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Pascal Siakam and the Rookie Scale Extension

With the Kawhi Leonard sweepstakes in the past, the Toronto Raptors are proceeding ahead to build their team for the future. After adding depth to their roster with the acquisitions of Terence Davis and Rondae Hollis-Jefferson, the Raptors will turn their attention to contract extensions. The most impactful being last season’s Most Improved Player, Pascal Siakam.

At 25 years old, Siakam has the opportunity to become the focal point asset for the Raptors. His ability to be a tough, physical defender was highlighted on a consistent basis during the Raptors championship run. Over the course of last season, Siakam became more comfortable shooting in the paint, as well as from beyond the arc.

                                                    Pascal Siakam Career Stats 
2016-17 2017-18 2018-19
PPG 4.2 7.3 16.9
RPG 3.4 4.5 6.9
APG 0.3 2 3.1

(table from: Basketball Reference)

Given his upward trajectory over his three years in the NBA, there are no signs of the young power forward slowing down. For Raptors President Masai Ujiri, Siakam has exhibited tangible improvement from his days at the Basketball Without Borders camp.

“He wants to be a star,” affirmed Masai. “We all used to hold our breath when he took a 3-point shot. We all used to hold our breath sometimes when he went on the fast break. And now we can’t wait until he does that.”

Below is the 2019-2020 salary cap table for the Raptors:

Active Roster Cap  $           115,803,288
Dead Money  $                1,000,000
Cap Holds  $             37,815,796
Total Cap Allocations  $           116,803,288
2019 NBA Salary Cap Max  $           109,140,000
Cap Max Space -$               7,663,288

(table by: Spotrac)

This off-season, Masai has two options regarding Pascal Siakam’s contract situation:

  • Sign Pascal to a rookie-scale extension.
  • Wait until next off-season to sign Pascal to a max contract.

Entering the 2019-20 season, Siakam is in the final year of his rookie contract, earning $2.5 million. Rookie contracts are two years in length, with an additional two years designated as team options. With Siakam about to play in his fourth year, he is eligible for a rookie scale extension before the season starts.

Under the current Collective Bargaining Agreement, the “designated player rule” allows for players entering the fourth year of their rookie contract to sign a rookie scale extension, up to five years. The contract extension would be worth 25% of the cap in the first year of the deal.  The player’s salary could rise to 30% of the cap  if one of the fifth year criteria is met:

  • The player was named to the All-NBA First, Second or Third team in the most recent season, or both of the previous two seasons.
  • The player was named the Defensive Player of the Year in the most recent season, or both of the preceding two seasons.
  • The player was named the NBA Most Valuable Player in any of the three most recent seasons.

With the NBA’s salary cap being $109.1 million for the upcoming season, and projected to be $116 million in 2020-21 when the contract kicks in, the maximum salary that Siakam could earn is $170 million over five years. The highest possible raise for Siakam would be 8% of the salary in the first season, totaling $2.7 million.  The pending decision for the Raptors would be the term of the rookie scale extension on Siakam. Given the productive path Siakam is on, he should definitely be considered for the maximum rookie scale extension.

If given the max extension, Siakam would be consistent with other players who are eligible for rookie scale extensions. Recently, Philadelphia 76ers guard Ben Simmons agreed to a five-year extension, worth $170 million. Canadian guard Jamal Murray agreed to a five-year, $170 million contract extension with the Denver Nuggets, after posting a career-high 18.2 points, 4.2 rebounds, 4.8 assists with shooting 44% from the field. Below is the breakdown of Murray’s contract, starting in 2020-21:

2020-21  $29.3 M
2021-22  $31.6 M
2022-23  $33.9 M
2023-24  $36.3 M
2024-25  $36.6 M

(table by NBA.com)

Alternatively, the Raptors could wait and see Siakam’s 2019-20 season, before signing a contract next offseason. The max contract would be five years, worth 25 percent of the 2020-21 salary cap. However, this option would not be the most optimal for Raptors management to pursue. Siakam would become a restricted free agent, meaning there is a possibility that both sides wouldn’t agree on a new contract. As a result, other teams could offer sheet Siakam, forcing the Raptors to match the contract or let him go. Raptors management would have less cap space to spend on pending unrestricted free agents if they were to match a Siakam offer sheet.

This is why it is in the Raptors best interest to sign Pascal Siakam for the max rookie scale extension. With the contracts for Kyle Lowry, Marc Gasol, Serge Ibaka and Fred VanVleet expiring after this season, the Raptors will have almost $90 million in cap space next offseason. By signing Siakam during this free agency period, it secures the Raptors’ franchise player for the future. With a breakout postseason averaging 19 points and 7.1 rebounds, it is ideal for the Raptors to sign Siakam now when his market value is optimal, before allocating the incoming cap space to unrestricted free agents.

Only three years in the NBA, Pascal Siakam has shown improvement. Entering the prime years of his career, the Raptors franchise is hopeful that Siakam can become a perennial all-star in this league. Despite Pascal’s recent success, there is a risk that he has plateaued. He is getting older and by signing a long-term deal, the Raptors risk investing money into a player who has already reached his maximum potential.

That being said, the upside is not only having a great shooter and dominant post player, but also the unifying leader for a young team. A gamble worth taking on Pascal Siakam as the Raptors build for the future.

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