Jrue Holiday and the Milwaukee Bucks made a major contractual commitment to each other this past weekend, but some aspects merit additional examination as the deal is perhaps less flattering than it was widely communicated.
For full context on how Holiday and the Bucks ended up with this deal, it bears returning to the first major contract in his career and a repeating history of contracts that didn’t maximize his potential earnings. Holiday signed a four-year, $41 million extension with the Philadelphia 76ers in 2012 just before the deadline for players from the 2009 draft set to come off their rookie contract. While the contract didn’t become as legendarily team friendly and league changing as Stephen Curry’s four-year, $44 million deal with the Golden State Warriors, signed on the very same day, Holiday immediately outplayed it by making his first and only All-Star team a few months later. Holiday was rewarded for signing an early hometown discount by being traded by Philadelphia’s next front office to New Orleans on draft night that year.
In 2017, Holiday reached free agency and signed a five-year, $126 million deal that was well short of a max, but had incentives and a player option for Year 5. That contract inextrictably led directly to Holiday’s latest contract, which was initially reported and described as a four-year, $160 million “maximum” extension. The deal is only guaranteed for $135 million with the remaining $25 million coming in the form of incentives, some likely and some not. In the NBA, bonuses are better than nothing, but far worse than full max guarantees; Giannis Antetokounmpo has no bonuses in his new supermax for a distinct reason.
This continues a recent trend in which the NBA is following the NFL model of initially reporting contracts as being worth meaningfully more than what they are guaranteed for and likely to eventually payout. Contracts signed in recent years by Al Horford, Buddy Hield and Luke Kennard also had these types of inflated figures attached to the reporting. With the NFL, everyone is in on the reality of fungible contract values, and one team has even turned it into a farcical fully voidable four-year, $140 million extension.
Bobby Marks described Holiday’s extension as a “blank check contract” as it was the absolute maximum he could sign for in terms of guaranteed money and access to bonuses as he could only extend at this time based on a 20 percent raise from his $25.1 million base salary with eight percent raises in each subsequent year. Because the amount Milwaukee could offer was severely constrained, it was obviously in their best interest to offer it.
Holiday not only came far short of his 10 years of service, five-year max of approximately $228 million, he didn’t even get the fully guaranteed four-year, $169.6 million deal he could have signed with a rival team in free agency. Again, that contract was not available to Holiday in the form of an extension.
Considering what the Bucks gave up to trade for Holiday, their inability to replace him if he were to sign elsewhere, coupled with their championship or bust track with Giannis, he had tremendous leverage to wait until free agency. Relinquishing that leverage by abandoning free agency just a few months before it arrives seemed excessively cautious on Holiday’s part.
Conservatively, Holiday gave up at least $34.6 million over four years in guaranteed money if you pencil in Milwaukee matching what he could have signed elsewhere. Even without the full five-year max, Holiday could have at least locked in Year 5 as a player option instead of Year 4 with an outlay of guaranteed money closer to $200 million had he waited and negotiated aggressively in the offseason.
For the sake of comparison, agent Mark Bartelstein created a surprisingly enticing multi-team market to eventually get a four-year, $120 million contract for Gordon Hayward with the Charlotte Hornets last offseason. Hayward has had a substantially more problematic injury history and is almost the exact same as Holiday while also inarguably being a vastly inferior player. This season, Dennis Schroder was offered an $80 million-plus extension by the Los Angeles Lakers and he appears set to play it out into free agency. Schroder's value has more variance than Holiday, but the smart money is that he'll do better than that on the open market.
The decision is surely comprehensible considering the compelling amount of money on the table and we have no way of knowing what Holiday earnestly values and obviously his perspective is the only one that matters. Holiday and his wife have also been extraordinarily generous with their money, evidenced by their donation of more than $5 million last year to start the Jrue and Lauren Holiday Social Justice Impact Fund.
Maybe the difference between what Holiday actually signed for and what he could have signed for felt like purely decorative numbers on a paycheck to him? Maybe his title chase with the Bucks will be demonstrably more pleasurable and more successful with the contract done and dusted? Maybe his age and injury history weighed too heavily into his own calculus to ignore? It would be presumptuous to suggest Holiday absolutely should have waited for free agency or that signing the contract will lead him to self-questioning. Your own major life decisions are always more complicated and nuanced than the same ones you witness from others at a distance.
Ultimately, this is a substantial contract for Holiday and a large financial commitment on the part of the Bucks, but it also was unmistakably one of the more risk averse deals for a player of Holiday’s caliber and leverage position we have seen in recent memory.