K.J. McDaniels bet on himself and won $10 million from the Houston Rockets
After selecting him with the 32nd pick in the 2014 NBA draft, the Philadelphia 76ers offered Clemson swingman K.J. McDaniels a four-year contract in which the first two years were guaranteed at a salary higher than the league minimum — a rarity for second-round picks, whose deals aren’t required to be guaranteed and rarely slot in above the minimum — but the final two were fully unguaranteed at the minimum. This is something several teams have done for a while — as Grantland’s Zach Lowe wrote a few summers back, the Houston Rockets and Dallas Mavericks largely pioneered it — and it’s a practice that Sixers general manager Sam Hinkie carried over from Houston and doubled-down on since taking over in Philly.
The idea, as ESPN the Magazine’s Pablo S. Torre laid out in his investigation of the Hinkie regime, is for the Sixers to give themselves a number of ways to win (ha!) with their draft picks, whether by grinding out small gains or hitting outsized-bang-for-your-buck home runs:
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But to Philly, any second-rounder is both an embryonic trade chip and a lottery ticket that jumps in value come draft day, when some team will inevitably take a shining to a specific prospect without having the picks to draft him. When that happens, the Bank of Hinkie will be there — ready to flip the second-rounder for cash (and profit); or to package it for another asset (and profit); or to keep it himself, hoping to sign the next Chandler Parsons, the eventual $46 million forward whom the Rockets drafted 38th overall in 2011 (and profit).
Consider Jerami Grant, whom Philly took 39th out of Syracuse in June. Grant signed a four-year deal that guaranteed his first two seasons for $885,000 and $845,000, respectively, some $300,000 more annually than the league-minimum salary of many second-rounders. That financial security was catnip to him and no sweat to the Sixers, who certainly have cap space on their delayed production schedule. But the key twist — just as it was with Parsons — is that the forward’s third and fourth years are neither guaranteed nor big raises.
McDaniels, however, preferred the prospect of controlling his own destiny to locking in an extra $600,000 or so over his first two pro campaigns. He passed on the four-year deal in favor of a one-year, totally unguaranteed contract tender that allowed him to become a restricted free agent after his rookie season, a move that Lowe called “a negotiating loss for Philly, and a win for players who want control of their futures.”
There was a chance, however, that the victory would be short-lived. After McDaniels impressed with his athleticism, defensive work and dunking — and after K.J.’s mom lambasted the Sixers’ rebuild — Hinkie sent him to former boss Daryl Morey of the Houston Rockets in exchange for point guard Isaiah Canaan and a second-round pick. The 6-foot-6 rookie barely saw the floor down the stretch for a Rockets club with title aspirations, logging just 33 minutes before fracturing his right elbow and missing Houston’s playoff run.
Coming off injury, with only 52 games of hard-to-parse production for the abysmal Sixers in the way of a big-league track record, and with potential suitors mostly spending big elsewhere, it remained unclear what the market for McDaniels’ services would look like. As it turns out, it wasn’t quite as robust as agent Mark Bartelstein might’ve hoped, but it still netted a deal more lucrative than what Philly put on the table.
McDaniels signed a three-year, $10 million deal to stay with the Rockets, as first reported by Jake Pavorsky of Liberty Ballers, and subsequently confirmed by multiple sources, including McDaniels:
But I’m too happy and too blessed and thankful to be back apart of #RedNation
— K.J (@KJMcDaniels) July 19, 2015
McDaniels’ new deal will pay him like he was a late lottery pick in the 2015 draft, and could feature about the same amount of guaranteed money through the next three seasons as the rookie-scale slot for the No. 5 pick. That represents quite a nice come-up after being the second pick in the second round last summer.
It’s not the midlevel-exception-or-higher price tag he and Bartelstein sought:
McDaniels had been searching for a team with room to land an offer sheet. No team would bite at a starting number north of 6m per.
— Bobby Marks (@BobbyMarks42) July 19, 2015
… but it’s still a strong return for a player whose potential still far outstrips his present level of production:
Credit should go to McDaniels former agent Mark Bartelstein. 1 year non guaranteed minimum turned into 3 years/10m.
— Bobby Marks (@BobbyMarks42) July 19, 2015
“I feel great,” McDaniels told Jonathan Feigen of the Houston Chronicle. “It’s about time we got it done and I’m just happy to be a part of such a great organization. I felt like this was the right place for me because I’m loyal to the team. I have a great relationship with the players on the team. The city was great to me. I love the organization. I love the history behind the Rockets and the greats that played there. It’s just a blessing.”
The player option for Year 3 also affords McDaniels an opportunity to re-enter free agency again in the summer of 2017, when he’ll be just 24 years old and when the influx of revenue from the NBA’s new nine-year, $24 billion broadcast rights deal is expected to inflate the salary cap to an unprecedented $108 million.
If he can build on the flashes of excitement he provided in Philly over the course of the next two seasons, he could be in line for a sizable payday as he enters his athletic prime. Finding the opportunity to continue that development, however, could be difficult, as McDaniels returns to a Rockets team that’s loaded on the wings.
With MVP runner-up James Harden and veteran Trevor Ariza already entrenched at the two and three, GM Daryl Morey re-upped the defensive-minded pair of point guard Patrick Beverley and swingman Corey Brewer, drafted Wisconsin forward Sam Dekker with the No. 18 pick in the 2015 draft, added journeyman scorer Marcus Thornton on a one-year deal and swung a trade with the Denver Nuggets to import troubled but talented point guard Ty Lawson. Those moves give Houston arguably the league’s deepest and most varied collection of perimeter talent, and further establish the Rockets — who, lest we forget, were the No. 2 seed in the West last season and made the Western Conference finals before falling to the eventual champion Golden State Warriors — as a serious contender for the 2015-16 O’Brien.
In order to secure that lucrative third contract, McDaniels will have to show coach Kevin McHale that his combination of length, quickness, athleticism, explosiveness in transition, defensive acumen and occasional 3-point shooting merit taking minutes away from more established veterans and/or highly touted young prospects. As he sets about that challenge, he’ll do so secure in the knowledge that he’s already succeeded in his first big NBA trial, and with the confidence that can only come from having bet on yourself and been repaid handsomely for the risk.
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Dan Devine is an editor for Ball Don’t Lie on Yahoo Sports. Have a tip? Email him at [email protected] or follow him on Twitter!
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