This feels insane given that he’s not a free agent until 2021, but it’s time to start talking about Damian Lillard’s next maximum contract extension with the Portland Trail Blazers.
Specifically, if Lillard makes the All-NBA team again this season or next season (or wins the MVP!) he will be eligible to sign a Designated Veteran Player Extension, colloquially known as a “super max,” in 2020.
Lillard will have eight years of experience in 2020, which normally limits a player to 30 percent of the salary cap, but he supermax gives him the option to sign a deal for 35 percent of the cap. In raw numbers, conservatively assuming a $118 million salary cap for 2021-22, Lillard can earn about $239.5 million with a supermax, but $205.3 million with a regular extension.
If Dame makes all-NBA next year he can sign "super max" (i.e. up to 35% of cap, up to 5 years) extension in 2019 OR 2020 b/c:— Eric Griffith (@EricG_NBA) September 7, 2018
☑️Played for only one team
☑️Made all-NBA in prior season or 2 of last 3
☑️7 or 8 seasons of service when deal is signed
Huge storyline to watch
Astute readers will notice that Lillard made the All-NBA team the last two seasons and will have two years left on his contract next summer, which already makes him eligible to sign a supermax in 2019.
But next summer he will be limited to a four year extension, one less than the five year maximum, because NBA contracts cannot exceed six total seasons (i.e. he will still have the 2019-20 and 2020-21 seasons on his current deal so he can only add four seasons onto the back end). Given that the last year of a five-year extension will exceed $50 million, it’s unlikely Lillard will take this option.
Also note that total contract length cannot exceed 6 years, so if he signs the extension next year he can only add four years on to his current deal. If he wants until summer of 2020 he can add the full five years.— Eric Griffith (@EricG_NBA) September 7, 2018
If Lillard chooses to wait, he could also sign a deal for 35 percent of the cap in 2021, but he would need to make the All-NBA in 2021 OR 2019 and 2020 to be eligible for the supermax.
While offering the extension to Lillard is almost certainly a no-brainer for the Blazers, the financial impact of the deal will be significant.
Salary cap estimate for 2020-21 is at $116M per ESPN on 6/30. Let's assume '21-'22 cap is $118M w/max 8% raises. Would put Lillard's supermax salary at: 21-22: $41.3M— Eric Griffith (@EricG_NBA) September 7, 2018
He'll be 35 when that contract expires https://t.co/WD2liF9dAP
Because NBA contracts allow eight percent raises, Lillard’s hypothetical deal would likely be for even more than 35 percent of the cap by the time it concludes.
Here's where it gets interesting: From '16-'17 (1st year after TV spike) to '20-'21 cap expected to increase from $94M to about $116M -- 23%.— Eric Griffith (@EricG_NBA) September 7, 2018
Assume similar 23% from '21-'22 to '25-26, and Dame's contract will be 37.5% of cap space. Even more if 2021 cap is higher than $118M.
If the cap increases stall at any point during the early-mid 2020s, as they did from 2009-14, Lillard’s contract has the potential to explode to more than forty percent of the Blazers’ total payroll.
With that said, it’s not a slam dunk that Lillard signs the long term extension. If he has any fears about the Blazers’ long term future he could choose to sign a one-year extension in 2021, bridging over into 10 years of experience, and then sign a 35 percent free agent contract with any team in the NBA.
Future scenario to watch with Dame: After current deal expires in 2021 he will have 9 years of exp. He could sign a 1-year deal with Blazers for 35% & go into FA in 2022 with 10 years of exp. Then any team could pay him 35%. Blazers would have no leverage re: $$$ amount.— Eric Griffith (@EricG_NBA) September 18, 2018
Lillard would be on the “wrong” side of 30 at that point, so it would be a risky move, but could serve as a nuclear option if he is undecided about the team’s prospects when his current deal expires.
Either way, this season will be extremely important for Lillard. If he makes a third consecutive All-NBA team he automatically becomes eligible for the coveted five year supermax extension in 2020, giving him maximum flexibility as his current deal winds down.
Year-by-year summary of Lillard’s options:
2019: Already eligible for supermax extension of up to 35 percent of the cap and FOUR years.
2020: Can extend for up to 35 percent and FIVE years if he makes All-NBA in 2019 OR 2020.
2021: Can sign a new contract for up to 35 percent and five years with the Blazers if he makes All-NBA in 2021 OR 2019 and 2020. Otherwise he can sign for up to 30 percent of the cap with any team.
2022: Can sign a new contract for up to 35 percent of the salary cap with any NBA team.