Fresh off a loss to the Dallas Mavericks in the first round of the 2024 NBA playoffs, the Los Angeles Clippers are rapidly approaching an organizational fork in the road.
The Clippers signed Kawhi Leonard to a three-year, $149.5 million extension in January, but James Harden is set to become an unrestricted free agent this offseason, and fellow star Paul George appears highly likely to join him. George is eligible to sign an extension with the Clippers through June 30, but he can otherwise become a free agent by declining his $48.8 million player option for the 2024-25 season.
During his end-of-season press conference, Clippers president Lawrence Frank confirmed that he's hoping to re-sign both George and Harden this offseason. However, he stopped short of guaranteeing that the Clippers would break the bank for both players.
"We want Paul, we value Paul," Frank said. "Paul's done some tremendous things here. He's an elite player, and our biggest thing is we always want to be able to treat players well and pay them fairly, and we also have to build out a team, especially, this is a new CBA."
In recent days, it's become clear what the Clippers' limit is for the time being. Both Keith Pompey of the Philadelphia Inquirer and Kevin O'Connor of The Ringer reported that they aren't offering George more than the exact same extension they gave Leonard. He's eligible to sign a four-year deal worth up to $221.1 million with them or $212.2 million with another team in free agency.
The Philadelphia 76ers lurk as a legitimate threat to offer George a full four-year max deal, and the Clippers would have no way to replace him in free agency if he leaves. If/when P.J. Tucker picks up his $11.5 million player option, the Clippers will have nearly $114 million in guaranteed salary on their books. That would leave them around $27 million below the projected $141 million salary cap before they re-signed either George or James Harden.
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At most, the Clippers might gain access to the $12.9 million non-taxpayer mid-level exception if they re-sign Harden and George walks in free agency. With that in mind, why aren't they willing to offer him more if the alternative is losing him for nothing?
It's because they're planning for both next year and beyond.
If George signed a max deal with the Clippers, he'd earn a projected $49.4 million next year, $53.3 million in 2025-26, $57.2 million in 2026-27 and $61.2 million in 2027-28. Leonard is set to earn 35% of the salary cap in 2024-25—the same $49.4 million that George can receive—but he doesn't have the typical 8% annual raises in his new extension. He only bumps up to $50.0 million in 2025-26 and $50.3 million in 2026-27.
In terms of salary-cap percentage, George would be earning 34.3% of the projected cap in 2025-26 on a max deal, while Leonard will earn only 32.2%. In 2026-27, George would be at 33.6%, while Leonard will be at 29.4%. That might not seem like a huge difference, but $3 million in savings in 2025-26 and more than $7 million in 2026-27 could meaningfully impact the Clippers' ability to shuffle their supporting cast down the line.
Based on recent reports about the NBA's next national TV contracts, the salary cap appears poised to rise by 10%—the maximum amount that the new collective bargaining agreement allows it to—every year beginning in 2025-26. Even if George signs a max deal, the 10% cap growth will outpace his 8% annual raises, particularly since his raises aren't compounding while the cap growth is. However, Leonard's minuscule raises over those two seasons would be an even greater competitive advantage if George and Harden followed suit on their next respective contracts.
If the salary cap does rise a full 10% in 2025-26 and 2026-27, it would jump to $155.1 million in the former and $170.6 million in the latter. More importantly, the second apron would jump up to $208.4 million in 2025-26 and $229.3 million in 2026-27. If George, Harden and Leonard combined to earn roughly $150 million in 2026-27, the Clippers would have nearly $80 million in flexibility to round out their supporting cast before surpassing the second apron.
The Clippers project to be over the second apron next season if they re-sign both George and Harden, but Leonard, Norman Powell and 2023 first-round pick Kobe Brown are the only players whom they have under contract beyond 2024-25. If they run back the same core next season and don't go on a deep playoff run, they could set themselves up for a hard reset in 2025.
Even if they can't get out of the second apron by 2025-26, the Clippers should easily be able to get under it by 2026-27 as long as they don't sign George and Harden to full max contracts this offseason. That's likely why they're being so selective with how much they're offering George rather than just giving him a full four-year max deal. They'll want as much flexibility as possible to retool the roster toward the tail end of this window, so the less Harden and George earn in the final few seasons of their new respective deals, the better.
If the Clippers do re-sign both and go over the second apron in 2024-25, they won't have any mid-level exception in free agency, won't be able to take back more salary in a trade than they send out, and won't be able to aggregate contracts in trades (i.e., trading a $15 million salary and a $10 million salary for a $25 million salary). They'll largely be locked into their current core, although they'll make moves around the fringes of the roster.
The salary-matching restriction applies to teams over the first apron as well, but those teams can at least aggregate contracts in trades and will have the taxpayer mid-level exception in free agency. The Clippers would still largely revolve around Leonard, George and Harden, but they'd have a few more mechanisms to use on their supporting cast.
When push comes to shove, the Clippers might decide to match whatever the Sixers or another suitor are willing to offer George, even if it's a four-year max. Losing him for nothing in free agency might be a complete non-starter for them. Worst-case scenario, they could always try to flip him as early as next year's trade deadline.
But if you're wondering why the Clippers aren't rolling out the red carpet and offering George whatever he wants, look no further than the new CBA.
Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM. All odds via FanDuel Sportsbook.
