LOS ANGELES, CA - MARCH 24: LA Clippers forward Paul George (13) during an NBA basketball game game ... [+]
In roughly three months, the NBA's free-agency frenzy is set to kick off. Depending on how the next few months shake out, star Los Angeles Clippers forward Paul George could wind up being the top player on the market.
George can become an unrestricted free agent this summer by declining his $48.8 million player option for the 2024-25 season. The same was true of Kawhi Leonard, except he signed a three-year, slightly-below-max extension with the Clippers in mid-January. Paul has been eligible to sign an extension all season, but he hasn't reached an agreement yet.
The lack of a deal suggests that the Clippers aren't willing to offer as much as George hopes to receive on his next contract. Longtime NBA insider Marc Stein recently suggested as much, writing that there are "suspicions" that the Clippers' "offers to George have fallen an unknown amount shy" of the three-year, $149.7 million extension that Leonard signed.
If the Clippers aren't even willing to go that high, then they don't need to worry about the Over-38 rule in the collective bargaining agreement hindering them. But the Over-38 rule will limit the amount that they can offer George, which will take away their primary financial advantage over any other team in free agency.
George is finishing up his age-33 season and is set to turn 34 in early May. The Over-38 rule stipulates that any season that follows a player's 38th birthday "shall be attributed to the prior salary-cap years pro rata on the basis of the salaries for such prior salary-cap years." A four-year deal either with the Clippers or another team wouldn't be subject to this rule, but a five-year extension with the Clippers would.
In other words: Based on the current $141 million salary-cap projection for the 2024-25 season, the Clippers can't offer George more than $221.1 million on his new deal. They could structure it as a four- or five-year contract—in fact, the latter might make more sense to reduce his cap hits in the last few seasons—but that is not a huge advantage over the four-year, $212.2 million contract that any other team can offer him.
That means because of the Over-38 rule, the Clippers can offer George only $8.9 million more than any other team. That's before factoring in California state taxes, which might completely level the playing field, if not throw the financial considerations in favor of another team.
California has a 13.3% tax rate for people who earn more than $1 million annually, a category which George clearly falls into. According to Forbes' income tax calculator, George would owe $6.5 million in state taxes alone on his projected $49.35 million salary for next season. So-called "jock taxes" complicate that estimate, but either way, he'd be giving back a substantial amount of his salary via state tax.
The same would not be true in Pennsylvania, whose state tax rate of 3.07% would cost him only $1.5 million in taxes. Luckily for George, the Philadelphia 76ers lurk as a viable option if he's open to leaving the Clippers.
"League sources say that Philadelphia continues to loom as an eager George suitor should he make it onto the open market and give the 76ers their formal opportunity to try to lure him across the country," Stein wrote. "The Sixers are said to maintain interest in George despite the widely held presumption that he and Leonard want to keep playing together in their native Southern California."
The Sixers could create nearly $65 million in cap space this summer by renouncing the rights to all of their free agents, trading their 2024 first-round pick and waiving Paul Reed (if they don't win a playoff series). They could have around $16 million left over after signing George to a max deal if they're willing to go that far.
Would a core of George, reigning league MVP Joel Embiid and Tyrese Maxey along with $16 million in cap space and a $8.0 million room mid-level exception outweigh what George has in L.A. alongside Leonard, James Harden and the Clippers' supporting cast? George might be waiting to see how the next few months unfold before deciding either way.
If the Clippers flame out in the first or second round of the playoffs, they'll have to weigh whether it's worth running back this core. Re-signing both George and Harden would likely put them above the second apron, which would limit their trade and free-agency flexibility. They wouldn't be able to aggregate contracts in trades, take back more salary in a trade than they send out or trade first-round draft picks seven years into the future, which is one of the only first-rounders that the Clippers can still trade.
George might just want to see how the playoffs and Harden's free agency shake out before deciding on his future. Perhaps he and Harden will both re-sign this summer and take similar discounts as Leonard.
But if the Clippers are willing to offer George only a three-year deal in the ballpark of what they gave Leonard, the four-year, $212.2 million max contract that the Sixers can offer him would blow that out of the water. In that scenario, George would have to decide whether he's willing to sacrifice his partnership with Leonard and leave L.A. for an extra one year and $60-plus million in financial security elsewhere.
Even if the Clippers are willing to offer him a four-year max—which seems highly unlikely at this point—the Over-38 rule would prevent them from offering even more. That means the Sixers and other suitors won't be at a major financial disadvantage if they get a chance to make a real run at George in free agency.
Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac or RealGM. All odds via FanDuel Sportsbook.
