DeAndre Jordan has plenty of suitors in addition to his former team, the Los Angeles Clippers. Does signing a max deal in LA give him any more money than signing elsewhere?
by Austin Peters
DeAndre Jordan is the perfect type of center to have in the modern NBA. His combination of athleticism and finishing ability on offense coupled with his shot blocking prowess on defense is the new recipe for a max contract nowadays.
I've explained before what a max contract is, so I won't go into too much detail. The max contract is the maximum amount of salary a player can make based on a percentage of the salary cap. Depending on the player's experience in the league, the max contract percentage is different.
For DeAndre, he falls into the second tier, 30% max category. Early estimations for this max contract come out to about $18,835,200 in year one of any max deal he signs this offseason. After that, the amount of raises he can get each year depends on who he signs with. If he stays in LA, then he can receive 7.5% raises every season. If he goes somewhere else, then he can only receive up to 4.5% raises. In addition to the higher raise amount, LA is the only team that can offer DeAndre a fifth year on his contract. With the raises in play, that last year would amount to about $25 million on the final year of the deal and nearly $30 million total more if he stayed with the Clippers.
No brainer right? Stay in LA and get a lot more money? Not so fast.
Reports have surfaced that while DeAndre would still like a max contract, he is looking to sign a four year deal, with a player option after the third year. This would mean that DeAndre would hit the open market again three years from now and be able to cash in on a new contract.
The reasoning for this is more than justified. The salary cap is spiking at an all time high rate, and Jordan can hit free agency again during that spike. The percentage of the cap will be the same, but the cap will be a lot higher, and Jordan can make plenty more money by doing this.
Since he isn't looking for that extra year the Clippers can offer him, LA is now at a huge disadvantage for their All-NBA center. Why is that?
Two words: State Tax.
California is notorious for having one of the worst tax rates in all of America. Their income tax is progressive in nature; taxing income in sort of a step ladder approach. Here is a breakdown of how California's state tax works:
This harsh income tax is the complete opposite to the state of Texas, who is famously known for having no state income tax at all. With DeAndre Jordan deciding on whether to stay in LA or go back home to Dallas, this could be a huge factor.
Even with the 7.5% raises that LA can offer him, DeAndre will make quite a bit more money by signing a four year deal in Dallas rather than signing in California. I calculated out what his income would look like depending on which one he chose to sign with.
By deciding to leave Dallas and go back to where he grew up, DeAndre will make around $18 million more as opposed to staying in LA.
This is one of the more underrated parts of free agency. Players think about this stuff all the time and you can guarantee that teams go over it in their free agency pitches. This is why you see free agents going to meetings with Houston, Dallas, and Miami every year; those places have no state tax and they can save themselves a lot of money. Throw in the fact that DeAndre is from Texas and went to school at Texas A&M, and we might see another change of power in the Western Conference.
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