Vol.3, Iss.1: The Loophole
How Paul & Phoenix might use a loophole which Chris helped create, in order to reach an agreement that is best for both parties. Plus - what it could mean after.
A Fresh Start…..
New Volume, who dis? With the NBA officially ticking over into the new league year on August 2nd, it is the perfect time to turn the page on yet another Newsletter collection. Can’t believe we are at Volume 3 already! If you are a returning subscriber, thank you. But if this is your first time, please settle in & think about hitting that little button below. There promises to be plenty of new content during this off-season flurry, before I take a little break.
Let’s Get Tricky…..
If you are reading this…..it’s not too late.
I am coming to you from the future to warn of a possibility you should be prepared for.
It is August 2nd, 2021 - 36 year old Chris Paul has reportedly committed to Phoenix for up to 4 more years & the Suns to Paul for up to $120 Million. A contract that could see CP3 wearing the purple & orange until age 40.
But trust me, don’t freak out just yet.
Before we dive into the intricate details of the deal, let’s rewind through CP3s illustrious NBA career that spans over 16 years to date.
August 1st, 2021 - Paul (36) opts out to become a Free Agent.
November 16th, 2020 - Paul (35) is traded from OKC to PHX.
July 16th, 2019 - Paul (34) is traded from HOU to OKC.
July 7th, 2018 - Paul (33) signs his most recent contract with HOU.
June 28th, 2017 - Paul (32) is traded from LAC to HOU.
August 21st, 2013 - Paul (28) is elected as the President of the NBPA.
July 10th, 2013 - Paul (28) signs his first FA contract with LAC.
December 14th, 2011 - Paul (26) is traded from NOLA to LAC.
June 28th, 2005 - Paul (20) is drafted into the NBA by NOLA.
Why all the dates & ages, you ask?
I am here to explain why it might not be a coincidence when the current President of the National Basketball Players Association signs a new contract, that takes advantage of a loophole within a rule that was originally created to address another loophole. A rule that Paul happened to have a hand in amending in 2016. It’s loophole inception!
So…..what about this loophole?
Well, the one key date missing from the timeline above is this one.
December 14th, 2016 - The NBA & NBPA agree to a new CBA that runs from 2017 to 2024. One amendment changes the ‘Over 36 Rule’ to an ‘Over 38 Rule’.
TL;D/R - The NBA created a rule that made it harder for teams to sign older players to longer term contracts they never intend to finish, in order to pay them more money. Then, a Chris Paul led Players Association pushed to increase the age this rule applied to by 2 extra years.
So the Over 38 Rule addressed a particular loophole but it may have created another one in the process. A loophole that CP3 was in prime position to understand & exploit.
The way the rule is written, contracts of 4 or more years where the player will be 38 or older in any year of the contract are deemed as Over 38 contracts. However, there's a single exception - if a player is 35 or 36 & re-signing with his existing team as a Full Bird Free Agent, then that player can sign a 4 year deal without triggering the Over 38 rule.
This exception does not apply to a player signing with a new team, nor does it apply to a player signing an extension with their existing team.
Chris Paul is 36 years old & a Full Bird Free Agent. Here in the future, CP3 just signed a 4 year deal with his existing team instead of inking an extension. Interesting.
Cool…..why does all of this matter?
Well, back in the present where you are - the tea leaves are starting to predict the future.
Last Issue we spoke about the possibility of CP3 choosing to opt out & sign a new deal. Whilst it wasn’t my preferred option, the smoke is starting to billow warning of the fire. I’ve seen the result of the fire in the future & I can confirm - CP3 is opting out.
Next, $100 Million was mentioned last time as the rumoured magic number Paul was seeking with a new contract & it seems as though that was on the money. Literally.
And finally, just between you & I - when I drank my tea the other morning, at the bottom sat a message in the leaves. It warned that 1 of CP3s old teams was coming hard for a return of his services. In fact, they’d been responsible for setting the asking price. I couldn't quite make out the mascot in my cup but I’ll let you connect the dots.
Okay okay, I am hearing you loud & clear. “David - what the f**k does all this mean?”
You may have noticed in the previous Issue, although I mentioned the $90,000,000 - $100,000,000 bracket for Paul, all the calculations from a Phoenix perspective were done at the lower end of the scale. This was 100% by design. Why?
Simply put, the Suns have to make sacrifices if the math is calculated at the upper end of the range. Opt In or Opt Out. Either way, making additions for the upcoming season becomes harder & juggling the future Luxury Tax implications is tough too.
Unless……
If only there was a rule that limited other NBA teams to offering just 3 years to CP3, while the Suns could offer 4. What if the Suns matched the $100 Million asking price, but kept the financial flexibility of a $90 Million contract, by guaranteeing the final $10 Million in a 4th season?
Okay…..how about now for the Suns?
If you’ve made it this far, I have a reward for you.
Here’s the breakdown of what the Suns available options might be under this scenario & what they might do for the remainder of the Free Agency period.
But first, a few quick disclaimers & explanations;
Robert Sarver recently did a radio hit that led me to believe the Suns won’t pay the tax this season & instead wait for what is coming in upcoming years.
Chris Paul’s contract can technically go up, down or stay flat. I believe a flat $30 Million per year makes the most sense for the Suns current & future objectives.
Phoenix recently traded their 2021 Draft Pick & Jevon Carter for Landry Shamet.
Post this hypothetical CP3 signing, the Suns are left with $25,870,483 to spend below the Luxury Tax line & 6 roster spots to fill.
Point Guard - The priority here is Cam Payne. As discussed last time around, the Suns are limited to a maximum of $10,500,000 as the starting salary & don’t have a lot of options to replace Payne if he decides to sign elsewhere. Even still, the Suns will hope to land Payne for something along the lines of 3 years & $24,000,000. Let’s go with a return of E’Twaun Moore on a Veteran Minimum contract as the 3rd stringer.
Shooting Guard - With Shamet coming in as a legitimate backup SG to Devin Booker, perhaps Paul can convince his NBPA Vice President - Garrett Temple - to join him on the Suns? The 35 year old would be another veteran presence on a minimum deal.
Small Forward - Reggie Bullock might be my favourite FA target for the Suns. Phoenix could target Bullock with their full MLE, which it would likely take given the Knicks cap situation. Bullock’s versatility across the wing, providing shooting & defense is really enticing. Would Torrey Craig return for the minimum too? Abdel Nader if not.
Power Forward - No changes necessary. At least for now. Cam Johnson is ready to eat up the majority of the minutes at PF, with Dario Saric the injured third reserve. The Suns could hold onto that DPE in case of a future emergency. There’s room below the Apron to do so.
Center - Phoenix could do a lot worse than offering part of their MLE or the BAE to Nerlens Noel. The temptation here would be to get a big that offers a different look to Deandre Ayton but by going this route, the Suns can look for 48 minutes of identical play. Hopefully Jalen Smith is ready to soak up any further minutes in his 2nd season.
So there you have it, Suns fans.
By taking advantage of a loophole within a loophole, the Suns can achieve what seemed like an impossible task. Phoenix can meet CP3s asking price, bring Payne back & add meaningful pieces to the rotation by way of a various exceptions. And all while avoiding the Luxury Tax for the 2021/22 NBA Season. Sound good?
(You may have noticed the total salary bill above is *slightly* higher than the Luxury Tax threshold. Two things - it’s minimal enough that Phoenix will be able to duck under by being smart with 1 or 2 of the exceptions they use & also, little known fact - the Luxury Tax isn’t actually calculated until season’s end. Not at the beginning.)
You’ve been warned.
If you see an announcement that Chris Paul & the Phoenix Suns have reunited on a rather large contract over 4 years, don’t panic. Just be happy.
The Four Point Play here, reporting from the future - the Point God is back & he’s going to have a helluva team behind him.
Overtime!
If you are still thirsty for more Suns content after reading through that, check out the below:
Sam Cooper’s video breakdown of Nerlens Noel as a potential FA.
Kellan Olson’s words on the Landry Shamet trade & draft night.
Zona Hoops’ list of potential Free Agent targets.
Great article, as always, David! Love your newsletter and is definitely my go to for Suns off-season and gameplay breakdowns.