The LA Clippers will have Kawhi Leonard for the next three years after a contract extension reported Wednesday by ESPN's Adrian Wojnarowski. What does it mean for what has been one of the NBA's best teams over the past two months?
Leonard and teammate Paul George both became eligible for extensions last summer and entered this season as impending free agents. While George remains unsigned beyond this season -- Wojnarowski reported that extension talks between the two sides are ongoing -- Leonard came to terms on a deal that will pay him $153 million over the next three years, slightly less than his maximum possible salary.
The deal assures the Clippers will take at least one of their marquee stars into the new Intuit Dome, scheduled to open next season, with the status of George and newly added James Harden (who is not eligible for a contract extension ahead of his free agency) still to be determined.
Let's break down what Leonard's extension means for his future, the Clippers' chance to be a contender in coming seasons and this summer's free agency.
Leonard still playing at elite level
A strong start to the season is one possible factor in the timing of Leonard's extension. When Leonard first became eligible to extend his contract, replacing his $48.8 million player option for 2024-25 with a longer deal, he was coming off surgery in June to treat a meniscus tear suffered in the playoffs.
Since the injury followed Leonard missing all of 2021-22 due to a partial ACL tear during the 2021 playoffs, he had played in just 117 of a possible 262 Clippers games dating back to the start of 2020-21, including the postseason. It was understandable, then, if the organization was reluctant to offer a max salary without confidence in Leonard's availability.
Leonard has answered many of those questions. He played in the Clippers' first 27 games of the season, his longest uninterrupted stretch since winning Finals MVP after leading the Toronto Raptors to the 2019 championship. He signed with the Clippers that offseason.
Playing at an All-NBA level is also an important piece of the puzzle. After a slow start to the season, during which Leonard averaged 20.5 PPG on 46% shooting over the team's first 10 games, he's been on fire. Since Nov. 17, Leonard is averaging 25.4 PPG on 54% shooting from the field, 43% from 3-point range and 90.5% from the line. He's moved into the NBA's top 10 in my wins above replacement player (WARP) metric, sitting just ahead of Harden (12th) and George (13th).
As ESPN's Bobby Marks noted, Leonard's scheduled $52 million starting salary in this extension is the most he could make in 2024-25. That figure is based on a maximum possible 10% increase in the NBA's salary cap. Still, Leonard conceded some earnings in the following two years, when his salary will decline slightly to an average of $50 million per season rather than enjoying maximum possible 8% raises off his starting point.
Presumably, that concession was worth it for Leonard to lock in three years of guaranteed salary. Southern California is home for Leonard, and it will remain so for the foreseeable future.
Clippers look like championship contenders
Leonard's uptick in play overlaps with the Clippers rebounding after a 3-7 start, including losses in their first five games after adding Harden to the lineup in an early season trade with the Philadelphia 76ers. Since that point, when former MVP Russell Westbrook moved to a reserve role behind Harden, the Clippers are an NBA-best 20-6.
Advanced stats don't paint as rosy of a picture. The Clippers are fifth in point differential at plus-7.2 since Nov. 16 according to NBA Advanced Stats, behind a pair of other Western Conference teams (the Oklahoma City Thunder and New Orleans Pelicans).
Nonetheless, the Clippers have to feel better about their title-contending chances than they have at any point since Leonard's partial ACL tear, which he suffered during the middle of their eventual second-round series win over the Utah Jazz. By prioritizing performance in the regular season -- meaning no scheduled load management days for Leonard and George -- the Clippers are in position to finish with home-court advantage for the first time since 2021. And two of the three teams ahead of the Clippers -- Oklahoma City and the top-seeded Minnesota Timberwolves -- have no recent track record of advancing beyond the opening round.
The defending champion Denver Nuggets are still rightfully considered favorites to win the West, but the Clippers now boast the conference's second-best odds at plus-500, according to ESPN BET. That success is important, because the Clippers have to justify paying up to keep their stars together. Extending George and re-signing Harden on deals similar to Leonard's would push their 2024-25 team salary north of $200 million, as it is this season. Paying the luxury tax has never been a deterrent for Clippers owner Steve Ballmer, but incoming restrictions on teams over the NBA's second luxury tax apron will have greater impact on the court, potentially moving the Clippers' first-round pick to the end of the round down the road.
It appears the Clippers' approach is to spend into the second apron next season and hope to avoid it by the end of Leonard's extension as his salary goes down slightly while the cap continues to increase. Based on maximum possible 10% year-to-year increases in the cap, the second apron would reach $240 million by 2026-27 -- the first year a draft pick would potentially be affected by the new rules -- enabling the Clippers to pay their stars $50 million apiece and fill out a competitive roster without pushing above that figure.
Having a salary above the second apron next season would still prevent the Clippers from aggregating the salaries of their players in trades, something that's been necessary to add the likes of Harden. But the Clippers may be able to retain their core heading into their new arena while avoiding the most punitive elements of the new CBA.
Free agency takes a hit
Leonard's extension is yet another example of stars continuing to opt for the security of large salaries up front rather than maximizing their options as unrestricted free agents. If George follows suit by signing an extension, that's a significant blow to what was looking like a more interesting free agent class than in the summers of 2022 and 2023, which featured just three players becoming unrestricted free agents within two years of an All-NBA selection.
LeBron James, who holds a player option for 2024-25, and Harden are ineligible for extensions because of the length of their current contracts, so they'll be free agents this offseason but will unlikely change teams. Jrue Holiday of the Boston Celtics could also extend his contract once post-trade restrictions expire.
Add in OG Anunoby with the New York Knicks, who recently acquired him in a trade, and it's possible few of the top unrestricted free agents will actually be available to other teams. That leaves Pascal Siakam of the Toronto Raptors, who has yet to sign an extension, as the best unrestricted free agent who might be attainable. Siakam too could be moved to a desired destination before this season's Feb. 8 trade deadline.
The thinning of the free agency ranks is most relevant to the team that sent Harden to the Clippers, the 76ers. By foregoing an extension to Tyrese Maxey's rookie contract, the Sixers can create max-level cap room while re-signing Maxey and retaining MVP center Joel Embiid. If free agency is unlikely to yield key contributors, Philadelphia will be better off making trades before the deadline using players on expiring contracts rather than prioritizing cap space.