What MKG’s Contract Extension Means for Harrison Barnes

The Charlotte Hornets and Michael Kidd-Gilchrist agreed to a contract extension yesterday – a four year, $52 million extension that will see MKG stay out of restricted free agency. The news will have implications for the Golden State Warriors, as MKG was just the fourth player from the 2012 NBA Draft class to sign an extension, and the second that didn’t sign a five-year designated player max. This is important as it likely sets the standard for evaluating and projecting upcoming potential contract extensions (especially wing players, as the other non-max extension was a center) – one of which could be Harrison Barnes.

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As many know, the salary cap is projected to rise by $19 million next season. This will severely affect how contracts are negotiated, especially “max” contracts, which are calculated based on a percentage of the cap. For example, if Barnes were to sign a max contract next offseason, when the new salary cap kicks in, his starting salary would be $22.25 million. As such, there is great incentive for the Warriors to seek out an extension with Barnes before the new cap is instated – even if Barnes isn’t likely to earn a max contract.

But doing so would hurt the Warriors’ flexibility for the next offseason. When nearly all the teams in the league will have cap space to sign free agents, the Warriors will be above the cap and prohibited from signing or even being a player in the free agency sweepstakes. Good front offices will always want to try and leave as much cap room as possible, in case they are forced to make moves in free agency.

The biggest thing that the MKG contract extension told everyone is that despite the significant projected cap increase, there is still hope for “decent” contracts to be negotiated. The impending big jump already caused a few surprises during the recent offseason, when players like Reggie Jackson (5 years, $80 million), Corey Joseph (4 years, $30 million), and Aron Baynes (3 years, $20 milion) received big-money contracts that not many expected.

MKG’s $13 million-a-year salary may seem quite steep at first, considering he’s nearly a non-factor on the offensive end, but will end up being a bargain when the new cap kicks in. At $89 million next season, MKG’s contract will only take up 14.6 percent of the cap.

The implications of MKG’s contract extension work both ways. The Warriors could use it as a benchmark during negotiations to work out a deal in the $50-55 million range. They would cite MKG’s importance on the defensive end for the Hornets and could claim that he plays a bigger role for the Hornets than Barnes does for the Warriors (where he’s basically a catch-and-shoot/slash guy). Conversely, Barnes and his agent could choose to pass up the chance for an extension, preferring instead to wait and see what the market is like in 2016.

The likelihood is that this contract extension greases the wheels for an agreement between the two parties, which could see the extension end up somewhere in the $12-$15 million per season range. It is unlikely that Barnes and his agent will agree to anything less than $10 million per season, and anything above $15 million would be an overpay by the Warriors.

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