The Utah Jazz signed Philadelphia 76ers restricted free agent Paul Reed to a three-year, $23 million offer sheet on Saturday, according to ESPN’s Adrian Wojnarowski. The Sixers now have until 11:59 p.m. Sunday to either match the offer sheet or allow Reed to walk.
Utah came up with a creative structure for the offer sheet to disincentivize the Sixers to match. The first year of the contract is fully guaranteed, according to Wojnarowski, while the final two seasons (worth $15.7 million in total) would only become guaranteed if Reed’s team advances to the conference semifinals this coming season. That’s likely less of a concern to the Jazz, who are entering the second year of a rebuild, compared to the Sixers, who’ve made the Eastern Conference Semifinals in five of the past six seasons.
The Sixers seemingly have been prioritizing financial flexibility this summer as they wait to see whether they can mend fences with star guard James Harden. They reportedly don’t plan to sign Tyrese Maxey to an extension before the mid-October deadline so they can keep his relatively inexpensive $13.0 million salary-cap hold on their books for next summer instead. Since his next contract figures to start at or above $30 million, the Sixers could effectively create at least $15-20 million of cap space this way and then re-sign Maxey via Bird rights after they’ve spent that money.
Holding off on a Maxey extension reportedly isn’t the only way that they plan to keep their long-term books clean. During a recent episode of the Hoop Collective podcast, ESPN’s Brian Windhorst said the Sixers had “not shown an interest in trading Tobias Harris,” who has a $39.3 million expiring contract.
“Harris has been involved in some trade discussions, and they have not shown an interest in trading him,” Windhorst said. “And if anybody does trade for him, it’s been made known that it would only be for expiring contracts.”
It’s fair to wonder what the Sixers might have up their sleeves. Are they angling for a big free-agent splash such as Kawhi Leonard, Pascal Siakam or OG Anunoby next summer? Are they hoping to be a salary-dumping destination, like how the Jazz effectively got John Collins for free this offseason? Could they take on unwanted salaries to replenish their depleted stock of draft picks?
Whatever the case, they might prefer not to spend nearly $8 million per year on a backup center like Reed, even if starting center Joel Embiid is likely to miss at least 15 or so games during the regular season.
Wojnarowski noted that if the Sixers do match the offer sheet, they would exceed the NBA’s $165 million luxury-tax threshold “and incur an additional $14 million in luxury-tax penalties.” However, it’s worth noting that they’re on track to go into tax territory either way.
With 12 players currently under contract, the Sixers are only $1.5 million below the tax line, and each minimum salary counts as $2.0 million against the cap. Even if they let Reed walk and round out their roster with three min deals, they’ll be $4.6 million above the tax line, which would cost them roughly $6.85 million in tax.
Either way, the Sixers wouldn’t be in line for the nine-figure tax bills that the Golden State Warriors and Los Angeles Clippers paid last season. But if they do finish in the tax this year, they’ll become subject to the repeater tax next year, which becomes even more punitive after the 2024-25 campaign.
The Jazz appear to be using their $7.7 million room mid-level exception for Reed’s offer sheet, although it’s unclear whether they’re using the full amount. Wojnarowski reported the final two years of the deal are worth $15.7 million combined, which suggests Reed’s starting salary might be closer to $7.3 million with 5% annual raises. He’d then earn roughly $7.7 million in 2024-25 and $8.0 million in 2025-26 if those final two seasons on his contract became guaranteed.
At the moment, the Sixers’ books are relatively clean in 2024-25. Embiid is the only player guaranteed to be under contract at $51.4 million, while P.J. Tucker has an $11.5 million player option and the Sixers have a $4.0 million team option on Jaden Springer. Even if Tucker picked up his option and the Sixers picked up Springer’s, they’d have only $67.0 million committed to those three. Add in Maxey’s $13.0 million cap hold and Reed’s presumptive $7.7 million salary, and they’d be at $87.6 million with five players under contract.
The salary cap can go up by no more than 10% year-over-year under the new collective bargaining agreement, which means the highest it will be in 2024-25 is $149.6 million. If the cap does rise by the full amount again, the starting salary of a max contract will be $37.4 million for someone with 0-6 years of NBA experience, $44.9 million for someone with 7-9 years and $52.4 million for someone with 10 or more years.
If the Sixers relinquished the rights to all of their other free agents next summer—including Harden, Harris and De’Anthony Melton—they’d also have to add seven incomplete roster charges to their books ($1.2 million each), which would bring their total to $96.3 million. They’d still tentatively have enough cap space to offer a max contract to a player with 10-plus years of NBA experience and could re-sign Maxey afterward.
There’s no guarantee that the 2024-25 cap does rise 10%, which is another variable that the Sixers must consider while weighing whether to match Reed’s offer sheet. If it lands at $142.0 million instead—as currently projected—they’d have only $45.7 million of cap space. That would still be enough to offer a max contract to someone with 0-6 or 7-9 years of NBA experience, but it wouldn’t cover a max for someone with 10-plus years.
The uncertainty about Harden’s long-term future, concern about activating the repeater tax and desire to maintain financial flexibility might be enough to deter the Sixers from matching Reed’s offer sheet. They did sign veteran center Mo Bamba to a one-year, veteran-minimum deal to give themselves some backup behind Embiid in case Reed did walk, and they brought back Montrezl Harrell on a one-year vet-min deal as well.
Still, losing Reed would be a tough pill to swallow for many Sixers fans who’ve become enamored with “BBall Paul” over the past few seasons.
Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac or RealGM. All odds via FanDuel Sportsbook.