How the NBA’s new CBA impacts the Sixers’ extension talks with De’Anthony Melton
The NBA’s new collective bargaining agreement took effect July 1, which is exactly when De’Anthony Melton became eligible to sign an extension with the Sixers. While the new CBA contains some harsh punishments for the league’s highest-spending teams, Melton could be one of the early beneficiaries from it.
Under the old CBA, teams were limited to offering either 120 percent of the player’s previous salary or 120 percent of the estimated average salary as the starting salary on a new extension. For Melton’s purposes, he would have been limited to a four-year, $63.2 million extension at most (based on a $11.8 million projection for the estimated average salary in 2024-25).
Under the new CBA, teams can offer either 140 percent of the player’s previous salary or 140 percent of the estimated average salary as the starting salary on a new extension. That enables the Sixers to offer Melton more money in an extension than they previously could.
Melton originally signed a four-year, $34.6 million extension with the Memphis Grizzlies that descended in value each season. He’s set to earn only $8 million in 2023-24 after making nearly $9.6 million in the first year of his current deal and $8.8 million in 2021-22, which complicates his upcoming extension negotiations.
If the Sixers based Melton’s new deal on his previous salary, his extension would begin at $11.2 million and could increase 8 percent each year from there. In total, that would top out at a four-year, $50.2 million offer.
- 2024-25: $11,200,000
- 2025-26: $12,096,000
- 2026-27: $12,992,000
- 2027-28: $13,888,000
- Total: $50,176,000
That $12.5 million annual average salary would put him right below Jordan Clarkson ($12.9 million), Dennis Schroder ($12.7 million) and Josh Hart ($12.6 million). Clarkson already renegotiated and extended his contract this offseason, Schroder signed with the Toronto Raptors via the non-taxpayer mid-level exception, and Hart is likely to sign an extension once he becomes eligible to do so in August.
While the Sixers would undoubtedly love to lock Melton in at that price, it’s hard to imagine him agreeing. He’ll be eligible to receive up to 30 percent of the salary cap as the starting salary of a new contract if he becomes a free agent, although he likely won’t come anywhere close to that.
The Sixers could bridge the gap by instead basing his extension off 140 percent of the estimated average salary for that season. That figure is 104.5 percent of the average salary from the previous season, which is likely to land around $11.8 million in 2024-25. Based on that estimate, the Sixers could offer Melton a starting salary around $16.5 million and top out at a four-year, $74 million extension this offseason.
- 2024-25: $16,520,000
- 2025-26: $17,841,600
- 2026-27: $19,163,200
- 2027-28: $20,484,800
- Total: $74,009,600
An $18.5 million AAV would put Melton in the same neighborhood as low-end starters/high-end reserves such as Tim Hardaway Jr. ($18.75 million), Joe Harris ($18.75 million) and Norman Powell ($18.0 million). That might be a bit higher than what Melton deserves based on his production to date, but the rising salary cap could help his case.
Ultimately, the rest of the Sixers’ offseason could help determine whether they’re able to sign Melton to an extension this summer. If they trade James Harden and Melton projects to take over as a full-time starter next season, he might prefer to bet on himself to see if he can earn more than the Sixers’ max extension offer as a free agent in 2024. If they keep Harden, they’ll need to remain mindful of the second salary-cap apron in the new CBA, which heavily penalizes teams which cross that line.
The Sixers’ cap-space plan for next summer looms large here as well. If they’re intent on maintaining as much financial flexibility as possible around Joel Embiid and Tyrese Maxey, they likely won’t want to extend Melton this offseason. However, his projected maximum starting salary on an extension is only $1.3 million higher than his cap hold next offseason as a free agent ($15.2 million). If the Sixers plan to re-sign him next summer, they might be better off doing it as an extension now rather than letting him test the open market, where he could receive a starting salary north of $20 million.
There’s risk for both Melton and the Sixers either way. Signing him to an extension now could cut into their cap space next offseason, but failing to do so could result in him walking for nothing as a free agent. Melton might earn more in free agency than he can on an extension, but the market was not particularly kind to players seeking more than the mid-level exception this summer. Fred VanVleet, Dillon Brooks, Bruce Brown and Max Strus were the only players to change teams and receive more than the non-taxpayer MLE.
The Sixers figure to first sort out their immediate business—particularly the future of Harden—before turning their attention to extension negotiations with Melton. However, time is of the essence here. If Melton signs an extension that begins at more than 105 percent of his previous salary, he’ll be ineligible to be traded for six months. Although the league has yet to release the date of the 2024 trade deadline, it figures to be sometime in early February as usual.
Since the Sixers have already signaled that they don’t plan to sign Maxey to an extension this summer, they’ll likely take the same stance with Melton. Then again, waiting on a Maxey extension has clear cap-space benefits next summer, but the same isn’t true for Melton.
Dejounte Murray was the first to take advantage of the NBA’s higher extension limits when he signed a four-year, $114.1 million extension with the Atlanta Hawks in July. Melton might not be the next to follow in his footsteps, but the new rules at least make it more feasible for him to do so.
NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac or RealGM.
