Timing of Noel and Carter-Williams signing

Over the past week, Michael Carter-Williams and Nerlens Noel have officially signed their rookie contracts.

Wait, Noel and Carter-Williams hadn’t signed months after they were drafted? Why not?

The reason comes down to numbers and cap flexibility.

First round draft picks have a rookie scale.  Basically, the league sets a cap figure for each first round draft pick, and the team and player can negotiate around that.  The final figure that the two parties reach has to be between 80% and 120% of the league-set value.

When a rookie has been selected but not yet signed, he has a cap hold.  That cap hold is equal to 100% of the value that the league has set, and counts against the teams salary cap for that amount.  Against the Sixers cap, Noel and Carter-Williams counted for 100% of the league defined value for their draft slot.

However, drast picks frequently get more than the league defined value, usually towards the 120% maximum allowed.  According to HoopsWorld, that is what happened to Nerlens Noel, with him getting roughly 120% of the league scale for his draft slot.  Presumably, the same has happened with Michael Carter-Williams.

So, by waiting months to officially sign their contracts, the cap hold for Nerlens Noel and Michael Carter-Williams came out to be around 20% less than what they ended up signing for.  Between the two of them, that would be nearly $1 million less against the Sixers cap.

For a team like the Sixers, one who has been under the salary cap for the entire offseason, $1 million could have been the difference between being able to facilitate a trade with a team over the cap and missing out on the trade.  The Sixers were unlikely to use that extra cap space to sign a free agent to a long term deal, but for a general manager like Sam Hinkie who is constantly looking to maintain flexibility and acquire assets, being able to be the third team in a trade or facilitate a trade with a team who is looking to gain financial flexibility, this added room was important.

So why now?  Rookies cannot officially use team facilities or participate in official team drills until they have signed their contract.  For Hinkie and the Sixers, the time was right to give up their flexibility.

(Note 1: if a team has a verbal agreement with a player, the amount of that verbal agreement will count as the cap hold until the contract is signed, so neither the Sixers nor Michael Carter-Williams can admit that this had always been the plan.  But if you know Hinkie and the way he operates, it likely was).

(Note 2: Unsigned second round picks do not count against the cap at all, another reason an early second round pick is sometimes valued more highly than a very late first round pick).