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Thompson, whose representatives stated would play for nothing less than a maximum contract, agreed to a five-year, $82 million deal on Wednesday that is a shade above the five-year, $80 million offer that the Cavs had been offering all along (and, according to one report, took away after Thompson refused to play for his $6.8 qualifying offer).
Had he taken that QO, Thompson could have ridden out the season with the Cavaliers prior to making his debut as an unrestricted free agent next July. Had he held out the entire 2015-16 season, Thompson would give up a year’s worth of salary, and become a restricted free agent all over again in 2016. As such, sanity prevailed.
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First, the news from Chris Haynes, who was the first to break the story:
League sources informed Northeast Ohio Media Group that the two sides agreed Wednesday to a five-year, $82 million pact, ending a lengthy stalemate that should ensure Thompson's presence in Northeast Ohio through the deals already in place with Kevin Love and Kyrie Irving and, most likely, LeBron James.
Cleveland will have the highest payroll in NBA history with the signing, opening training camp next week with a commitment this year of approximately $115 million.
As is the case with most restricted free agents, the Cavaliers’ ability to match any contract offer for Thompson scared off any teams wasting time and dollars on making an offer to Thompson, and it certainly dissuaded Thompson from signing an offer sheet with any other team – an offer sheet that would (per NBA rules) not only be below the $80 million the Cavs offered, but the $94 million he coveted.
Thompson “lowered” his demands to three years and $54 million (erroneously reported by one outlet as a done deal in a tweet that, weirdly, hasn’t been deleted) but the Cavaliers refused to budge. Faced with few other options due to the restricted status that would once again await him in 2016, Thompson “gave in” to the idea of making over $16 million a year as a Cleveland reserve, shooting for a championship yearly on a team featuring LeBron James.
For the Cavs, this works as the start of an unprecedented spending spree. And don't think the rest of the league, starting with Sacramento's DeMarcus Cousins, hasn't noticed:
How much??? 😳
— DeMarcus Cousins (@boogiecousins) October 21, 2015
Not only will the team pay over $170 million in total salary once the luxury tax is accounted for, it will dive into a record-setting stratosphere of spending once LeBron James opts out of his current contract in 2016, and signs for a long-term deal that will pay him in excess of $30 million a year. In 2019 star guard Kyrie Irving will almost certainly decline the fifth year on his current contract, and re-sign for the max at age 27. Pair LeBron’s record-setting deal with the over $25.5 million Kevin Love will be making that year, alongside Thompson’s deal, and you have a rather well-heeled foursome of players to attempt to build around.
In 2018-19 alone the Cavs will have seven players (James, Love, Thompson, Irving, Iman Shumpert, Anderson Varejao and a re-signed Timofey Mozgov) all making eight figures – with LeBron and Love combining to make around $60 million just by themselves.
All while the luxury tax penalties, which not only sting the wallets of the ownership group but also deny the front office easy avenues in which to trade for players and sign players on exception deals, grow stiffer every year.
The Cavaliers, it seems, can’t be bothered:
— Dan Gilbert (@cavsdan) October 21, 2015
Thompson will be overpaid, severely, as he isn’t some analytics darling or high potential diamond in the rough. He’s a solid enough player on both ends that, frankly, the Cavaliers had to overpay. Cleveland could very well win the championship (or several) without him, but his production wasn’t replaceable with the Cavaliers’ payroll and top-heavy list of trade assets, and it was a luxury they had to dig in on.
The numbers might throw you off, but there was a very good and sensible reason Cleveland offered nearly this money to Thompson at the beginning of the offseason. You can’t judge player value and player salaries in a vacuum.
They better start winning some championships real soon, though. Yikes.
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