The James Harden Pay Cut

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertOctober 18, 2022
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Not sure if this is out there yet (#sarcasm), but James Harden took a $14.3M haircut with his 2022-23 salary with the Philadelphia 76ers. But was this a real paycut, or one of those “funny money restructures”?

What Was vs. What Is

The undisputed truth about Harden’s 2022-23 compensation is that it started as a $47,366,760 player option, and wound up a $33,000,000 guaranteed salary. All he had to do was exercise the option, and the $47M+ was his.

Less Now but More Overall, right?

Emphatically no. The easy out with this conversation is to look at the original $47.3M salary, and the new $68.64M contract, and say that he wins out in the end. But the 2023-24 salary is a $35.64M player option, and NBA stars almost always opt out of less-than-max player options these days (Kyrie Irving excluded).

Furthermore, by declining the $47.3M option, he also reset his “starting salary” point. Had he exercised that option, then signed a maximum free agent contract next offseason, Harden’s 2023-24 starting salary would be 105% of that $47.3M, because he had earned more than the maximum salary in the previous year. This means that Harden could have cashed in $47.3M + $49.7M, or $97M over the next two years had he stayed on his current path, $29M more than his current contract contains.

But, a thinner, healthier James Harden is going to return to star form this year, and then decline his player option next year, right? Probably, which puts him back on track for a 35% of the salary cap maximum salary in 2023-24. If we assume a $134,000,000 league cap, this means a $46,900,000 salary, or $79.9M over the next two seasons.

Two-Year Payout Scenarios (22-23 + 23-24)

  1. Current 2-Year Payout: $68.64M
  2. Current Salary + Opt-Out & Max Contract Next Summer: $79.9M
  3. Original Option Exercised, Max Contract Next Summer: $97.1M

Concluding Thoughts

Harden’s been an easy target, so trying to find and poke holes in a move like this can come with the territory, but this is a true veteran pay cut, no matter how you slice it. The fact of the matter is that the $14.3M saved by his new salary allowed players such as P.J. Tucker & Montrezl Harrell to fit into the puzzle.

Need more proof that he’s all-in on this team? If the goal here was to chop off salary but solidify his long term payout (Chris Paul in Phoenix), then this would have been a true multi-year contract, though still for not near what a maximum contract can pay him next season. But Harden taking a 1 year contract (with Bird rights) gives him the power to veto any trade scenario that the 76ers might have been inclined to include him in this season - per the CBA. A multi-year contract would have forfeited this trade veto power.

Love him or hate him, the player that has forced himself off of two rosters in the past few seasons did everything in his power to not only stay on this one - but to make it even better.


#james harden
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