Was Dirk Nowitzki's new $50 million deal misreported, misunderstood, or was it simply a one of a kind for a Hall-of-Fame caliber star? Here's a tale of an intriguing deal.
THE DEAL AS REPORTED
When news broke of Dirk's looming deal, it was reported to be a two-year $50 million deal, with $25 million each year and the second year being "fully guaranteed for $5 million of the $25 million at the Mavericks' option."
But we knew that wording presented several problems. First, it has a conflict regarding what's said about the second year of the deal, because it can't be both "fully guaranteed" to Dirk, and yet exist only "at the Mavs' option." So we took the info to mean that the second year is "partially guaranteed" in the amount of $5 million, assuring Dirk gets that amount no matter what, with the ability to reduce the amount owed in the event of a waiver of the contract being erroneously called a "team option" (a common terminology mistake often made by some unfamiliar with the NBA's contractual rules).
But when we double-checked with a source who would have full knowledge of the deal, he insisted it is indeed an "option." And he further underscored that it was written like that to enable the Mavs to have extra contractual flexibility in 2017 (if needed), without having to put Dirk on waivers to obtain it. In contrast, a partially guaranteed year would require the contract be waived, in order to have the flexibility to either pay less or do a new one, and any other team could first claim the player to play for his existing contract if they wanted to.
Our source made it clear to us the Mavs don't want to take any waiver risk with Dirk.
So how can Dirk be "guaranteed" $5M in Year 2, but with an option involved? A player option? But how would that be for $5M rather than $25M? A partially-guaranteed option? An NBA-legal contract that fits all those parameters would not be a simple one.
Furthermore, combining the concept of "option year' and "partial guarantee" is somewhat tricky, and as result is almost never done. When adding option years, guarantee-wise the option year has to look just like the previous year of the contract they are being added to. So how could the Mavs have a partially guaranteed option year on a one-year fully-guaranteed $25M contract? They can't. And in practice, we see option years and/or partially guaranteed years but not both in the same year - they just pick one or the other (or neither).
A GUESS AT THE DETAILS
So was it possible to reconcile all those conflicting details into one CBA-legal deal? Yes. Sorta. But it would have to be a very unusual type of deal. (In fact, it's such an odd duck that we had to wonder if the deal was more ordinary, with its details being misreported or misunderstood in some way by ... somebody.)
But we assumed it was probably constructed to include all the pieces being described, leading to the following about what Dirk's new deal was going to look like:
1 A one-year deal with an option for a second, and each year will be for $25M.
2 When signed, only $5M will be guaranteed (in year 1) out of the whole amount, with date triggers for more guarantees. Not $50M guaranteed, or even $30M, since more guaranteed money up front would not be CBA-legal.
3 The second year might be a player option year, not a team option (to make it have some guarantee to Dirk).
4 The option year would only be partially-guaranteed (for $5M).
An unique contract? Definitely. The combo of "option" and "partial guarantee" would be rare all by itself, and what star player has ever been willing to sign a deal with only $5M in guaranteed money, to accommodate team needs for future flexibility?
HOW WOULD ANY OF THIS MATTER?
First off, the greatest player in Mavs history is satisfied.
"I left a lot of money on the street to have a good team to bring a championship the last few years,'' he said this weekend. "But they have now rewarded me with something that made me naturally pleased that Mark is so loyal to me.''Whatever the deal with Dirk, the Mavs told us it's about "Dirk gets what Dirk wants'' (see the Mark Cuban Q-and-A here) and about "future flexibility.'' And if there's the opportunity to retain flexibility while also making sure Dirk gets paid appropriately, why not? (Indeed, for months we've been suggesting ideas for Dirk to get paid two years pay every other year, opening up cap room to add other players, in our MIN/MAX and MAX/MIN articles and others.)
Flexibility is certainly needed. As they move forward, both Dirk and the Mavs have huge question marks looming. They both have to consider that the league may have a completely new CBA by the summer of 2017, and the rules for player pay might change considerably (for better or worse). In addition, Dirk's age is an issue because of the questions it raises: will we continue to see him going strong on the court and continue to have a love for the game, or will his family-first attitude make him want to leave basketball sooner rather than later, or could he lose his stellar ability this coming season? And the roster around him offers questions marks as well, as it was considerably restructured this summer, leaving uncertainty over whether the team will go into the summer of 2017 wanting to keep the roster intact and operate in an over-cap fashion (re-signing their own free agents using Bird rights, assuming they still exist), or whether they might feel a need to revamp considerably again.
None of those questions are likely to be answered until the 2016-17 season ends.
But in our theorized contract as outlined above, when the time comes, Dirk's contract will have multiple directions for the Mavs and Dirk to pick from, with each of them as desirable as can be to fit a particular direction. If he is thinking of adding multiple years to his NBA career at that point, he can decline his option in June, and perhaps sign a new deal at the end of free agency that opens the door to more years and bigger money in future years (and possibly reducing his cap hit each summer but retaining Bird rights for as many later years as he keeps wanting to play). Or if he thinks the team looks good as is, only needing some tweaks, he could exercise his second-year option and play another year for $25M before they have to figure out what to do in 2018. Or if he decides he wants to hang up his sneakers, he could choose to simply retire while opting for a $5M payout on the way out the door (that could then be stretched out over 3 years, if the Mavs wish).
And the beauty of such a deal is that no decision on these various directions needs to be made until June of 2017, when the future of the CBA, the Mavs roster, and Dirk himself has become much clearer.
We ran our thinking about the details of this contract back at some NBA sources, and now we're hearing the deal is "simple." How simple? From what we're told, it's just one year, with a team option for a second, at $25M per.
What happened to the reported $5M guaranteed in year two to Dirk at the Mavs' option? We weren't offered any explanation. Maybe it was simply misreported. Maybe there was a misunderstanding. Maybe the deal changed over the last few days, for one reason or another. Or maybe the deal is not all that simple, and it's in there somewhere after all.
We'll find out once something is signed, submitted to the league, and approved. Until then, we can offer educated guesses about a Dirk Nowitzki deal that may or may not be "simple'' at all.