Myles Turner and the Indiana Pacers have agreed to a renegotiation-and-extension that adds two new seasons and nearly $60 million to his contract. Since the renegotiation-and-extension occurs rarely in the NBA (the last one was Robert Covington and the 76ers in November 2017) and Turner’s name has loomed large in trade deadline discussions, it’s worth delving into what this means for everyone involved and why it could be a successful move for both player and franchise.
How this works
The NBA’s collective bargaining agreement allows for some contracts to be renegotiated before they expire, but the restrictive rules and regulations surrounding it make the actual cases far rarer than in the NFL and other leagues. Most notably, NBA teams and players can only renegotiate a contract to pay a player more money in the years he was already under contract, preventing negotiations in which a general manager threatens to cut a player unless he reduces his salary. Additionally, any increase in a player’s salary via renegotiation can only come via cap space, so the team in question has to possess that cap space at the time and be willing to use it for this purpose.
The Pacers and Turner agreed to increase his salary for the current season from $18 million to $35 million, a move which required $17 million of Indiana’s cap space. That could have been the entire transaction, but the sides also agreed to build an extension of that new salary figure. The CBA allows for a far larger year-to-year decrease in the first new season of an extension, so Turner and the Pacers used that to their advantage, dropping his salary to a reported $20.9 million in 2023-24 and $19.9 million in 2024. -25.
The deal for Turner
Turner eschewed free agency but did so for a pretty significant payday: Nearly $60 million in new money through 2025 is likely more per year than he would have received on the open market, even though his combination of rim protection and perimeter shooting is uncommon. That said, the 26-year-old Turner could have signed a longer-term contract as an unrestricted free agent, which could end up being the correct decision considering his injury history (time will have to tell). He’ll now hit free agency in 2025 shortly after his 28th birthday, so potential suitors should be more excited about giving him a big deal than they would have been years later if he signed a longer contract this July. Plus, there is the added variable of how the NBA’s next national TV deal will change the salary cap and negotiations down the line, which Turner could benefit from.
One other perk for Turner is that the extra $17 million for this season comes into his bank account earlier than waiting for unrestricted free agency and likely receiving a back-loaded contract that would have paid him higher salaries deeper into the future. The time value of money is a real thing Turner will benefit from with this renegotiation-and-extension. Signing now also transfers significant risk from Turner to the Pacers and allows him not to stress out about how what happens over the rest of this season affects him in July.
The deal for the Pacers
While this is not the proper description of the transaction using CBA language, one way to summarize this signing is that the Pacers used current cap space to give Turner a $17 million signing bonus out front of a two-year, $40.8 million contract. That approach wipes away that $17 million that could have been part of deals at the deadline or early offseason (trades can happen this league year until July 1, although many players cannot be traded in that June window), but odds are the Pacers were not going to squeeze out a massive return with that space, especially since the Spurs are still out there with around $27 million in space to make deals happen.
Structuring Turner’s contract in this way has a few significant benefits for the Pacers. First, it maximizes his salary in a season in which their spending power was not doing a ton (though it conceptually could have at the deadline) in exchange for a lower salary in 2023-24 and 2024-25. That is particularly notable for 2024-25 because that is when Tyrese Haliburton’s huge raise will kick in, whether that comes via extension or restricted free agency. On top of that, Turner’s $20.9 million salary for next season is reasonable enough that Pacers exec Kevin Pritchard will still have significant cap space in July, likely around $35 million depending on where their draft pick ends up. That is enough for significant additions, and they should be able to sign someone to a multi-season contract without eventually running into luxury-tax trouble unless Isaiah Jackson’s and Aaron Nesmith’s next contracts are richer than expected. That would likely be a good problem for the Pacers because it would mean those two played well enough to deserve big deals.
In addition, Turner’s next two seasons are very reasonable numbers if the Pacers want to trade him. I’m sure Turner is tired of being heavily discussed every January, but that probably won’t change for 2024 or 2025, although he has about 60 million reasons for it to bother him less than it did previously. This structure allows Pritchard and the front office to take the next year-plus to not only evaluate their roster’s competitiveness but also Jackson’s development without having to make a decision if they don’t want to.
Can Turner still be traded?
The most compelling (but potentially least impactful) part of this over the next two weeks is that, as a technical matter, this renegotiation-and-extension does not prevent the Pacers from trading Turner at the Feb. 9 deadline. While there are specific thresholds on extensions that create a six-month trade restriction, only adding two new seasons and fitting within the extension-and-trade rules means Turner is still trade-eligible.
There is an important difference, however, between being trade-eligible and actually being on the trade block, and that is likely the more salient point here. Some suitors may actually prefer Turner on this contract because it provides more team control, but the Pacers would need to be willing to make that deal, and it’s possible if not probable that they and Turner have an understanding about his status for at least this deadline.
Is it possible Turner and the Pacers agreed to this either leaving the door open for or even actively facilitating a trade between now and the deadline? Sure. Do I expect that was the case? Probably not.
Both Turner and the Pacers made reasonable, proactive decisions to make this happen, and ideally, both sides will benefit from it.
(Photo of Myles Turner: Trevor Ruszkowski / USA Today)
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