Spencer Dinwiddie has been one of the biggest success stories of the 17-18 season. Dinwiddie originally found himself in a consistent backup role due to Jeremy Lin’s injury in Brooklyn's first game then stepping in as their starting point guard when D’Angelo Russell had to undergo arthroscopic surgery on his left knee. The 24-year-old guard has thrived in his expanded role and has helped elevate the still-growing Nets. While the excitement surrounding Dinwiddie has justifiably centered on his on-court contributions, his breakout has also created one of the more intriguing contract negotiations in the league for a non-max player.
The intrigue around Dinwiddie’s status comes from the combination of his contract terms and signing date. He signed a three-year contract with the Nets on December 8, 2016 and each of those elements matters for a different part of his next deal.
First, the three-year contract. Under the 2017 Collective Bargaining Agreement, only agreements running four or more seasons can be renegotiated, so Dinwiddie and the Nets cannot sign a renegotiation-and-extension even if both sides agreed on terms. That means if the Nets want to keep Dinwiddie around, he will make his minimum for the 18-19 season and cannot receive a raise. Since Dinwiddie’s final season is non-guaranteed rather than a team option per Eric Pincus of Basketball Insiders, Brooklyn cannot realistically make him a free agent and then give him a raise since another team would claim Dinwiddie in the waiver process.
While a renegotiation-and-extension is not possible, three-year contracts can be extended. The CBA is very specific about the allowable raises in extensions: up to 120% of the player’s salary in the season before the first new year of the extension or 120% of the estimated average salary, as long as neither number goes beyond a player’s maximum salary. Since Dinwiddie will make his minimum in 18-19, the pertinent figure is the estimated average salary, the same structure as the four-year, $42 million agreements for Josh Richardson and Norman Powell last off-season. The cap will grow between now and then but a modest increase on that 4/42 framework makes sense as a reasonable expectation, thought it must be noted that a four-year, ~$45 million figure is just the maximum possible for a Dinwiddie extension. The two sides could agree to a smaller value as well.
Finally, the 12/8/16 signing date plays a significant role too. The current CBA loosened extension rules somewhat and allows for extensions on three-season contracts but that can only happen on or after the second anniversary of the agreement being extended. In this way, Dinwiddie’s situation parallels Robert Covington’s because both players signed their value contracts after that season had started, requiring a wait all the way through the offseason before their pending free agency without any deal. The big difference between Covington and Dinwiddie’s situations is that the Sixers had to retain enough salary cap space to give him a raise that season via renegotiation-and-extension while the Nets would have no such restrictions since a Dinwiddie deal could not include a 18-19 raise.
The other big challenge for the Nets that needs to be reconciled is that any extension for Dinwiddie replaces his incredibly low cap hold with the actual agreed-to 19-20 salary, especially since July 2019 might be when GM Sean Marks wants to be making bigger moves. While he could create modest cap space this summer, both DeMarre Carroll and Jeremy Lin’s contracts have one year remaining and it would be much more palatable to stretch or trade one year of Timofey Mozgov’s albatross contract than the two remaining this off-season. While the front office would have to deal with the complications of D’Angelo Russell and Rondae Hollis-Jefferson being restricted free agents (with Russell’s massive, $21 million cap hold) and another hold for their 2019 first round draft pick, 2019 still looks like the best opportunity to make a big splash on a free agent and any locked-in salary for Dinwiddie above that minimum directly cuts into that flexibility.
Those circumstances and timeline give both sides plenty to think about. While Dinwiddie has been a revelation so far this season and quality point guard play makes a major difference in the modern NBA, it would take an even bigger sea change for him to overtake Russell as Brooklyn’s long-term priority at the position. Since the Nets do not need to clear and maintain cap space for an extension, there could even be a situation where the two sides continue negotiating through the 18-19 season itself since the agreement can come any time during that final season after 12/5/18. The potential for a middle ground comes from a desire for risk mitigation on both sides, as Dinwiddie will have never made more than $1.7 million and the Nets would be justifiable concerned about him hitting unrestricted free agency. It is still far too early to predict whether an extension will happen but that makes it more possible than it would be otherwise. So much can change between now and December, much less the end of the 18-19 season, but Dinwiddie’s contract situation presents an unusual challenge for Marks and the Nets’ front office.