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How 2017 NBA free agency will work, in a 5-minute read

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Max contracts, restricted free agency and everything else you need to know about this year’s offseason.

Golden State Warriors v Utah Jazz - Game Three Photo by Gene Sweeney Jr/Getty Images

The NBA Finals whirled by, as did the NBA draft. Now, starting a tick past midnight, teams will look to sign the best talent available to improve for next year.

NBA free agency is set to kick off, and big-name players are expected to bounce around the league yet again. But maybe you’re not the most knowledgeable of free agency and its nuances. Who could blame you? You probably have bigger and better things to worry about than a bunch of basketball players collecting money to put a ball in a hoop anyway.

But if you don’t have better things to do and want a broader understanding of what to expect when all hell breaks loose after the clock strikes midnight, this is for you.

WHAT THE HECK IS FREE AGENCY ANYWAY?

When a player’s contract with a team runs its course, and the two sides don’t come to an agreement for an extension, he becomes a free agent. Think of it as unemployment without the nasty connotation.

There are two types of free agents: restricted and unrestricted.

Generally, restricted free agents are players who are coming off of their first contract in the NBA. The ‘restricted’ label means the player’s original team reserves first right of refusal and can match any opposing team’s offer on their player.

Unrestricted free agency offers no such assurances. When a player becomes an unrestricted free agent, he can sign with whichever team he chooses. This usually happens after his second NBA contract or if a team renounces their rights to said player, allowing him to navigate his offseason freely.

WHAT ARE MAX CONTRACTS? HOW DO THEY WORK?

Blake Griffin Mark J. Rebilas-USA TODAY Sports

You’ll hear this term a lot with the best players, but it means something different depending on the player.

A max contract starts at a set percentage of the salary cap, offering annual raises of 5 percent (if a player signs elsewhere) or 8 percent (if he stays with his current team) depending on the team. The NBA salary cap is projected to hit around $99 million for the 2017-18 season.

Here’s how max contracts breaks down:
  • Players with 0-6 years experience: 25 percent
  • Players with 7-9 years experience: 30 percent
  • Players with 10+ years experience: 35 percent

These contracts change depending on which team makes the offer. The NBA’s new collective bargaining agreement put an emphasis on competitive balance, ensuring teams have enough measures to retain their stars. In order to do so, a player’s original team can offer a five-year max contract with eight percent yearly raises. If he wants to leave, he does so understanding the most he can garner elsewhere is a four-year max offer with 8 percent annual raises. The difference in some cases can be more than $50 million.

For example, this summer Gordon Hayward could very well leave a Utah Jazz team he guided to the West’s fifth seed and a second-round playoff appearance. But he’d have to turn down a lot of long-term money to do it.

Hayward, who made an All-Star appearance in his seventh NBA season, is in line for a max contract no matter where he signs. If he stays with the Jazz, he can sign a five-year deal starting at 30 percent of the cap ($29.7 million in year one) — an amount totaling more than $174 million. Every other team can offer four years at $128 million.

That’s just under $50 million Hayward must turn down to pursue a championship somewhere else (like Boston). Imagine his family’s reaction when they hear they’ve got to uproot themselves — and take less money — so Hayward can have a better shot at getting swept by the Warriors.

Of course, if Hayward takes a contract for fewer years so he can get back on the market after his 10th season to cash in on the larger maximum contract, Utah’s financial advantage shrinks. We might see that happen.

WHAT’S THIS SUPER MAX BUSINESS?

Just like some of you make more money than your coworkers (or not), some star players make more money than their contemporaries (or not).

The cream of the crop — guys who have either won an MVP award in any of the past three seasons; have been named to an All-NBA team or have won Defensive Player of the Year in two of the last three seasons — are eligible for a “designated player” contract of five (or six) years at 35 percent of the cap. This only applies if they stayed with their original team.

Stephen Curry is the only player in line to command a supermax contract this summer. His deal will be worth more than $200 million over at least five seasons. Russell Westbrook is another player that can sign this extension with the Thunder at 12:01.

WHO WILL BE OVERPAID?

Some teams have really bad luck when it comes to free agency. Top-tier free agents sneeze at the sight of phone calls from Brooklyn, Sacramento, Orlando, and other teams that either aren’t close to playoff contention and/or are just run poorly.

For that reason, these teams throw large contracts at young players they could potentially mold into a valuable piece for the future. Last year alone, the Nets offered $120 million to Allen Crabbe and Tyler Johnson combined. Both Portland and Miami matched those contracts, and now, they look like some of the worst deals imaginable.

This summer, restricted free agents like Kentavious Caldwell-Pope and Otto Porter will field max offers from other teams. Detroit and Washington will probably match those offers because they have no means to replace that player any other way. Both Pope and Porter could make more than $100 million over the next four years as a result.

WHAT’S THIS SUPERTEAM STUFF?

The Rockets are ahead of the curve after their blockbuster trade put Chris Paul in the same backcourt as James Harden. Houston’s probably not done either, but the Celtics have yet to get started. Boston’s expected to make a run at signing Hayward, then could potentially trade for another All-Star, like Paul George or Carmelo Anthony.

The Cavaliers, who lost 4-1 to the Warriors in the NBA Finals, could also make a run at Anthony. And the Spurs, who nearly beat the Warriors in the Western Conference Finals, have the means to get better, too, via either trade or free agency.

Watching these superstars team up — or not — will be one of the more speculated on occurrences this summer.

THE POINT GUARD FRENZY

The NBA has become an increasingly guard-driven league, and a premium has been put on the point guard position. This summer, the free agent pool is ripe with talented players, each ready to sign their next big contract.

With Paul off the market in Houston, and Curry expected to sign the first supermax contract with Golden State, the remaining starting point guards include Kyle Lowry, Jrue Holiday, George Hill, Jeff Teague and Derrick Rose, with Patty Mills, Shaun Livingston, Darren Collison, Deron Williams and Brandon Jennings available as possible rotation players.

Where each of these guys end up could change the league’s landscape, though the top is all but established with the Warriors and Cavaliers reigning supreme.

WILL MY TEAM LAND A STAR?

Well, that depends who your team is.

If you’re the Celtics, Cavaliers, Rockets or Spurs, you’ll probably land a player who can help you win one or two more games in a seven-game series against the Warriors.

If your team is the Nuggets, Suns, 76ers, Lakers, Clippers, or Timberwolves, you may land a fringe All-Star or a solid starter that could be the difference between missing or making the playoffs.

If you are the Kings, Knicks, Nets, Magic, Bulls, Pacers or Hawks, the answer is no, and you probably know why.

No other team has the money to sign a star this summer, unless it’s via trade.