NBA Off-Season 2018: A Look at the Clippers’ Restricted Free Agents: Montrezl Harrell and Tyrone Wallace

For the most part, the 2018 Free Agency period in the NBA is over. Most of the top-level talent is gone—just 17 of CBSSports’ top 50 free agents remain available, and just one of their top 10—and there isn’t very much money left on the market for big deals. In fact, the potential trade of Kawhi Leonard is far and away the biggest transaction looming on the NBA horizon.

The players left on the market are all there for various reasons: some big-name veterans, like Isaiah Thomas, Dwyane Wade, and Brook Lopez are sure to end up on a roster, but are patiently waiting for the right offer and team to emerge. Others, like Luc Mbah a Moute and Wayne Ellington, are niche support players who multiple playoff teams will want after they’re done dealing with higher-priority moves.

But there’s one group of remaining free agents whose summers could drag on indefinitely: the restricted free agents. Before we get into the specific context of the Clippers’ two restricted free agents, let’s break down exactly what restricted free agency is.

Restricted free agency, as contrasted with unrestricted free agency (the process most NBA players go through), is a type of free agency designed to allow teams to retain control of their young players. It’s reserved for players with one, two, or three years of NBA experience, as well as first-round draft picks who have played out their full four-year rookie scale contract. The only time a player with three or fewer years of experience isn’t a free agent is when they are a first round pick whose third- or fourth-year option is declined (like Mario Hezonja this summer, or Austin Rivers’ first free agency with the Clippers).

So for the Clippers, that means players like Montrezl Harrell (signed a 3-year deal as a second-rounder) and Tyrone Wallace (one year of NBA experience) this summer, but also Sam Dekker (coming off the fourth year of his rookie scale contract) and Milos Teodosic (two years of NBA experience) next summer, and Sindarius Thornwell, Jawun Evans (both signed 3-year deals as second-rounders) and C.J. Williams (three years of NBA experience) in the summer of 2020.

So, those are the players that restricted free agency lets teams have additional control over—but how? Before free agency begins, NBA teams have the option to submit what is called a “qualifying offer” to any of their players eligible for restricted free agency. A player who does not receive a qualifying offer by June 29th becomes an unrestricted free agent. Teams can withdraw a qualifying offer any time before July 14th if they want to free up cap room. Dallas extended a QO to Doug McDermott, but then withdrew it when they realized they wouldn’t be able to orchestrate a trade for DeAndre Jordan and needed to clear cap room to sign him. The Minnesota Timberwolves also recently withdrew their qualifying offer to Nemanja Bjelica when they successfully signed Anthony Tolliver, a perceived upgrade at the backup forward position.

The qualifying offer gives a team the right of first refusal—meaning they have 48 to match any contract (called an “offer sheet” for restricted free agents) the player signs with another team, and he has to stay with them. This came into play during DeAndre Jordan’s first free agency during the 2011 off-season: he signed a four-year deal with the Golden State Warriors, which the Clippers then matched to keep their young center. If a player doesn’t get an offer sheet that he likes, he can always sign his qualifying offer and play for one year before hitting the market again. For first-round picks coming off of their rookie scale contracts or a player with three years of experience like Harrell, that would mean unrestricted free agency the following summer, but someone like Tyrone Wallace would be eligible for restricted free agency again next summer if he signed his qualifying offer.

The right of first refusal can make the market somewhat wonky for a lot of restricted free agents, which is why we see so many of them leftover a few days into July. If a team offers what they deem to be fair value to a restricted free agent, they know it’s highly likely that their offer will be matched, wasting their time and tying up their cap room for 48 hours. There’s a flip side to that, though—if a team is determined to sign a player, they only have one shot to make an offer so high that the player’s original team won’t match it. That can make for some questionable and enormous contracts for players like Tim Hardaway, Jr., who the Knicks signed to a 4-year, $71 million offer sheet that the Hawks decided to not match. The Portland Trail Blazers, when put in that situation, matched a 4-year, $75 million offer sheet from the Nets for Allen Crabbe (oddly enough, they eventually traded that contract to the Nets for essentially nothing in return). Restricted free agents are eligible for sign-and-trades but only before they sign an offer sheet. Once a team matches an offer sheet, they cannot trade a player to the team that extended the offer sheet for a full year.

Notably, a team has to have a tool with which to legally sign their free agent to the contract they’re matching. Most of the time, teams have bird rights for their high-profile restricted free agents, making this a non-issue. However, for second-round picks and undrafted free agents who are hitting restricted free agency after one or two seasons, it can create some more complex scenarios. Fortunately, the Clippers have Montrezl Harrell’s bird rights, and any offer sheet for Tyrone Wallace should fit comfortably within one of the team’s cap exceptions.

So as Clippers fans’ collective anxiety regarding these two fan favorites builds, I figured it would be a good time to check in on the specific salary-cap dynamics surrounding each player’s situation.

Montrezl Harrell, due to his incredibly low minimum salary last season, has a tiny qualifying offer of only $1,839,228. That’s obviously less than Harrell would make on the open market as an unrestricted free agent. However, teams feared that the Clippers would match reasonable offers and, at least so far, have been unwilling to make inflated offers to scare the Clippers away from matching. ESPN’s Kevin Pelton noted that, with regards to Harrell, that there may not be “a team with space or even the taxpayer midlevel looking for a center at this point.” The taxpayer mid-level exception is worth $5,337,000—if that isn’t even on the table for Harrell, then it seems highly likely that the Clippers would match any offers coming in below it.

So, it seems increasingly likely that unless a team throws a surprising contract at Montrezl, he’ll have two options: sign the qualifying offer, or negotiate a different long-term contract with the Clippers. To pre-answer a frequently asked question, not signing the qualifying offer really isn’t an option. Harrell would be unable to play for any other NBA team this season, and then would be a restricted free agent again with the same qualifying offer next summer. Even if Montrezl is grumpy with his salary, he’s clearly better off playing for $1.8 million next season and being an unrestricted free agent next summer.

Regarding the possibility of the two sides negotiating a different contract, I think we likely loop back to the same factor that is influencing everything the Clippers do this summer: 2019 cap space. If Montrezl accepts his qualifying offer, he’ll have a cap hold of $3,494,533 next summer. That means that hypothetically, the Clippers could keep Montrezl in that small slot while they use their cap room to sign other free agents, and then exceed the cap to sign him to a salary greater than $3.5 million afterwards. I don’t think the Clippers will willingly concede any number greater than that being on the books for Harrell during the summer of 2019—meaning they won’t give him an offer that pays him more than $1.8 million in 2018-19 if it means he could hit free agency in 2019 (since his cap hold is tied to his prior year’s salary), and they won’t give him an offer that pays him a salary greater than $3.5 million in 2019-20.

One possible offer could be a two-year deal that pays his qualifying offer for next season with a $2 million player option for 2019-20. This would give Harrell a little added incentive to accept instead of his qualifying offer, but it only makes sense for the Clippers to give that player option away if they want to get Montrezl off of the FA market as quickly as possible this summer.

More likely, in my opinion, is a three-year deal that pays Harrell $3.5 million a year, with a player option in the third season. This still likely represents a paycut in year 2 for Montrezl, but the additional money in year one makes up for that, and the third-year player option gives him some long-term security and control. From the Clippers’ perspective, you’re using money that you don’t need this year to help maximize your cap space next summer. The team can even use Montrezl’s bird rights to incorporate a 8% decrease in salary between years 1 and 2, followed by an 8% raise in year 3. This would give Montrezl a $3.8M salary in 2018-19, a $3.5M salary in 2019-20, and a $3.8M player option in 2020-21. The first two seasons would be the equivalent of signing the $1.8M qualifying offer and then taking the taxpayer mid-level next summer—except he’d lock in that money now and have a player option on the back end for some added safety.

My best guess is that the Clippers’ standing offer to Montrezl looks something like that. He’s right not to accept it off the bat, as it’s entirely possible that he could get an offer sheet worth more. Failing that, however, this deal is at least a reasonable alternative to his qualifying offer that could be mutually beneficial.

Tyrone Wallace, on the other hand, is in an even worse situation than Montrezl. Wallace, as a two-way contract player with only one year of experience, has a truly low qualifying offer: another one-year two-way contract with a $50,000 guarantee. There’s little doubt to anyone in the league that Tyrone is worthy of a spot on a team’s 15-man roster after his play with the Clippers last season, but is he worth gambling on with a low contract offer that the Clippers would likely match?

If Wallace doesn’t get an offer sheet, it doesn’t seem likely that the Clippers will give him a serious contract offer—at best, they might try to give him a multi-year non-guaranteed minimum deal like they reportedly offered him last season. The team has a ton of guards, including rookies Shai Gilgeous-Alexander and Jerome Robinson, and second-year prospects Jawun Evans and Sindarius Thornwell. The Clippers have a serious shortage of roster spots this summer, so keeping Wallace on a two-way deal and off of the 15-man roster could be vital. Otherwise, the team may have to cut one of their other guards to make room for Tyrone.

I don’t predict that any offer sheet is forthcoming, and given the team’s track record of playing hardball with Ty, I feel pretty comfortable in saying they’ll force him to take his qualifying offer. As with Montrezl, I’d be shocked to see him forego the QO. Tyrone is probably in a situation where he could make more money overseas than on a two-way contract, but it’s clear that at 24 years old, he has a future playing NBA ball, and he’d still be under the Clippers’ control when he eventually returned to the league.

Not all hope is lost for Ty, though. Because his QO is below the minimum salary, it’s possible that another NBA team could offer him a minimum-salary offer sheet just to screw with the Clippers. They’d be forced to either put him on the 15-man roster or let him walk, and the risk to the other team is minimal—unlike pursuits of higher-caliber restricted free agents, they’d hardly be risking tying up their cap room for a minimum-salary deal. Such an offer sheet would guarantee Ty a real NBA salary and a chance to spend more than 45 days with an NBA team next season.

It’s also possible that a jump to Europe wouldn’t be the worst thing for Ty. While, like I said, he’d still the Clippers’ restricted free agent next summer on the same qualifying offer, a strong campaign in a top European league could put him in a position to earn more serious offer sheets next summer.

However, that pathway isn’t without risk. If he doesn’t do well enough to earn offer sheets next summer (even players who would otherwise earn above-minimum contracts are sometimes ignored due to their restricted status, just like Harrell this season), his qualifying offer with the Clippers would again be a one-year two-way deal with $50,000 guaranteed. If Ty signs that QO this summer, he puts himself in a slightly more safe position for next summer. While he’d be eligible for restricted free agency under Clipper control again, his qualifying offer would be a one-year minimum-salary deal, finally forcing the team’s hand in bumping him up from two-way status.

That Tyrone played so well and is being so harshly punished for it is probably a sign that the two-way system, which is still in infancy, tilts player control too steeply towards the team. It makes sense that teams should be able to retain the prospects that they invest in, but Ty has gotten a pretty rotten deal at every turn, and now an exciting young player who would certainly be in the NBA otherwise may not be next season. In fact, Wallace may have been better off if he had never signed his two-way contract—that’s a sign that it’s a bad deal for the players involved.

Ultimately, the Clippers should be in a good position to retain both of these young, exciting fan favorites. In Montrezl’s case, the most likely scenario is that he accepts his qualifying offer, but I wouldn’t rule out a small, multi-year deal like the one I outlined above. An offer sheet, while still technically in play, does not appear to be forthcoming. Tyrone’s case is a little harder to predict, since there’s really no precedent for this kind of situation with a below-minimum qualifying offer. Ultimately, my hunch is that Tyrone doesn’t play on his qualifying offer next season—he’s too good to be a two-way player again. I think some other team will at least give him a minimum-salary deal (offer sheets must run for at least two seasons, not including option years) to force the Clippers’ hand and see if they can get lucky and pry him away.