Why everyone wins with Kawhi Leonard-Raptors extension

The $11-million discount the Raptors got on Leonard’s contract represents $5.5 million per year of wiggle room general manager Bobby Webster will have heading into the next two off-seasons. It could be the difference in signing a veteran free agent to shore up a roster weakness or build on a strength. 

The deal and the way it’s structured is also roughly comparable to a couple other contracts some older, yet highly productive, NBA stars have signed recently. 

Kevin Durant, for example, signed a two-year, $90-million extension with the Houston Rockets last year that kicks in for this season. And while that’s less than Leonard got with the Raptors, Durant’s deal covers his age 38 and 39 seasons. It’s a lot of money, but like Leonard, Durant in his late 30s remains one of the NBA’s best players. 

And then there’s the three-year, $96.5-million deal that James Harden signed with Cleveland this summer that will cover his age 37, 38 and 39 seasons. That matters in a different way, but we’ll get to that in a minute. 

The deal is also indicative of Leonard’s determination to make things work with the Raptors. 

How robust the market was for his services leaguewide is something we can’t quite know, but coming off an all-NBA season, it’s not hard to imagine a number of contenders and near-contenders believing Leonard could be the difference in winning a championship because it’s obvious to anyone who has ever seen him play at full gas that he is just that.

But Leonard put out the bat signal that he wanted to play in Toronto, that the only franchise he wanted to sign an extension with was the Raptors, and here we are. The framework of the contract remained consistent from when the Raptors first entertained the idea of acquiring Leonard back in June. 

Leonard then waived his $7.5 million trade kicker to make the deal work under the Raptors’ current cap situation based on the $50.3 million he’ll earn this season — another act of faith, by NBA standards. 

That all needs to be considered when evaluating the other element of the deal that raised some eyebrows around the NBA: Leonard’s deal includes a player option for its final season in 2028-29.

When I was talking with one long-time NBA executive about what the final deal might look like, he speculated that the Raptors would push to have only a partial guarantee for the second season of the deal or that the second year would only fully guarantee if Leonard — forever an injury risk — met certain thresholds for games played. 

Instead, the Raptors gave Leonard a fully guaranteed deal that includes that player option on the second year, which is generally considered a concession by the team to the player. 

That’s because, typically, a player option is nothing but a headache for the team. If the player underperforms or is injured or both, he picks up the last year of his deal and the team is stuck. Conversely, if the player is over-performing or has an eye on another market, the threat of him declining the option can force a team’s hand. 

“I don’t understand why they would do that; there was no leverage here,” one prominent player agent said when asked about the deal. “It’s a great deal for Kawhi. Any time you get the player option it’s a win for the player.”

But again, context matters. 

If we take Leonard at his word, he very much wants Toronto to be his final NBA destination. 

“I’m not really championship chasing. … I didn’t want to put on a thousand jerseys,” Leonard said during the most recent episode of Open Gym, the Raptors’ in-house documentary program. “This city took a liking to my family, and I took a liking to this city … my son was born here, and he’s been asking me forever when he’s going to come back. Now he’s back, and he’s able to see it rather than me tell him the great stories that happened.”

With that in mind and given that it’s pretty unlikely that Leonard will go ring shopping heading into his age-37 season, the player option can be looked at a little differently. 

Let’s presume that the Raptors, with Leonard continuing to defy the aging curve (his 27.9 points, 6.4 rebounds, two steals and 62.9 true-shooting marks with the Clippers last season represented not only one of Leonard’s best but one of the best seasons ever by a player in their mid-30s), head into the 2028-29 season with championship aspirations, but in need of one more piece. 

That’s where the player option could be a win for everyone concerned. 

In that scenario, Leonard would opt out of his deal and sign one more for, just to pick a number, two years and $80 million. Leonard gets another $23 million in his jeans and the Raptors would head into that third off-season with an extra $17.5 million to spend, which could very well be enough to sign that missing piece. 

The rough analogy here is Harden, who opted out of the final year his deal on which he was slated to earn $42.3 million with Cleveland this year and signed for three at $96.5 million, giving the Cavaliers an additional $11 million of cap space which enabled them to sign Peyton Watson, the rangy free-agent wing Cleveland hopes will vault it into Finals contention. 

So sure, Leonard gains some theoretical leverage by having a player option on the final year of his new deal, but given everyone’s goal that his return to Toronto is a homecoming rather than a way station, it’s more about the potential for making the final years of his career as competitive as possible. 

There are still plenty of ifs and risks, as with any NBA contract that runs into nine figures and especially so for a player in his mid-to-late 30s. 

But at least with Leonard, the Raptors know exactly the player they are getting, and precisely what it costs.