The current CBA that the NBA implemented in 2011 has unintentionally made extensions seem like a bad idea. This has created an awkward situation between the Charlotte Hornets and Michael Kidd-Gilchrist. With how free agent cap holds work, it is more beneficial for a team to just wait until the following summer to sign a player instead of locking them into an extension number that is going to be higher than their cap hold. Players coming off their rookie scale contracts are restricted free agents anyway, so teams can comfortably let their players become free agents while not sacrificing much cap room in the process.
Normally, that would be the reason for a team not to aggressively seek an extension with a player. With how much the salary cap is expected to jump next season, however, it might be more beneficial for teams to move towards extending their players in the fall. Letting a player become a restricted free agent allows other teams to overpay for that player in order to sign him. This puts the former team of that player in a sticky situation - either match the offer and tie up more cap space than you planned or let that player walk away for nothing. With the cap going up, teams are going to get more liberal with offering money to restricted free agents, making it a wise idea to sign them to extensions in the fall. With the cap rising almost $20 million it won't cut into that team's cap space very much.
This is the situation that theHornets find themselves in with Kidd-Gilchrist. There isn't any news as to whether or not the Hornets are close or far apart in extension talks with their former No. 2 overall pick. As it stands today, the Hornets could get up to $36 million in cap space if they decide not to bring back core pieces like Nic Batum and Al Jefferson. If they do, then they'll still have flexibility to sign other players. $36 million is an enormous amount of cap space in the NBA, so extending MKG wouldn't be a bad idea because Charlotte will still have that extra cap.
Michael Kidd-Gilchrist was drafted second overall in the 2012 draft right behind his former Kentucky teammate, now perennial All-Star Anthony Davis. He has struggled to develop offensive skills, but since day one, MKG has been one of the best defenders in the league. He is crazy athletic, has an insane motor, long, and can guard any position 1-4 on the basketball court.
The offense still hasn't come yet, and it isn't a secret to anyone that MKG's jump shot is a work in progress. The things about Kidd-Gilchrist is he knows this and has carved out his own niche on the offensive end. He knows that teams will just clog the lane and dare him to shoot, so he often cuts into open spaces in the defense to suck in defenders. You also see this a lot with Memphis' Tony Allen, an elite defender like MKG but also a liability on the offensive end at times.
We could go back and look into past players of MKG's similar skill set to try and find a value for him but the new salary climate that the league will enter next year will be the first of it's kind. Teams are going to be more willing to pay extra to try and lure a player to sign with them. A $12 million per year player this summer would easily get over $15 million next summer if they were a free agent.
For MKG, it is even harder to peg his value in the first place, given that his main skill is his defense and he won't bring much to the table offensively other than the occasional transition dunk and give and go. He may be more valuable to the Hornets than any other team in the league. Charlotte doesn't have any other player on their roster that can defend at the individual level or with the positional versatility MKG can. We saw with Golden State this season that having players who can switch and guard multiple positions effectively makes your defense that much harder to score on.
That reason alone will make MKG a sought after free agent if the Hornets don't agree to an extension with him before the October 31st deadline arrives. With the league trending towards more switching on defense, it is reasonable to assume that Michael will have plenty of suitors next summer. With the 25% max contract tiers starting about $22 million next summer, I don't see MKG getting a max. But you can guarantee another team won't even worry about offering him somewhere between $16-$18 million per year next summer. Charlotte should try their best to get him locked up on an extension around the $14-$15 million per year range so that they can go into the summer with loads of cap room and one of their core pieces still in tact. MKG's cap hold will be north of $15 million in the summer, giving Charlotte even more room to sign free agents if they can get him for less.
Restricted free agency and extensions used to be boring. With the cap about to spike, however, that won't be the case anymore. Kidd-Gilchrist still has to agree to anything that Charlotte puts in front of him, but the Hornets need to do their best to extend him and lock him in before October 31st rolls around.