Jrue Holiday’s $ 37.3 million player option for the 2024-25 NBA season loomed as a potential problem in the Celtics’ near future.
Boston traded for the 33-year-old guard in October, and there was always a risk that he would be a one-year rental if he chose to leave in free agency in the summer of 2024.
That risk is now gone. The Celtics and Holiday agreed on a four-year, $ 135 million extension Wednesday night, ESPN’s Adrian Wojnarowski reported.
The deal will keep Holiday and the rest of Boston’s core together through next season at the bare minimum. Still, the extension carried a hefty price tag. Is the benefit worth the cost?
What is Jrue Holiday worth?
While Holiday isn’t quite at the All-Star level he reached last season with the Bucks, he’s still had an amazing year as the Celtics’ fourth or fifth option. His points are way down, from 19.3 per game last season to 12.5 this year. But he’s shooting a career-best 43.1% from 3, including an incredible 60% (!!!) from the corners, per Cleaning the Glass.
Holiday’s defense has similarly taken a tiny step back from his All-Defensive first team selection a year ago. Make no mistake, he’s still elite on that end of the floor. He has a good chance of earning All-Defensive second team honors this season. He’s in a new role where coach Joe Mazzulla trusts him to do everything, including playing in the middle of Boston’s zone at times.
All of that adds up to a player who is beginning his decline, as most guards do when they hit the wrong side of 30. DARKO, one of the most well-respected all-in-one metrics, shows that Holiday has fought hard to keep a very long peak. But he’s starting to trend downward.
My simple salary model has Holiday worth about $ 28 million next season based on his production. That will obviously decline as he gets older.
With the extension, Holiday will have an annual average salary of $ 33.75 million over the course of his next four years, meaning that this deal is an overpay on what he is worth. This is a very bad free agent class though, so who knows if a team would have overbid for his services if he had opted out.
Was it worth it for the Celtics to overpay?
There are many reasons why it made sense for the Celtics to give Holiday an extra boost on his salary.
First, they are the championship favorites this year in the betting markets. Getting Holiday taken care of now removes a potential distraction as they head into the postseason.
Second, while Holiday may have gotten a generous bag, the structure of this contract actually saves the Celtics a lot of money in the short term.
Holiday will make $ 30 million in the first year of his deal, per ESPN’s Bobby Marks. Not only is that a considerable haircut from the $ 37.3 million that he could have opted into, it also saves the Celtics over $ 35 million in luxury tax payments, per Marks.
This is similar in theory to what the Bucks did with Khris Middleton last summer, having him opt out of his $ 40 million player option to sign a three-year, $ 102 million deal that saved Milwaukee money in the short run.
Third, the Celtics have now added flexibility to get under the first apron at next season’s trade deadline, per Marks. Those apron penalties can be severe, both from a financial and team-building standpoint. If the Celtics can get under the apron, then it makes future trades easier to pull off and also helps their ability to sign waived players mid-season.
From Holiday’s perspective, giving up a little money next year earned him a lot down the line. It’s hard to imagine another team offering him four years (he has a player option for the fourth year that he will almost certainly exercise).
This deal will take him through his age 37 season and will not look great by then. Yes, the cap is rising. But he’s going to be earning a little less money (an estimated $ 37.4 million) than Tyrese Haliburton and Anthony Edwards ($ 43.7 million) in their primes. On the other hand, this gives the Celtics a multi-year window to win several championships.
Boston will have big tax payments once they re-sign Jayson Tatum to a new supermax deal in the summer of 2025. Derrick White is going to be a free agent at that same time, earning a big raise from the $ 19.6 million he will make next season.
Will this make it more difficult to keep White? It was already going to be challenging, and it will make the tax bill tougher to swallow. But if Boston ownership is willing to pay, then it won’t be an issue.
Jrue Holiday contract extension grade
This is an A+ deal for Holiday and a B+ for the Celtics.
Holiday gets a chance to win multiple rings and he gets a huge payday. What’s not to like from his end?
For Boston, they did what they had to do in order to keep their core together. They deserve praise for being willing to field a very expensive team. This will hamper their flexibility to add new players, but do they need to? They have one of the most solid top six rotations that we’ve seen in modern history. That should stay true for the foreseeable future.
The alternative, letting Holiday walk in free agency, would have been catastrophic. This mitigates their risk at a cost that they were willing to pay.
Four years from now, this contract extension won’t look great. But today, it is a win.
