How Robert Covington’s Extension Launches the Next Phase of The Process

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Robert Covington is not a franchise cornerstone. He’s not a Joel Embiid, a Ben Simmons or even a left-handed Markelle Fultz. In many ways, however, Covington is as emblematic of the Sam Hinkie era as those three potential superstars. By signing him to a long-term contract extension, the Philadelphia 76ers have kicked off the next phase of The Process.

Phase 1 was the acquisition of franchise-changing stars. It’s early, but it looks like the Sixers have found at least two of them (don’t write off Fultz yet).

Phase 2 was a transition to competitive basketball under the guidance of vets like J.J. Redick, Jerryd Bayless and Amir Johnson. These additions were made to build a culture and provide leadership. It’s very possible that none of those players are around when the Sixers are ready to contend.

Phase 3 is building a championship-caliber roster around the young core. Covington’s extension falls into this category since he’s a long-term signing, but this phase has begun ahead of schedule because Embiid and Simmons already look that freaking good.

Half the roster is still on cheap rookie contracts, but the Sixers only have a limited time to capitalize on their tiny payroll. Covington’s uniquely structured contract was designed to maximize this window.

His new contract is what’s called a “renegotiation and extension”1. The Sixers had about $15M in cap space left for this season, and they gave all of it to Covington on top of his original 2017-18 salary (the renegotiation).

Table 1 - Renegotiation

This allowed them to frontload his contract, paying him more money this year and less in the next four years (the extension). Retaining Covington at an average of $11.2M per year over the next four seasons is an incredible bargain for a legitimately good 3 & D wing. On a nerdier level, the structure of the renegotiation-and-extension adds even more value to the deal for the Sixers because his lowest salaries are in the 2018-19 and 2019-20 seasons:Table 2 - Covington's Contract

A look at the Sixers’ cap table reveals why those low 2018-19 and 2019-20 cap hits are so significant:Table 3 - Cap Sheet

The cap space totals presented here are the maximum levels the Sixers could realistically achieve without sacrificing too much, but these numbers will of course change as the team makes moves. Re-signing J.J. Redick for next season, for example, would eat into their 2018-19 cap space and take them out of max contract territory. Their decisions on Redick, T.J. McConnell and Richaun Holmes2 will be particularly interesting, but the important thing to note is the limited cap room in 2020-21.

Embiid’s max extension hits the books next summer (2018) along with Covington’s new deal. In the summer of 2020, Simmons, Dario Saric and Timothe Luwawu-Cabarrot all hit restricted free agency. By that point, the Sixers probably won’t have the cap space to make any game-changing moves. This gives them a two-year window to use their max-level cap space before they lose it in 2020.

GM Bryan Colangelo has two summers to make some serious roster upgrades around the Embiid-Simmons-Covington-Fultz core. That prospect should send a chill of fear down the spines of the other 29 NBA GMs.

I looked at all the impending free agents and came up with the following list of interesting names separated by year of free agency and tier of player:Table 4 - Free Agency Options

**Note: The (PO) indicates that player has a player option. Using Kevin Durant as an example, he can opt out of his deal and hit free agency in the summer of 2018. If he doesn’t opt out, he’ll hit free agency the following year. The (RFA) indicates that a player is a Restricted Free Agent, so his original team will have the chance to match any contract offered to him.**

Not all of these players are great fits in Philadelphia, but Colangelo will certainly have options. The Sixers should be one of the most appealing suitors in free agency in terms of money and the chance to compete.

When we speak of max-level cap space, we like to think about splurging on one glitzy name. Obviously, if you can sign LeBron James, Kevin Durant or Kawhi Leonard into cap space, you do it and then immediately thank our Lord and Savior Sam Hinkie for blessing you with such good fortune3.

But even if none of the MVP-caliber or Secondary Stars comes to Philly, they can still make some notable additions that would become key rotation cogs, complement their stars and raise the team’s ceiling.

There are too many players to dig into here, but here are my thoughts on the most intriguing options:

  • Kawhi Leonard: I don’t see this happening unless Pop retires4. But if, for whatever reason, Kawhi wants out of San Antonio, he’s familiar with Brett Brown and Philly would surely be one of the most appealing destinations if winning is the most important thing to him.
  • Klay Thompson: This would be a glorious fit, and it comes with the added benefit of weakening the best team in the league. In all likelihood, the Warriors will pay what’s needed to keep Klay in the Bay. If ownership feels their luxury tax bills are getting too high, however, Klay is the most expendable of their core four.
  • Milwaukee Bucks: You may have noticed FOUR Bucks in the table. They’re all on the list because I think they could be intriguing (Jabari/Bledsoe) or perfect (Middleton/Brogdon) fits in Philly. Additionally, the fact that small-market Milwaukee will have to deal with all four of them hitting the market in consecutive summers smells like blood in the water. The Bucks may have to sacrifice at least one of them, and Philly should be ready to pounce.

If the Sixers strike out in 2018, they can sign one-year deals and try again in 2019. In addition to free-agent splashes, the Sixers could use their cap space to acquire talent in trades. They probably can’t compete with the Boston Celtics in trade talks, but the Sixers asset pool includes:

  • expiring deals (especially if they do sign big one-year deals in 2018)
  • interesting rotation-level prospects on rookie deals (e.g. Luwawu-Cabarrot, Furkan Korkmaz or even Fultz if he does turn out to be a bust)
  • One ultra-enticing first-round pick (from the Lakers in 2018 or from the Kings in 2019)
  • Their own first-round picks
  • A BOATLOAD of very good second-round picks (Check RealGM’s traded picks page for more details)

Things look pretty damn good for the Sixers right now, and their many paths to significantly improving the roster gives them some serious championship upside. Signing Covington to that extension was a no-brainer, but the decisions will get tougher from here. Phases 1 and 2 of The Process were relatively easy to execute (though harder to stomach). The same cannot be said of Phase 3.

For a team that has won a combined 75 games in the last four seasons, the stakes are now ridiculously high. Whether you Trusted the Process or scoffed at it, lionized Hinkie or reviled him, all of the losses and thinkpieces and injuries led us to this special moment. After years of playing for lottery ping-pong balls, Philadelphia’s focus should now be locked on basketball’s greatest prize.

Welcome to Phase Three.

 


1. This type of contract has only been used four times in  recent memory: Wilson Chandler (July 2015), Danilo Gallinari (July 2015), James Harden (July 2016) and Russell Westbrook (August 2016).^

2. The Sixers have team options for $1.6M on both McConnell and Holmes for the 2018-19 season. If the Sixers pick up the option(s), Philly will enjoy an extra year of solid rotation depth at a bargain price. If Colangelo declines the option(s), he’d have to pay the player(s) a year earlier than was necessary, but they’d both be restricted free agents giving Philadelphia the chance to match their contract offers. I would pick up their options so I could maintain the financial flexibility to make moves in free agency or on the trade market. This would risk losing them in unrestricted free agency, but I think McConnell and Holmes are quite replaceable.^

3. I have it on good authority that Bob Myers and Steve Kerr did this after signing Durant in 2016.^

4. Perhaps to prepare for a Presidential campaign in 2020? My top 3 picks for his running mate:

  1. Tim Duncan. I came close to crying on election day 2016. A Pop-Duncan ticket winning in 2020 would turn me into a walking puddle, but it would be for positive reasons this time.
  2. Steve Kerr. Perhaps this is merely a ruse by Pop to weaken the Warriors, but I can see these two giving the Obama-Biden bromance a run for its money.
  3. David Stern. The combative history between these two would make for some incredible drama. I just want to see Pop announce that “Stern couldn’t attend this meeting because he’s a DNP-Old”. And then I want to see Stern respond by breaking a tie in a Senate vote and going against Pop for “economic reasons”.^
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One thought on “How Robert Covington’s Extension Launches the Next Phase of The Process

  1. Pingback: League Pass Don’t Lie: Kyrie’s Wizardry; Speedy Simmons; The Waiters Cut; Pick & Roll Chemistry | Blog Don't Lie

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