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Jimmy Butler will have to settle for a cheap contract or a long-term deal.
Butler enters July as one of the NBA's best free agents, but knowing the NBA's salary cap is going to jump next summer thanks to the league's new TV deal, he wants to sign a short-term deal so he can opt out in 2016 or 2017 when max contracts are worth more than they are now.
Despite being a restricted free agent, which allows the Bulls to match any offer Butler receives, Butler could insist on only signing short deals so that he can become an unrestricted free agent in 2016 or 2017.
However, the Bulls may have found a way to avoid that. By offering Butler a rarely used type of contract, the Bulls have eliminated his ability to sign short-term deals elsewhere. The Bulls have put themselves in position to either retain Butler long term, or force him to play on a below-market contract in 2015-16.
The Bulls have given Butler the maximum qualifying offer, according to Basketball Insider's Eric Pincus. As Mark Deeks wrote at HoopsHype, this is a little-known CBA provision that is the most player-friendly deal a team can offer:
In a Maximum Qualifying Offer, there can be no option years whatsoever, nor any bonuses, nor any wiggle room on the salary. A Maximum Qualifying Offer is an offer of the very maximum; the full five years, the full 7.5 percent raises, and a full 100 percent guarantee in each year. It is the most player-friendly contract a team can possibly offer. And that is why it has never been used.
As Deeks writes, what the maximum qualifying offer does do is limit Butler's options. Here's what he can do:
- Butler can accept the Bulls maximum qualifying offer for five years, $90 million.
- Butler can refuse that offer, but because the Bulls have still extended it to him, other teams can only offer him contracts for a minimum of three years, with no team or player options in the first three years.
- Butler can take Chicago's simple $4.4 million, one-year qualifying offer and become an unrestricted free agent in 2016.
This gives the Bulls a huge advantage. If Butler takes the max offer, they lock him up for five years, and the $18 million yearly average he'd make would be a bargain compared to what max contracts will be worth when the salary cap spikes.
If Butler doesn't sign the Bulls' max offer and chooses another team, he'll be taking less money. Other teams can only offer Butler a max contract over four years with 4.5% yearly raises. As a restricted free agent, the Bulls can match that offer and lock Butler up for three or four years at an even cheaper rate.
Butler's final option is to take his $4.4 million qualifying offer for the 2015-16 season and become an unrestricted free agent next summer. In some ways, this is an advantageous option for Butler, as Grantland's Zach Lowe writes:
The catch: Butler would earn just $4.4 million next season playing under the qualifying offer, nearly $11.5 million less than the $15.8 million he'd make in the first year of a long-term max deal from the Bulls.
But the cap boom chips away at that risk by ballooning the reward at the other end. A max deal for Butler signed a year from now, with the cap at $90 million, would start at around $21 million - a massive jump. Butler could play out one season with the Bulls, sign a four-year deal next summer with another team, and make about $4 million more over that five-year period than he would re-signing with Chicago for the long haul now. That kind of upside just didn't exist in a normal cap environment.
Taking the $4.4 million qualifying offer is less desirable in other ways, however. After Butler turned down a four-year, $40 million extension from the Bulls last fall to play out his rookie deal, he'd be taking yet another gamble on himself. One serious injury or one major statistical regression, and Butler might not sniff the max deal he could get now.
As Lowe notes, the best compromise may be for Butler to sign a three-year deal with a fourth-year player option. Butler would earn some security and money in the immediate future, and the Bulls would get another three years of Butler in his prime. By the time he could opt out after three years, he'd be in his seventh season, just 28 years old, and would be eligible for the second-highest max in the league, which would pay him 30% of the league's salary cap (over $100 million by that time).
The Bulls have played the situation as wisely as they can. They reward Butler with a max contract now while earning long-term security. If he turns it down, they can match any other offer he gets, which would be shorter and cheaper. And if Butler has the guts to take another one-year gamble on himself, the Bulls get another year of his services at an extremely cheap rate while knowing they did everything they could to keep him.