Signing Chet Holmgren to contract extension could backfire on Thunder

After winning the NBA Finals, the Oklahoma City Thunder have secured their long-term future assets, signing Shai Gilgeous-Alexander and Chet Holmgren to contract extensions in recent weeks.

Gilgeous-Alexander signed a four-year, $285 million contract on July 1, and on Wednesday, Holmgren agreed to a fully guaranteed five-year max rookie extension that could reach $250 million. 

While inking Gilgeous-Alexander was an absolute no-brainer, signing Holmgren to a contract of this magnitude could prove problematic.

The NBA Finals are not the end-all be-all for justifying paying a player, but Holmgren struggled from the field, shooting 30-of-76 (39.4%), including 3-of-19 from beyond the arc (15.7%). The 23-year-old center averaged 12.3 points, 8.9 rebounds and 1.6 blocks during the Finals.

Holmgren is still very young, making his struggles at times during the Finals understandable. To his credit, Holmgren delivered his best performance in Game 7, going 6-of-8 from the field, totaling 18 points, eight rebounds and five blocks, while dominating at the rim.

That said, the biggest reason the extension could backfire on OKC is health.

Holmgren missed his entire rookie season in 2022 due to a Lisfranc injury to his right foot. In 2024, he missed 48 games due to a fractured right hip. That is two major injuries and 130 missed games in his first three years in the NBA.

He carries a frail frame at 7-foot-1 and 208 pounds, and playing significant minutes deep into the playoffs, which is plausible for the Thunder, could wear down his body faster.

On Thursday, Jalen Williams also agreed to a five-year, $287 million max extension. Williams is undoubtedly Oklahoma City's second-best player and was dominant against the Indiana Pacers, averaging 23.6 points, 5.0 rebounds and 3.7 assists in the Finals.

Moving forward, the combination of these three contracts will account for at least 74% of the Thunder's cap space starting in 2026, according to Spotrac.

The NBA recently updated its CBA in 2023, introducing the second apron, which harshly penalizes teams who spend over a certain amount. It makes it virtually impossible to retain players even if teams draft and develop well. For example, the Boston Celtics have built their core through the draft. 

Due to these strict financial rules, the Celtics are being forced to reconstruct their roster because of the high salaries they have paid to players such as Jayson Tatum and Jaylen Brown, among others.

Oklahoma City will now enter this realm. Luckily for the Thunder, they own 11 first-round picks over the next seven years. With that much draft capital, OKC has the flexibility of rounding out the rest of the roster with cheap assets on rookie deals.

Nonetheless, Holmgren is a fine third option; however, his health is a significant concern when considering his earnings over the next five to six years.