The Toronto Raptors bet that Fred VanVleet would become a useful NBA player and were rewarded last season when the undrafted, under-sized point guard exceeded anyone’s reasonable expectations about what his impact could be — anyone except perhaps VanVleet.
Now it’s time for the fan favourite to get his reward.
At some point before June 30th the Raptors will make VanVleet a qualifying offer of $1.7 million for one season, which represents 125 per cent of his 2017-18 salary, the most Toronto can offer under the terms of the Collective Bargaining Agreement.
VanVleet will (almost certainly) politely decline the offer and become a restricted free agent, confident that even in a tight market there is more money and term available for him.
As usual, he’ll bet right.
While Raptors president Masai Ujiri and general manager Bobby Webster haven’t broadcast their strategy, they have broadcast their affection for VanVleet, sending the signal across the league that they’ll exercise their right to match any offer sheets teams might make to their point guard.
“I don’t know what the rules are with that,” Ujiri said when asked about VanVleet’s contract status earlier this month. “I don’t want to get into trouble but I love Freddie. I hope I don’t get fined for saying that but I love Freddie. He’s our player and I love him. Whatever it is, Freddie knows we love him.”
The Raptors will express their affection by offering VanVleet a massive raise on the $1.3 million he earned last year.
How big a raise? That’s where the strategy will come in. The highest they can go is a four-year deal for $36.9 million because they hold VanVleet’s Early Bird rights and can only offer him 1.05 per cent of the league average salary for 2017-18, plus annual raises of eight per cent of the first-year salary. His deal would start at something in the range of $8.24 million.
And barring anything unlikely or unforeseen, the 24-year-old will sign the deal and resume his role as the Raptors sixth man, charged with running the so-called bench mob and riding shotgun alongside Kyle Lowry and DeMar DeRozan in crunch time, providing both steady play-making; smart and determined on-the-ball defence and deadly three-point shooting.
VanVleet’s motto is ‘bet on yourself’ but at some point you have to cash in your chips and making it from undrafted rookie to a life-changing contract in three years is the right time.
It also helps that the Raptors believe that VanVleet recognizes he’s in a good situation with Toronto – a prominent role with a winning team that recognizes the contributions he makes are valued well beyond what his box score line may indicate.
So VanVleet – the Raptors only rotation player not under contract past this season at the moment – will be a Raptor next season.
Book it. Almost.
There are, a few potential wrinkles, however unlikely.
As a (restricted) free agent heading into his third season that wasn’t taken in the first round in his draft year, VanVleet is subject to the Gilbert Arenas Provision which helps prevent teams from poaching players in his situation with aggressive offer sheets that the incumbent teams don’t have the cap space to match.
As a result the most a team can promise VanVleet on an offer sheet is the ‘non-tax-payer mid-level exception’ – estimated to be $8.5y million for 2018-19 with a raise of five per cent in year two (about $9 million).
So far, so good. The Raptors are in the ballpark, no problem.
The challenge becomes if a team wants VanVleet badly enough to backload their offer in years three and four, when they can bump him up all the way to his max salary slot, which in today’s dollars would be about $25 million a year.
All of a sudden VanVleet could be looking at a four-year deal for $75 million. The Raptors can’t match that and nor would they want to: recent NBA history is littered with examples of teams matching hyper-aggressive offer sheets and regretting it: it’s how Allen Crabbe got a $75 million deal from the Portland Trailblazers or Tyler Johnson got $50 million from the Miami Heat.
But even if another team didn’t want to be quite that aggressive, they could put together a deal worth more than the $36.9 million the Raptors can – and keep in mind Toronto is very likely hoping that in flat salary cap environment with a surplus of point guards that they can get VanVleet a lot more cheaply than that.
There are some caveats for a team trying to scoop VanVleet.
The ‘new’ team must have current cap space available that equals average annual value of the deal. So a team willing to pay VanVleet $75 million would need to have $18.75 million in current cap space, even though the first year of the deal would be worth ‘only’ the estimated mid-level exception, about $8.57 million. A team offering $48 million over four years would need to have $12 million in cap space, and so on.
The Raptors will want to keep VanVleet as economically reasonable as possible given they could end up having to pay luxury taxes on the deal if they can’t find a way to shed salary as they are about $5.7 million over the luxury-tax threshold before signing any new deals.
They should be helped in that regard because there are only about six teams that project to have significant cap space for VanVleet and half of those will be keeping their powder dry for their turn in the LeBron James sweepstakes. The others are Dallas, Atlanta and Brooklyn, and Dallas may well be out of the market given they have their own RFA in Yogi Ferrell, second-year point guard Dennis Smith and having just acquired forward Luca Doncic on draft night. That leaves the Atlanta Hawks and Brooklyn Nets who could be looking for quality at the point. Could either of them put together a four-year offer in the $40-50 million range?
In free agency it only takes one team to create a market.
Either way VanVleet is about to get a big raise. Betting on himself paid off.