Kings G Keon Ellis' Complicated Contract Situation

Ellis was eighth in the NBA in three-point percentage (44%), and was in the 88th percentile in Basketball Index’s 3PT shooting talent while commanding just a 12% usage rate. This low-maintenance offensive profile, paired with Ellis’ defensive playmaking, perfectly supplements high-usage offensive players.

Ellis expressed his desire to remain with the team during his exit interview, noting “it would be great to remain here, for sure,” but that he would leave his contract situation to his agent.

Ellis was originally signed to a two-way contract as a UDFA in 2022 and was then converted to a standard contract on February 9, 2023, agreeing to a three-year deal. 

The contract has a team option for $2.3M next season, which must be exercised by June 29. There are several paths new GM Scott Perry can take. Both have some merit, and each has serious financial repercussions. 

Exercise TO, Extend

Should the Kings exercise their team option and keep Ellis on his bargain deal, he becomes extension eligible on February 9, 2026. If they do not reach an agreement, Ellis hits unrestricted free agency next summer. 

Sacramento is limited to extending Ellis at a first-year salary of either 140% of his final year salary or 140% of the projected average player salary for the first season of the extension. 

Ellis will make only $2.3M if the team option is exercised, so they will work off the average player salary (currently estimated at $14.4M) in 2026-27. Therefore, Ellis’s max extension would be roughly 4 years, $89 M. 

While hearing Keon Ellis and ‘max extension’ in the same sentence may sound odd, there is supporting precedent. 

Alex Caruso is a great Ellis comparison on several fronts. First, Caruso is a rugged defender and strong shooter (career 37% 3PT). Caruso recently signed an extension with the Thunder, earning the max he could receive. 

Caruso, like Ellis, went undrafted, signed a two-way contract, and was converted to a standard contract.  He was traded to the Thunder during a four-year, $36M contract he signed with the Chicago Bulls. 

Six months after the trade, after regaining full extension eligibility, the Thunder signed Caruso to a four-year, $81M extension starting at 140% of the average player’s salary. 

This is what happens when players are initially signed to bargain contracts and then break out, as Ellis has done. Though he does not have as long a track record as Caruso did when he inked his extension, Ellis will be four years younger at the time of signing and has shown plenty to believe he can sustain a Caruso-like role for years to come. 

If the sides do not agree to an extension, Ellis would hit unrestricted free agency. Since Sacramento is not typically a destination, this would be a frightening situation with a player as valuable as Ellis. 

As noted earlier, Ellis is the type of complementary player every team dreams of. Any team with cap space or the NTMLE could see Ellis as a potential fit and offer him a better situation with slightly less money. This leverage alone may push the Kings close to a max extension. 

Considering what would be left to defend the perimeter if Ellis were to hit UFA and sign elsewhere (mostly thoughts and prayers), Sacramento cannot afford to take this path without agreeing to an extension. They should do what it takes to sign Ellis long-term as early as possible. 

Decline TO, Head to RFA

Alternatively, the Kings can decline Ellis’ team option and allow him to become a restricted free agent this summer. The Kings, armed with full Bird rights, can match any offer Ellis receives in RFA. 

Some comparable players to reach restricted free agency include Herb Jones, Lu Dort, Aaron Wiggins, and Matisse Thybulle.

Herb Jones stands out as a comparable player who navigated a similar situation in New Orleans. In 2023, New Orleans declined Jones’ team option and re-signed him as a restricted free agent. 

However, Jones is distinguishable because this happened a year earlier in Jones’ contract. This only armed the Pelicans with Early Bird Rights, limiting what they could offer him in free agency (Jones received the max New Orleans could offer). 

Regardless of Jones’ situation and the Pelicans’ limitations, his adjusted salary feels like a relatively fair bar for Ellis’ market value. There is always the risk, though, that a cap space team offers Ellis a huge offer that the Kings refuse to match. The Kings experienced this side of RFA with Bogdan Bogdanovic in 2020. 

It is worth mentioning that the Kings have not paid the luxury tax since the early 2000s. Extending or re-signing Ellis in RFA, along with Keegan Murray’s extension at market rate, will likely put Sacramento over the tax and potentially the first apron in 2026-27. 

ELLIS MAX EXTENSION & MURRAY EXTENSION

ELLIS RFA AND MURRAY EXTENSION

Murray and Ellis are the only plus defenders Sacramento has right now, and two of the few players that should remain with the team regardless of how the front office decides to revamp the roster. The team will almost certainly try to make cost-cutting maneuvers, but moving off of Murray or Ellis in the name of cutting costs would be irresponsible. 

Overall, everyone should hope Keon Ellis is around for a long time. He is a great developmental story for the organization, and is only improving. Importantly, he seems to enjoy being here, and Coach Doug Christie enjoys coaching him. They should do what it takes to keep him in Sacramento for years to come.