Julius Randle’s extension was one of the biggest moves of the Knicks’ offseason.
If things work out as both sides hope, the $117 million extension will be a win-win for both team and player.
Part of Randle’s thinking with regards to the extension, per a league source, was a desire to commit his prime years to the Knicks. Randle also wanted to give New York some financial flexibility.
If Randle decided to test free agency next summer, he would have been eligible for a five-year, $207 million contract. Randle, of course, would have also taken on some risk by waiting for next summer. He instead decided to take the offer on the table.
In doing so, he theoretically saved the Knicks roughly $50 million over the life of his extension.
Randle’s total extension will be worth $106 million without any bonuses. It will be worth $117 million with the bonuses.
Given those figures, here’s a year-by-year look at the difference between Randle’s extension and a max contract for Randle in 2022:
- 2022-23: $10M vs. $12M
- 2023-24: $10M vs. $13M
- 2024-25: $11M vs. $14M
- 2025-26: $12M vs. $15M
The range in the numbers above is based on the bonuses in Randle’s extension. The lower amount represents the Knicks’ savings if Randle earns no bonus. The higher amount represents the Knicks’ projected savings if Randle earns all of his bonuses.
So, assuming the Knicks would have offered Randle a max deal next summer, the club can save as much as $54 million over the life of Randle’s extension.
It’s unlikely that the savings turn into actual cap space in the first two years of the extension. But there are scenarios where the savings improve the Knicks’ ability to execute trades. There are also remote scenarios where Randle’s extension helps the Knicks create enough space for a max free agent in 2023.
That added flexibility is one reason ESPN Front Office Insider Bobby Marks felt the Randle extension could benefit both team and player:
“I thought it was a win-win for both (NYK & Julius Randle)….I know the naysayers out there are looking at the Atlanta series but I think you’ve got to look at the whole body of work.”
— Ian Begley (@IanBegley) August 10, 2021
ESPN’s Bobby Marks (@BobbyMarks42) on the Randle extension. Full show: https://t.co/h23UT8RCgH pic.twitter.com/URBZaOXT7t
“When you look at their cap sheet, they have 7 players in that ($9M-$23M) range, which is a sweet spot whenever you want to try to put a deal together.”
— Ian Begley (@IanBegley) August 9, 2021
ESPN Insider Bobby Marks talks NYK/BKN offseason on The Putback. Full show here: https://t.co/vW3w9Cd6uZ pic.twitter.com/meKXmEhSTV
Something else worth noting on the Randle extension: If he signed a max contract in 2022, Randle would have made $47 million in 2026-27. His extension ends after 2025-26. So you can include $47 million in savings when you compare Randle’s extension to a potential max contract.
But, in this scenario, you should account for the salary the Knicks would give Randle in 2026-27 if they re-sign him.
The bottom line: Randle may have saved the Knicks at least $40 million agreeing to the contract extension. If he performs at or near the level he established in 2020-21 -- and if he delivers in the postseason -- over the life of the extension, it should be a win-win for both Randle and the Knicks.
