After failing to attract a big offer last time he entered free agency, Ellis settled for a modest offer by Dallas and became a bargain after averaging 19 points and four assists per game. While he has been good for them, it looks like the Mavericks are not looking to bring him back if he opts out of his $8.7 million player option to pursue a bigger contract.
So, Ellis might have played his last game in a Mavericks jersey.
Why it makes sense
The Mavericks are reportedly in the running for both LaMarcus Aldridge and DeAndre Jordan, so they have bigger targets than Ellis. For them to have enough cap room to sign either of those stars, and either retain Tyson Chandler or add another piece, they would need to renounce Ellis' rights to remove his cap hold. They would surely not hesitate to do so, which means that if Ellis opts out, the only scenario in which Dallas might bring him back would be if other free agents spurn them.
Even then, they might be hesitant. McMahon reports that Ellis is perceived as someone "whose moodiness and selfishness negatively impacted the team's chemistry." Previous reports suggest Ellis was not at all happy with Chandler Parsons making almost twice the money he made and wasn't comfortable sharing the ball with Parsons or Rajon Rondo.
Finally, McMahon reports that the Mavericks are trying to improve on defense at the wing and Ellis doesn't help them there. Dallas finished with a top-five offense, but were 18th in defensive efficiency. Upgrading at point guard with Rondo didn't help, and with Parsons and Dirk Nowitzki under contract, the only spot at which they can really improve is shooting guard.
Why it doesn't make sense
The Mavericks might find themselves in the same situation they were in when they signed Ellis the first time: with a lot of cap space, but no big name free agent willing to commit to them. Aldridge and Jordan could get more money by staying with their current teams. Marc Gasol signing in Dallas is a long shot and any other free agents won't really move the needle. Dallas would be wise to hold on to the rights to Ellis and, if no one else bites, bring back their leading scorer from the past two seasons, even if he's a little more expensive.
Ellis' attitude issues reportedly stem from Parsons making a lot more money than he does, which would be solved by a new contract with a raise. Rondo won't be with the team next season, so Ellis won't have to play off the ball anymore. Rick Carlisle is a good enough coach to find enough touches for both Ellis and Parsons, and if that happens, tensions between the two will surely dwindle. At his best, Ellis was a borderline All-Star for Dallas. If he can get back to that level, he'll be worth the headaches.
As for improving on defense, the Mavericks could do that by keeping Chandler and adding a wing defender who can slide down to cover point guards in crunch time, moving Ellis to the other team's weakest offensive player. Considering the other two points guards on the roster are Devin Harris and Raymond Felton, Ellis would likely spend significant time at lead guard anyway.
Likelihood of happening: 7/10
It's not the first time reports coming out of Dallas have painted Ellis as a selfish player. For the money he was making, he was a steal. But if he can't accept a slightly reduced role to make room for Parsons, it's not surprising the Mavericks are ready to move on instead of offering a raise. Unless they strike out on all other notable free agents and Ellis can't get a good offer from any team once again, chances are they will part ways this summer.