Lauri Markkanen and Utah Jazz contract extension grade

The Utah Jazz and Lauri Markkanen have agreed to a five-year, $238 million contract negotiation and extension, according to Adrian Wojnarowski of ESPN. The contract contains $220 million in new money and takes Markkanen off the trade market until next summer. The deal comes in under the maximum contract, 30 percent of the salary cap in the first year and eight percent raises thereafter, but will still see Markkanen make more money over the next five seasons than if he had waited to sign a deal in free agency. 

How Lauri Markkanen made more money without the max

Markkanen, heading into the final year of his deal, was set to earn $18 million. If he had waited until free agency to sign a 30 percent max contract with eight percent raises, he would have earned $227.1 million over the next five seasons. With the Jazz boosting his compensation by $24 million to $42 million, 30 percent of the cap, in 2024-25, Markkanen locked in more money than waiting to hit free agency. 

The Jazz didn’t simply increase Markkanen’s salary as a jester of goodwill, they did so they could give him an extension in the vicinity of a max contract. Due to NBA rules, teams can only extend players up to 140 percent of their current contract so long as it doesn’t surpass the maximum salary threshold. What this meant for the Jazz and Markkanen was that without the renegotiated 2024-25 salary, the maximum the Jazz could have offered Markkanen, based on an $18 million salary, was a four-year, $131.5 million extension. 

How the Utah Jazz saved money and an asset

While the Utah Jazz could have waited until free agency and signed Markkanen to a maximum contract in the 2025 offseason, by bumping his salary and locking him up now, they were able to land a few key concessions. The most relevant is that the four new years on Markkanen’s deal won’t be for the max. 

According to Yossi Gozlan, Markkanen’s salary in 2025-26 will also be for the maximum allowable salary of $46.4 million, 30 percent of the projected salary cap. However, the three remaining years will be for less than the max, and the deal doesn’t include any options, incentives, or a trade bonus. Without the exact salary details, it’s impossible to know if his salary will be a flat $47.8 million from 2026-27 through 2028-29 or if he’ll see small raises, in the vicinity of 3.5 percent, each season. 

From a raw dollars and cents standpoint, the Jazz didn’t save any money on this deal, but they are saving $13.5 million, compared to a max contract with eight percent raises, from 2026-27 through 2028-29. With where the Jazz are in their competitive timeline, spending money now to save money down the line is shrewd business. 

The structure of the deal also makes Markkanen an enormously valuable trade chip. With his contract locked in at under 30 percent of the salary cap over the final three seasons, entering his age 29 season in 2026-27, Markkanen will retain tremendous trade value. The punitive nature of the second apron is designed to dissuade teams from spending ungodly sums of money to build a talented roster, which puts a premium on players on below-market-rate deals. 

Over the past two seasons, Markkanen’s offensive box plus/minus of 5.0 has seen him finish 17th (2022-23) and ninth (2023-24) in the metric. Every player with offensive production similar to Markkanen over the past two seasons has made an All-NBA team in their career. Needless to say, Markkanen, even on a full max, would still be a coveted player, but this new extension should go down as one of the better deals in the league. 

Utah Jazz and Lauri Markkanen extension grades

The Jazz get an A+ for this renegotiation and extension. They were able to simultaneously pay a player more, save money, and create either a fantastic franchise building block or a juicy trade chip. The optionality they have is endless, and few teams are better set up for the future than the Jazz. 

Even though this extension is incredibly team-friendly, Markkanen and his agent deserve an A for their efforts. First, Markkanen locked up more money over the next five seasons than he could have made had he gone to free agency. And second, not only does he have lifetime financial security, but he has erased all injury risk. The only reason Markkanen doesn’t get an A+ is he could have conceivably secured a raise in 2024-25 and max raises throughout the deal, but that would have been a massively unnecessary concession from the Jazz. 

The Jazz and Markkanen came together and negotiated a superb deal where all sides won. The Jazz locked up their best player to a team-friendly deal, and Markkanen got paid more and sooner than he would have had he waited until free agency. There might not be a lot of winning in Salt Lake City this upcoming season, but at least the Jazz and Markkanen got an August victory.