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NBA: Thunder Signing Forward Jalen Williams To Extension That Could Be Worth Up To $287 Million

Oklahoma City has committed $822 million in contract extensions to Williams, Chet Holmgren, and Shai Gilgeous-Alexander.

Written by Matthew Gideon
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NBA: Thunder Signing Forward Jalen Williams To Extension That Could Be Worth Up To $287 Million

The Oklahoma City Thunder are signing All-Star small forward Jalen Williams to a five-year contract extension that could reach a maximum total value of $287 million, his agents told ESPN earlier today. This comes just one day after the Thunder signed teammate Chet Holmgren to a five-year extension worth at least $240 million.

Since the NBA Finals ended, the Oklahoma City Thunder have spent hundreds of millions of dollars extending their young core players. The total value of the contracts that are being signed by Holmgren, Williams, and Shai Gilgeous-Alexander could reach $822 million.

“I just want to acknowledge for a second how impressed I am with him,” Thunder general manager Sam Presti told reporters during his end-of-the-season media availability session. “We knew he was going to need surgery at the end of the season, and he played the two months with this injury… The part that I’m most impressed with is in our modern era, when someone has a poor performance, or they’re not playing to their capability in a game, and there’s a lot of attention on it, you often see a little birdie make sure that everybody knows that the player is not 100%. [It] never happened with this guy. Not one time. He powered through. He showed incredible mental endurance and security in himself. I’ve said this many times: the best players are secure players. I really thought it was pretty impressive that he just kept uh moving along with no excuses and obviously played his best basketball down the stretch of the season.”

At just 24 years old, Jalen Williams was able to earn a spot in the NBA All-Star Game along with All-NBA Third-Team honors and All-NBA Defensive Second-Team honors. He also emerged as OKC’s number-two scoring option, averaging 21.4 points per game during the playoffs.

An obvious move for the Thunder

Yesterday, I said there was never any doubt that Oklahoma City was going to sign Chet Holmgren – their number-three-scoring option – to a long-term extension. So it only makes sense that they also lock down their second-best player for the next five years as well.

Even though Jalen Williams is not the most prolific number-two option in the NBA, he is the right man for the Thunder. On top of that, going into next season, I can only think of six teams that definitively have a better number-two option than OKC: the Knicks (Karl-Anthony Towns), 76ers (Paul George), Timberwolves (Julius Randle), Warriors (Jimmy Butler), Lakers (LeBron James), and Clippers (James Harden). Mind you, that assessment is based on Jalen Williams not improving at all during the off-season, which won’t happen. That means there’s a chance Jalen Williams will be better next season than some of the aforementioned guys.

That’s the other thing we have to take into consideration when evaluating contracts: they’re based on what a player is going to do, not what they’ve already done. As a guy who averages 18.6 points, 4.6 rebounds, and 4.3 assists during his career, it could be argued that the Thunder might be overpaying Williams. But when we realize he hasn’t even turned 25, yet he has managed to improve his scoring and assist outputs every year in the league, that’s when this signing begins to make much more sense. You’re not going to pay a player $287 million if he averages 18-4-4. But if he’s good for 24-5-5, then it feels like he’s worthy of that contract.

The last important thing to consider is that this team just won a championship. You don’t let go of your best players after winning a ring because you don’t want to shell out a lot of money. In fact, it’s usually the opposite. You’ll shell out a lot of money in order to keep your roster intact so that you can continue to win more championships. That was the biggest motivator behind this massive extension.

Spend now and worry later

Oklahoma City can throw around this type of money because they have a ton of cap space. This past season, they were 25th in total player salaries. Next season, even with some of the new extensions taking effect, they’re only going to be 14th in the league in total money allocated to player salaries. They’re well within the salary cap next season. But that will change once all of these contracts kick in.

There isn’t a “hard” salary cap under the NBA’s Collective Bargaining Agreement (CBA), meaning franchises can exceed the salary cap if they wish. To keep teams in line and ensure they don’t go too far over the cap, the CBA installed a luxury tax threshold, a first apron threshold, and a second apron threshold. Teams that exceed the luxury tax ($170.814 million last season) are penalized by being forced to pay “an increasingly higher penalty on every dollar spent,” according to The Score. Teams that go over the first apron ($178.132 million last season) are met with harsher penalties that impact their ability to sign players to deals and complete salary cap-reducing trades. The last line of defense is the second apron ($188.931 million last season). On top of first apron restrictions, second apron limitations prevent teams from completing sign-and-trade deals, trades that involve multiple players, or trades that send other teams cash. If a team ends the regular season above the second apron, some of their future first-round draft picks will be frozen and made unavailable for use in trades. Basically, the luxury tax, first apron, and second apron exist to ensure no NBA team spends too recklessly.

With this new understanding of the NBA’s salary cap structure, it becomes clear that the Oklahoma City Thunder will have to re-negotiate some of the contracts they’re on the hook for over the next few years. The Thunder are currently projected to be almost $24 million over the second apron during the 2026-27 season now that they have SGA, Holmgren, and Williams’ contracts on the books, according to Spotrac. This doesn’t mean that OKC will end up trading any one of those three guys. However, it almost guarantees the Thunder will have to shed a lot of contracts and money next off-season if they don’t want to face any short-term or long-term penalties.

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