What Happens If Jusuf Nurkic Takes the Qualifying Offer?

With the 2018 NBA Draft in the rear-view mirror, the league calendar turns towards free agency and trade season. Among prospective free agents this summer stands Jusuf Nurkic, 7-foot pivot for the Portland Trail Blazers. Entering his fifth NBA season, Nurkic is eligible for restricted free agency, which usually means entertaining contract offers from opposing team which the Blazers have the right to match. As July approaches, NBA media are starting to speculate that a long-term deal may not be on Nurkic’s plate, at least not this summer. He may end up playing for a one-year qualifying offer which, while low in dollar value, would leave him an unrestricted free agent in the Summer of 2019.

On his weekly podcast, in the midst of general discussion about RFA’s (beginning at the 29:00 mark), ESPN analyst Zach Lowe broached the subject of Nurkic’s free agency, saying:

I think Nurkic is going to take his qualifying offer. Nurkic turned down A LOT of money in October... Who’s offering Nurkic more than the mid-level? What’s the team? Nobody needs centers and there’s no cap room.

Though a restricted free agent opting for a single-year, bargain-basement deal is a relatively rare move, it may make sense under certain conditions for Nurkic and the Blazers.

What is the Qualifying Offer?

The Qualifying Offer is a single-year deal, offered by the incumbent team of a soon-to-be fifth year player. The amount is preset, based on the level of a player’s current compensation. In essence, it become a fifth, and final, year of that player’s rookie contract, representing the lowest baseline for which that free agent will play the following season.

The incumbent team must extend the Qualifying Offer before June 29th of the summer following the player’s fourth season. If they fail to do so, the player becomes an unrestricted free agent and the team loses the right to match his contract offers.

The free agent does not have to sign the offer...in fact in most cases he won’t. Instead he and his agent keep that offer in their back pockets as they go out and solicit better offers from other franchises. If they sign an offer sheet with another team, that offer sheet replaces the Qualifying Offer and the incumbent team has the option to match the new offer sheet to retain the player’s services. This is the scenario most people associate with restricted free agency.

Sometimes a player receives no acceptable offers on the market. Other times players deem it to their advantage not to sign a longer offer sheet even if they receive one. In these cases, the player has the option to reject all other offers and just sign the original Qualifying Offer. This takes him off the market and keeps him with his incumbent team for one more year. After that he enters free agency again, unrestricted, the following summer.

A team extending a Qualifying Offer does not mean that the player will accept that offer, nor that the team wants him to. Signing it is an option.

Jusuf Nurkic’s Qualifying Offer is worth $4.75 million. Assuming the Blazers tender it, Nurkic will have the option to play for that amount next year. If he gets no other offers, it’ll become his only option. Otherwise, he’ll have to choose between signing an offer sheet from another team, negotiating a completely different offer with Portland, or inking that one-year Qualifying Offer and playing out the string.

The Cap Implications for Portland

Nurkic signing with the Blazers for just one year at $4.75 million sounds like a financial dream. As it turns out, the actual effect won’t be huge except with regards to the luxury tax.

The Blazers will owe $110.5 million in salaries next year without any of their incumbent free agents, including Nurkic. With the Luxury Tax line hovering just north of $120 million, getting Nurkic for $4.75 million would help them avoid onerous penalties. The Qualifying Offer would push their cap obligation to $115 million, give or take. Only 9 players would be accounted for, but with current low-level deals among their end-of-bench players and draftees, they’d squeeze in right around the tax line. Any significant Nurkic signing would surely push them over the tax threshold and, combined with other signings or re-signings, could even push them past the tax apron that restricts further moves.

This is significant for Portland’s bottom line, but the effect shouldn’t be overstated. Barring a salary-dumping trade...

• Nurkic signing the Qualifying Offer will not give Portland any flexibility to sign free agents or add salary this summer. Even with a cheaply-signed Nurkic on board, the Blazers would still be way over-capped, standing right at the tax threshold.
• The situation will not improve much in the Summer of 2019, when Nurkic would become an unrestricted free agent. Portland owes $103.8 million in guaranteed salary that summer already. That will rise to $115 million if they want to keep Zach Collins, Caleb Swanigan, and their 2018/2019 draftees. Signing Nurkic to a longer, more expensive deal in 2019 would certainly push them over the tax threshold. Signing the Qualifying Offer this summer delays the onset of tax hell, but it does not solve the problem unless they intend to part ways with him next summer.

(Pro Tip: Read those points again carefully and commit them to memory. I guarantee media and fans alike will paint the Qualifying Offer as a flexibility or cap-space saving move. It is neither. At best it’s a tax dodge...understandable, but not a long-term solution.)

Why the Qualifying Offer Might Make Sense

Despite not being a miracle cure, three scenarios could make the Qualifying Offer attractive for Nurkic, the Blazers, or both.

1. If nobody else offers Nurkic a contract or he thinks he can earn more by playing another year, then testing unrestricted free agency in 2019, the Qualifying Offer becomes attractive. The threat of the incumbent franchise matching tends to mute offers to restricted free agents. Nurkic and his agent may consider next summer’s grass greener.
2. Perhaps the Blazers just aren’t that into him? Saving a few million is great, but hardly franchise-changing. If they value Nurkic highly, Portland willnot want to lowball an offer this year, then watch him walk into the open market next summer. If they are willing to take his negotiations to the precipice—low-key insulting him along the way by not offering better terms—they’re probably willing to watch him leave. Portland is free to negotiate Nurkic into a longer, more expensive contract right now. Sticking with the Qualifying Offer would signal they’re interested in him more as a stopgap rental than a franchise cornerstone. Anthony Davis wouldn’t be left mulling a Qualifying Offer; he’d already be extended.
3. Portland could take advantage of Nurkic as an attractively-priced trade chip next season. Pairing Moe Harkless with Evan Turner creates a bad salary situation for potential trade partners. Pairing Harkless with Zach Collins costs Portland one of their significant future assets. Offering Harkless alone doesn’t buy much in return. Harkless along with a cheap Nurkic may hit the “just right” zone of talent and dollars. It’s worth noting that Nurkic would need to consent to any such trade and that the receiving team wouldn’t get full Bird Rights to re-sign him in 2019.

It’s perfectly possible for all three factors to come into play at once. Nurkic may want a bigger contract than the Blazers are willing to commit to. Portland could take a flyer for one more season with an eye to trading him in the interim, walking away next year without prejudice if they can’t get a deal done.

One thing remains true no matter what factors are in play: Nurkic signing for the Qualifying Offer does not bode well for his future with the Blazers. Absent a trade, signing him to a long-term deal will send them into tax territory no matter what. If they want him long-term, it’d make more sense to get that deal inked now. The market is low, they don’t risk losing him next summer, and the contract would terminate around the same time as Damian Lillard and CJ McCollum. If the two parties aren’t coming to terms, they don’t want to. Whether that’s on Nurkic or the franchise doesn’t matter. It foreshadows him moving on once the year is finished, if not before.

—Dave / @davedeckard / @blazersedge / blazersub@gmail.com