How much should the Pacers pay Paul George?

With Paul George and the Pacers, it is not a question of whether to keep him, but rather how much to pay him. The Pacers have until October 31st to sign George to a contract extension. If the two sides reach agreement before that date, the team is eligible to sign him for five additional years (if he is selected as the team’s "designated player"). If the budding superstar is selected for an All-NBA team two seasons, voted in as an All-Star twice, or awarded the league’s MVP award, he is eligible for an even larger extension as part of the new CBA’s "5th Year 30% Max Criteria".

Earlier in the summer, George admitted that he and the team had already begun negotiating the terms of a possible extension, stating:

"We’re talking now. It’s still in the rough draft form. It’s a long summer and we’re not rushing it. I think we’re both on the same page as far as myself and the Pacers. … I’m just focusing on getting better and making sure whatever deal that we do come up with, that I’m ready for it."

Larry Bird echoed a similar sentiment in an interview with 1070 The Fan, Indianapolis, when he stated:

"We’re trying to sign Paul. It’s not as easy as it looks. We’re going to make a major offer to him. It’s going to be up to him whether he accept or not or goes out into the free-agency market. If he does, we’re going to match. But we’d like to get something done. We know he wants to be here. He’s a great kid. He’s one of the nicest young men you’ll ever meet, and he’s a good player. And we think we should take care of him."

As such, it is clear that both sides are more than interested in reaching agreement on an extension prior to October 31st. However, as Larry Bird explained, if the two sides cannot come to terms, the Pacers plan to match any offer Paul receives in restricted free agency next summer. That being said, just how much should the Pacers offer George? Is it in the team’s best interest to offer him a max contract now in order to avoid the drawn out process of matching an offer from another team (i.e. the Lakers) next summer?

Take a look at some recent max contract extensions:

Blake Griffin:

2012 Contract Extension: 5yrs, $78.6M

Pay Bump via Max Criteria: $15.7M

Total: $94.3M

Stats (season prior to extension): 20.7ppg, 10.9rpg, and 3.2asp (0.529FG%, 0.611FT%)

James Harden:

2012 Contract Extension: 5yrs, $80M

Pay Bump via Max Criteria: ineligible

Stats (season prior to extension): 16.8ppg, 4.1rbg, and 3.7asg (0.491FG%, 0.842FT%) (as reserve)

· Turned down $54M offer from OKC Thunder

John Wall:

2013 Contract Extension: 5yrs, $80M

Pay Bump via Max Criteria: TBD

Stats (season prior to extension): 18.5ppg, 4.0rpg, and 7.6apg (0.441FG%, 0.804FT%)

Of these extensions, John Wall’s is the most meaningful. Since being drafted, Wall and the Wizards have posted a less than impressive record of 72-158. Wall’s first few seasons in the league have often been described as inefficient. At the end of his second season, Wall shot the ball at 42.3% overall and averaged 3.9 turnovers per game. Moreover, Washington has been in the draft lottery each season that Wall has donned a Wizards uniform. He has never been an All-Star, and he has yet to be selected for an All-NBA team. However, upon returning from injury last season, Wall finally began to exhibit the glimmers of a star most anticipated him to be. During that span, Wall posted 18.5ppg, 4.0rpg, and 7.6asp. The Wizards went 24-25. Although the Wizards have yet to make it to the postseason since Wall’s arrival, his potential alone was reason enough to offer him a max contract. If Wall continues to improve next season, would Washington have regretted not paying him the max to keep him in DC? Most importantly, would the Wizards have been able to attract someone of Wall’s caliber to the Wizards in free agency if they had let him walk?

These are both questions the Pacers need to consider when negotiating a contract extension with Paul George this summer. Are the Pacers justified in offering Paul George a max contract based on potential? Is signing him to a max contract worth losing Danny Granger and Lance Stephenson next summer. These are tough questions to answer. George’s stats last season are comparable to the aforementioned max contract earners.

Paul George:

Contract Extension: TBD

Pay Bump via Max Criteria: Eligible if selected to an All-NBA again

Stats (season prior to extension): 17.4ppg, 7.6rpg, 4.1apg, and 1.8spg (0.419FG%, 0.807FT%)

Is it likely that the Pacers will be able to attract a free agent to Indianapolis with similar production and potential to George in the future? The answer to this question is most likely no. From George’s perspective, what incentive does he have to sign for less than the max when he just watched Wall, with a less impressive resume than himself, sign a 5 year $80M contract?

The only reason there is for George to agree to sign less than the max is his desire to win a championship. If George wants to compete long-term in Indiana, it may be necessary for him to take a pay cut. If he takes less, it will be more likely that the Pacers can resign Stephenson or Granger (or any other free agents) next summer. The Pacers cannot be tax payers. If the team wants to have financial flexibility in the future, it might be necessary to try to persuade George to take less than the max.

Take a look at some recent examples of stars who took less than the max to help their team stay competitive:

Rajon Rondo:

2009 Contract Extension: 5yrs, $55M

Stats (season prior to extension): 11.9ppg, 5.2rpg, 8.2apg, 1.9spg (.505FG%, 0.642FT%)

(postseason): 16.9ppg, 9.7rpg,9.8apg, 2.5spg (.417FG%, 0.657FT%)

Tony Parker:

2010 Contract Extension: 4yrs, $50M (not extension to rookie contract)

Stats (season prior to extension): 16.0ppg, 2.4rpg, 5.7apg (0.48FG%, 0.756FT%)

(postseason): 17.3ppg, 3.8rpg, 5.4apg (0.474FG%, 0.595FT%)

By taking less money, both of these players helped their teams remain competitive in the postseason. After Rondo’s performances in the 2009 and 2010 postseasons, he easily could have tested restricted free agency and probably earned more money in the market, but the possibility of winning a championship, adding role players, and keeping Boston’s Big Three together in the future was more important. After inking his new deal, Rondo was quoted as stating:

"I'm excited, thankful, humbled. Nothing changes, though. There's still one goal in mind. It's a great opportunity, but I'm focused on winning a championship."

Rondo’s agent, Bill Duffy added:

"There's always the possibility that there would be more money in a free-agent situation, even though it's harder for a restricted free agent. But because Rajon is in such an ideal situation, it was my responsibility to promote continuity."

Similarly, Tony Parker agreed to take less money in order to remain with the Spurs. Although not an extension to his rookie contract, Parker’s willingness to except less money guaranteed that the Spurs would be able to keep their championship-caliber core together. Last season, Parker’s name was brought up amongst those deserving of league MVP honors. He nearly led his team to an NBA Championship, yet he made less money than Deron Williams, Derrick Rose, Chris Paul, and Russell Westbrook. Why? Because, like Rondo, winning a championship, adding role players, keeping the core together, and being able to resign drafted talent meant more than a big pay day. In Parker’s words:

"It's home here. I love being with Pop. I love being with Timmy and Manu. I'm happy to keep the adventure going with them."

So where does this leave Paul George? Certainly, George has started making himself more at home in Indiana. Recently, George went as far as to say:

"I'm happy to be in Indiana. I'm happy to be where I am. If I was going to leave Indiana and come to the Lakers, it just wouldn't be a smart move for me. We got a great thing going right now."

Lately, he has been seen at the Purdue-ISU football game, Lucas Oil Stadium, and various local restaurants. Rumors have even swirled that he is moving into a more affluent neighborhood in Indianapolis. As stated previously, with George and the Pacers it is not a question of whether they should keep him or whether he will stay, but rather how much he should be paid. With the October 31st deadline fast approaching, will George get a max contract similar to John Wall? Or, will he accept less like Rajon Rondo or Tony Parker?

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