is probably Michael Kidd-Gilchrist who signed a 4 year/$52 million extension in 2015, just as the new TV money was starting to kick in. If you extrapolate his total to what the salary cap may be like in 2017, there no reason to think Roberson won’t earn himself an extension in the $14-15 million per season range. To the Thunder, that amount may be a bit too rich for a player that has severe limitations on one end of the floor. If the Thunder think Roberson may walk in the offseason, there may be strong consideration in the front office to trade him before the trade deadline in February.