The Warriors have inked shooting guard Klay Thompson to a rookie contract extension worth a reported $70 million over four years. The deal will kick in for the 2015-16 season and run through 2018-19 without any player or team options. Thompson will earn $3.1 million this season in the fourth year of his rookie contract.
Thompson, 24, averaged 18.4 points, 3.1 rebounds and 2.2 assists in 35.4 minutes in 2013-14, his third season with the Warriors. The 2011 lottery pick is regarded as one of the league's premier outside shooters and best two-way wings, and he played a key role for USA Basketball's gold medal-winning team at this summer's FIBA World Cup.
"It’s hard for me to express how excited and happy I am to know that I will be playing in front of the best fans in the NBA for a long time,” Thompson said in a prepared statement. “This team, under this ownership group and with this collection of players, has an incredibly bright future. I could not ask for a better situation and am extremely thankful.”
At first glance, Thompson's deal might appear to be inflated, and perhaps significantly so, when compared to his teammates and other two guards around the league. With an average annual salary of $17.5 million, the contract will make Thompson the Warriors' highest-paid player and place him among the league's leaders in individual salary. Last season, Thompson was Golden State's second-highest scorer, behind Stephen Curry, and he ranked fourth on the team in assists per game.
All told, there are only 13 total players pulling down that figure this year, and most of the players in that group are perennial All-Stars (LeBron James, Carmelo Anthony, Dwight Howard, etc.) or players who were perennial All-Stars when they signed their deals (Amar'e Stoudemire, Johnson, Deron Williams, etc.).
Comparisons to Curry or guys like Bryant and Johnson, however, aren't particularly helpful or representative of the major market conditions that influenced Thompson's contract. Curry was signed after a 23-43 season in which he played only 26 games. Thompson, on the other hand, has logged nearly 3,000 minutes in each of the last two seasons for a franchise that has championship aspirations this season and beyond. Bryant and Johnson were deep into decorated careers when they signed their current contracts while Thompson has yet to receive All-Star, All-NBA or All-Defensive recognition, and that is unlikely to change this year.
Instead, Thompson's handsome reward here must be compared in apples-to-apples fashion with the large hauls received by other promising guards and wings in recent years. The relevant comparison points for Thompson include Rockets guard James Harden (five years, $80 million in 2012), Pelicans guard Eric Gordon (four years, $58.4 million in 2012), Jazz forward Gordon Hayward (four years, $63 million in 2014) and Mavericks forward Chandler Parsons (three years, $45.1 million in 2014). All four players received max or near-max contracts, with the final three players finding their paydays as restricted free agents. Thompson was headed to restricted free agency next summer if an agreement hadn't been finalized prior to this week's deadline, and Golden State had every reason to believe, given this recent history, that Thompson would receive a four-year max offer come July.
Why did the Warriors pay now when they could have paid later? The major motivation would seem to be removing any outside distraction. Golden State indicated its commitment to the Curry/Thompson pairing this summer, when management reportedly refused to part with Thompson in a potential trade package for Timberwolves All-Star forward Kevin Love. The Splash Brothers are the league's premier backcourt: they combined to average 42.4 points last season, with Curry hitting 42.4 percent of his three-pointers and Thompson shooting at a 41.7 percent clip from outside, and their personalities and games complement each other well.
Perhaps more importantly, the Curry/Thompson duo has proven that it can win: Golden State won 47 games in 2012-13, Thompson's first year as a full-time starter, and 51 games last season. Now that the Thunder are upended by major injuries to Kevin Durant and Russell Westbrook, the door has opened for teams like the Warriors and Blazers to move into the West's top tier, alongside the Spurs and Clippers.
A possible trip to the Western Conference finals isn't out of the question for Golden State, and taking care of Thompson early resolves the organization's largest contract decision of the next 12 months. The Warriors now have Curry, Thompson, David Lee, Andrew Bogut, Andre Iguodala, Harrison Barnes and Shaun Livingston under contract for at least the next two seasons, making for a stable and talented base that will only be threatened by injuries or trades.
One more factor intervened to complete the "perfect timing" nature of this contract for Thompson. The NBA's new television deal promises to significantly increase the league's salary cap from $63 million this season to as high as $80 million or $90 million for the 2016-17 season. The final three years of Thompson's four year contract will be paid out under the significantly larger cap. That's a crucial point because the prospect of that larger salary cap space would surely bolster the market for interest in Thompson next summer. Committing an average annual salary of $17.5 million to one player is much easier to swallow for a rebuilding team if it knows the added TV revenue is coming soon and if it understands that such a contract won't single-handedly torpedo its salary cap.
Remember, a $17.5 million salary in an $85 million salary cap world is proportionally equivalent to a $13 million salary in a $63 million cap system. True outrage over the size of Thompson's deal can largely be explained away by a failure to fully process the massive, inevitable inflation of player salaries once the new TV deal kicks in.
Thompson might be better suited to life as a No. 2 option, he might be destined for a professional life spent in Curry's shadow, and he might be characterized as a player whose overall offensive game still possesses significant holes (his off-the-dribble game is limited, he doesn't get to the line that often and he's not a particularly gifted ball-handler or passer). But his career peaked right on schedule, his particular skills (elite perimeter shooting, disciplined and tireless defense, durability) are highly coveted, his roster fit is clean, his organization needs him around to achieve its goals of winning immediately and the NBA's upcoming salary cap changes played right into his hands.
That's why he got paid.