[UPDATE: Grimes signed his qualifying offer. All the Sixers offered was the 4 year MLE or an extra $100k to waive his no trade clause. Embarrassing. This limits his ability to move next year. Per Sixers Adam, Bird Rights do not travel if he waived his no trade this year]
The deadline for NBA restricted free agents to sign their qualifying offer or an extension is today.1 The other 3 major RFA contract standoffs have been resolved one way or another already, including Jonathan Kuminga resigning with the Warriors last night. That leaves the Sixers and Quentin Grimes. Here is what you need to know.
Reported Offers
First and foremost, the qualifying offer on the table for Grimes is worth $8.7m for one year. If he signs this offer, it comes with a full no trade clause. Next year he would be an unrestricted free agent, but the Sixers would retain his Bird Rights.
Grimes’s agent, David Bauman, reported that the Sixers offered his client 4/$39m which is the qualifying offer plus 8% annual raises. The Sixers have denied this. Derek Bodner of PHLY reports that the Grimes wants a contract in the $20m+ range. He also says that the Sixers have given Grimes the option of signing a 1-year contract larger than the qualifying offer that would not come with a no-trade clause.
Grimes needs to sign a contract one way or another to play this season.
Positive Motivation
It is in the best interest of all parties to sign a multi-year deal rather than going the QO or 1-year route. Why? Well, there are advantages to both parties.
For the Sixers, it is about retaining talent and keeping optionality. They traded away Caleb Martin last year and unexpectedly upgraded with Grimes. The only problem was that Martin was signed for 3 more seasons while Grimes just had the one year left on his deal. The Sixers are not in a position where they can let talent walk, they just aren’t good enough.
It’s weird to think of it this way, but signing Grimes to a long-term deal now allows them to get rid of him in the future. Not only could Grimes nab the Sixers some draft picks on his own should they fall out of contention, but his salary would be a key part of an upgrade as well. For the most part, trades in the NBA need to have similar salaries. Due to some questionable roster building, the Sixers basically have max contracts and small contracts. They are missing those middle ground deals needed to make bigger trades possible.
For Grimes, he has bounced around the NBA a lot. The Sixers are his 4th team in 4 seasons. That stinks. Though he could obviously be traded from Philly, he at least would have more security by signing a long-term deal now while his value is high rather than risk being in a different coach’s doghouse and not playing. There are no guarantees in sports. Betting on yourself sounds good, but, in practice, it is a scary proposition.
What happens if he takes the Qualifying Offer, the “betting on himself” option? This means he would be an unrestricted free agent next year and free to sign wherever he pleases. Except, the NBA doesn’t really work like that. With all the rules surrounding player movement and the salary cap, Grimes could only sign with a team that has either room under the salary cap or if they offered him the non-taxpayer mid-level exception of about $15m. Cash is tight around the league. He might be looking at the same mid-level market he was this year (but without the restricted part). $15m is still way more than $8.7m, but the Sixers aren’t offering that apparently.
Negative Motivation
Those are all good reasons to sign a deal, but obviously nothing has happened yet. Why is that?
As much as the Sixers want to keep Grimes, they do have to deal with NBA Cap rules. No, there is no limit on what they can offer him, but there are significant penalties if they give him too much. Right now, the Sixers are sitting at $185.9m in salary for the season not including Grimes. The luxury tax threshold kicks in at $187.9m. They know they have to go over that. The First Apron, which comes with future trade barriers, kicks in at $195.9m. The Sixers would LOVE to stay under that amount by signing Grimes to a contract less than $10m (4/$45.1 with 8% raises). The real penalties kick in at the second apron of $207.8m. If Grimes wants more than $22m, that is a complete non-starter for the Sixers.
Another factor is the luxury tax. The Sixers have done whatever they could the last few years to duck the tax at the deadline, so we know this is a significant hurdle in any deal. Every dollar over the $187.9m tax line comes with an additional tax:
- up to $5m = $1.50 tax ($7.5m max)
- $5m to $10m = $1.75 tax ($8.75m max)
- $10m to $15m = $2.50 tax ($12.5m max)
- $15 to $20m = $3.25 tax ($16.25m max)
- $20m+ = $0.50 more per $5m
At $10m for this season, Grimes would cost an additional $12.75m. Considering just signing him to the qualifying offer would cost an additional $10.5m, the Sixers again would be fine with this. How much would it cost for the Sixers to give Grimes $20m this year (4/$90.1m)? Well, not only would that cost the Sixers $10m more in salary for the year, but it would come with a $38.5m tax! Do they think Grimes is worth $58.5m?2 No way.
So, what about the middle $15m number? That would come with a tax bill of $23.75m. With the additional salary, it comes to $38.75m. That’s only an additional $19m over the QO rather than $40m.
| Salary | Tax | Total |
| $8.7m (QO) | $10.5m | $19.2m |
| $10m | $12.75m | $22.75m |
| $15m | $23.75m | $38.75m |
| $20m | $38.5m | $58.5m |
As for Grimes, what if he breaks out again this year? Let’s say he ends up leading the team as a 2-way force who plays the perfect compliment to Maxey and Embiid. At $10m per year, that’s a steal for the Sixers and a huge loss for Grimes. All of a sudden, teams would love to give him their cap space if he were available. He has to get to a number that is at least semi-future proof.
Negotiation
In a negotiation, experts always say a successful one is where both parties are disappointed. The idea is that one side received less than they wanted while the other side gave more than they wanted. Basically, by meeting in the middle, it’s fair. Of course, how do you deal with one side, or even both sides, starting unreasonably? That’s what is happening now. Objectively, $8.7m for Grimes is way too low while $25m is way too high. The Sixers know that Grimes has no motivation to accept basically a 4-year QO while Grimes know the Sixers are not going to go over the Second Apron to sign him and pay a massive tax bill.
One party just needs to budge. It will happen. Despite all the posturing in the media and the denials, the two sides will talk today. How do I know? Because Jonathan Kuminga signed yesterday. His relationship with the Warriors is beyond toxic. It is very evident that they don’t actually want him and he doesn’t want to be there. He is strictly a trade asset to the Warriors and he knows it. Still, even they reached a deal at 2/$48.5m. If Kuminga and the Warriors can reach a deal, so can the Sixers and Grimes.
The number is somewhere in the $15m range. Odds are that Grimes will not be able to do better than that on the open market next year. It is a palatable number that is not enough for Grimes and too much for the Sixers. That’s a 4/$67.6m deal. It’s perfect!
All tax and contract numbers courtesy of Spotrac and my calculator.
- I’m assuming by midnight EST, I can’t find anything that says otherwise. [UPDATE: We all turn into pumpkins at midnight] ↩︎
- I know it isn’t fair to say that Grimes alone costs that much, considering it is a tax for the whole roster. ↩︎
Philly Front Office 
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