Kevin Durant's new contract has kicked in.
And it contains the 5 percent bump permissible under the so-called Derrick Rose rule.
That means Durant is earning 30 percent of the salary cap rather than the previous maximum allowable allotment of 25 percent. To put that raise in perspective, Durant will now collect more than $2.5 million more per season than he would have had his extension taken effect under the previous collective bargaining agreement.
It's a difference of at least $12.5 million over the life of the five-year deal. The exact amount of Durant's new contract is unclear. It is largely dependent on both Durant's first-year maximum salary — which the league determines by a different salary cap calculation as opposed to a simple 30 percent share — and whether other details such as the percentage of annual raises have been grandfathered into the contract.
But what's clear is the Thunder ended up being big losers.
Oklahoma City gets to hold onto Durant for another five seasons. But to do it, the Thunder, out of the blue, now has to pay more than the franchise initially projected.
It represents yet another blow to the small market boys that the five-month lockout was billed as being there to protect. You can add the amnesty clause and the two-year wait for a more punitive luxury tax to take effect to the list as well. Both give big-market, high-spending teams opportunities to right their wrongs and retain their competitive advantages, something which was supposed to be curtailed following the labor dispute.
The Thunder has expressed and displayed its commitment to keeping its players. But the new rules have made that harder than ever. And the Rose rule could have the biggest impact.
The rule was included in the new CBA to adequately compensate players like Durant and Rose, the Chicago point guard who led his team to a league-best 62 wins last season. Both had tremendous success while playing on their relatively budget-friendly rookie contracts.
To qualify for the bonus, a player must be named league MVP, be voted in as starter to two All-Star games or earn All-NBA honors twice within his first four seasons. Rose won MVP last year, while Durant has been an All-NBA First Team selection each of the past two seasons. Thunder guard Russell Westbrook would be eligible for the same bump if he's named to an All-NBA team this season.
The problem, at least in Oklahoma City, is the provision puts pressure on the Thunder. Rather than help the franchise retain its two young stars, it could soon hamstring OKC and prevent it from fielding a quality cast to surround them with.
The institution of the Rose rule represents a clear rise in contract values at a time when the luxury tax is set to stiffen. That change creates a huge challenge in Oklahoma City, where available advertising dollars and revenue from the team's television contract are both a fraction of those in larger markets.
Now, there are two significant questions going forward. How will the Thunder continue to compete, and how much will it cost?