Philadelphia 76ers guard James Harden has until June 29 to decide whether to pick up his $47.4 million player option for the 2022-23 NBA season or decline it to become an unrestricted free agent. His decision will shape the course of the Sixers’ offseason plans either way.
For that reason, the Sixers should hope he declines his player option and is willing to re-sign for less than the maximum salary he’s allowed to earn.
The Sixers currently have $96.1 million committed to 11 players next season. If they keep the No. 23 pick and spend it on someone whom they roster next season—ie, not a draft-and-stash player—that rookie will have a $2.5 million cap hit, bringing the Sixers’ total to $98.6 million for 12 players.
Based on the current projections of a $122 million salary cap and $149 million luxury-tax threshold next season, the luxury-tax apron will come in just shy of $155.7 million. Teams can’t cross that line at any point in a season if they use the non-taxpayer mid-level exception ($10.3 million next season), the bi-annual exception ($4.1 million) or receive a player in a sign-and- trade. If a team does cross the apron, it can only sign players via the taxpayer mid-level exception ($6.4 million) or veteran-minimum deals ($1.8 million).
If Harden picks up his $47.4 million player option and the Sixers don’t trade the No. 23 pick, the Sixers would have roughly $146 million committed to 13 players. They’d have less than $9.7 million in wiggle room before hitting the apron, which means they wouldn’t have access to the full non-taxpayer MLE. At that point, they would be better off restricting themselves to the smaller $6.4 million taxpayer MLE to avoid being hard-capped.
In that scenario, the Sixers might consider guaranteeing Danny Green’s $10 million salary even though he’s likely to miss most if not all of next season with a torn ACL and LCL. Although those injured will rob him of any standalone trade value, the Sixers could package him either with the No. 23 overall pick or one of their players to bring back a bigger contract.
Teams can only receive a certain amount of salary in a trade based on how much they send out. Any teams over the luxury-tax threshold can take back only 125 percent of the salary they trade away, plus $100,000. By packaging Green with Furkan Korkmaz ($5 million) or Matisse Thybulle ($4.4 million), the Sixers could receive a player earning around $18-19 million next season, and they’d still have their taxpayer MLE to spend in free agency, too.
The Sixers could have far more financial flexibility if Harden opts out, though.
As a free agent, Harden’s starting salary next year can be no higher than $46.5 million, or 105 percent of his salary from this past season ($44.3 million). He can sign a five-year, roughly $270 million contract regardless of whether he opts out or picks up his player option, although the Sixers aren’t likely to offer him a full five-year max deal either way.
“I think at this point, nobody in the NBA believes that the 76ers are going to give James Harden a max contract,” ESPN’s Brian Windhorst reported in mid-May. “So the question is, what is he willing to do?”
The Sixers should hope Harden is willing to follow in the footsteps of his former teammate, Chris Paul, who declined a $44 million player option last summer to sign a four-year, $120 million contract with only $75 million guaranteed. Harden might not be willing to take that much of a discount—Paul was 36 when he signed his new deal, while Harden turns 33 in August—but even taking a few million less than his max salary next season could give the Sixers access to the full non-taxpayer MLE and bi- annual exception.
If the Sixers add the No. 23 overall pick, the full $10.3 million non-taxpayer MLE and the $4.1 million bi-annual exception to the players they already have under contract for next season, they’d be at $113 million committed to 14 players . That means Harden could receive up to roughly $42.7 million as his starting salary on a new contract before the Sixers crossed the apron and ran afoul of the hard cap.
The Sixers should prefer a bit more flexibility than that, as being unable to exceed the apron could limit the types of midseason trades and signings they could pull off. Ideally, Harden would take no more than $40 million as his starting salary in 2022-23, which would give them a few million in wiggle room under the hard cap.
Either way, the financial benefit isn’t the only appealing aspect of a Harden opt-out. Signing him to a multiyear contract in early July would allow the Sixers to present a clear long-term vision to their free-agent targets.
If Harden picks up his player option, he can’t officially sign a three- or four-year extension until Aug. 10 at the earliest. Free agency begins at 6 pm ET on June 30, so the Sixers would have to execute the rest of their offseason plans before locking Harden in beyond 2022-23. That long-term uncertainty might deter some free agents from choosing the Sixers’ offer over roughly equivalent contracts elsewhere.
If Harden and the Sixers can’t agree upon terms of an extension, he might instead elect to pick up his player option and play out the final year of his contract before becoming an unrestricted free agent in 2023. That might devolve into a yearlong distraction that could derail the Sixers’ season before it ever got off the ground. (The Brooklyn Nets, who now own the Sixers’ unprotected 2023 first-round pick, are certainly rooting for that outcome.)
Team president Daryl Morey and the rest of the Sixers’ front office have roughly three weeks to convince Harden that opting out and re-signing for less than a full five-year max will best enable them to build a championship-caliber supporting cast around him . Otherwise, he might short-circuit their offseason plans before free agency even begins.