Kings Surprisingly Pick Up Keon Ellis' Team Option

Ellis has been one of Sacramento’s greatest developmental stories over the last few years, coming in as an undrafted free agent, signing a two-way contract, and playing his way into being converted to a standard contract. He continued to build on that progress last season, developing into one of the best two-way players in the league, shooting at a top-10 rate (43.3% on 4 3PA/game) with an elite defensive profile. 

We have discussed Sacramento’s options with Ellis earlier this offseason. Sacramento had to make a decision on their team option by 5PM ET today. Exercising the option keeps Ellis at a salary that is essentially a veteran minimum - a massive bargain for a player of his caliber. 

Keeping Ellis at such a low number this season provides Sacramento with some more flexibility for this season. Signing him to a contract in restricted free agency (RFA) would have likely put him somewhere in the range below: 

As you can see, a market value contract would have added $10-16M to Sacramento’s books this season. However, there is always potential for a cap space team to come in with an above-market offer. Sacramento experienced this with Bogdan Bogdanovic - the Atlanta Hawks gave him an offer sheet worth more than the Kings were comfortable matching, and they lost him for nothing. 

There is exactly one team capable of making an offer at the high end of Ellis’s market this offseason. However, it is a team that makes a lot of sense for several reasons. 

The Brooklyn Nets are the only team with substantial cap space that could make Ellis an offer over the NTMLE (a starting salary of $14.1M). Since Naz Reid is off the market, they are probably shifting their focus elsewhere. Obviously, teams armed with the NTMLE could make Ellis an offer, but Sacramento would (and should) match those offers without a second thought. 

Considering Jordi Fernandez’s connections to Ellis and the Kings, and General Manager Sean Marks’ history of aggressive offers to restricted free agents, Brooklyn making Ellis an above-market offer was very much on the table. 

Now, Sacramento will look to extend Ellis when he becomes eligible on February 9. His max extension looks like the below table: 

As previously discussed, Alex Caruso signed this exact extension last year after being traded to Oklahoma City. That investment has clearly worked out for the Thunder thus far, and is relatively tradeable considering the manageable proportion of the cap that it eats up. 

Other comparable extensions include those signed by Terrence Mann (3/$47M), Andrew Nembhard (3/$58.6M), Grayson Allen (4/$70M), and Terrence Mann’s previous extension with the Los Angeles Clippers (2/$22M). None of these figures are adjusted for inflation, so Ellis’s value tied to percentage of the salary cap would be more than these dollar amounts. This is clearly the more expensive option Sacramento could have chosen. 

Given the Kings’ lack of leverage (the alternative being Ellis, a very good player, hitting the open market), Sacramento will likely have to come up to the higher-end outcomes to avoid Ellis hitting UFA next summer. 

In sum, there is always some level of risk associated with one of your key players hitting free agency in any form. Sacramento certainly had reason to be wary of Brooklyn aggressively pursuing Ellis, and signing him to an offer sheet far beyond what they were comfortable offering him. 

We can certainly debate which way they should have gone on the TO. Most probably expected Sacramento to decline it and opt for RFA, but they can (with some effort) justify kicking the can down the road to an extension. The decision will age very poorly if Ellis hits UFA, but we will not have to revisit that until next summer. 

For now, Scott Perry and his new front office keep a very good player on an incredibly cheap contract, which gives them more flexibility to maneuver this season than if they had declined the option and taken Ellis to RFA. 

Kings fans can rest easy knowing they have at least one more season watching Keon Ellis wreak havoc on defense and hit threes at an elite clip. Hopefully, Sacramento inks him to an extension in February so he can be a key part of the next iteration of Kings basketball.