67RIEFNS No. 35: K.J. McDaniels testing the second-round system

The NBA is full of talent, personality and suspense. During the offseason, It’s easy to forget how wonderful the league can be. So, I’ve assembled 67 Reasons I’m Excited For Next Season (67RIEFNS). They’ll be presented in no particular order.

Unlike first-round draft picks, second rounders don’t have a set salary scale. They’re free to negotiate with the team that drafted them for any contract between the NBA minimum and maximum as long as the team has enough room.

Obviously, they typically get much closer to the minimum. High second-round picks often get a couple seasons guaranteed, the first season slightly above the minimum salary with an unguaranteed third year if the team has enough cap space. It can vary quite a bit.

Players have one – rarely used – source of leverage. In order to maintain exclusive negotiating rights with a player, a team must extend him a required tender. A required tender is a one-year contract. That’s the only criterion. So, of course, those required tenders are usually for a minimum salary and fully unguaranteed.

That way, if a team fails to offer a satisfactory multi-year deal, the player can always accept the required tender and become a free agent after only one season (or sooner, if waived). It’s a last resort.

It’s also the route K.J. McDaniels took.

McDaniels left Clemson early, and I considered him a worthy of a late first rounder. Instead, he slipped to No. 32, where the 76ers drafted him.

Philadelphia wanted to sign McDaniels – according to his agent, Mark Bartelstein – to a four-year contract with the first two seasons guaranteed and the second two unguaranteed.

We don’t know exactly how much money the 76ers offered McDaniels in each season of the deal, but they gave another second-round pick – Jerami Grant – a contract that fit that format. Grant will make $377,543 more than the rookie minimum ($507,336) this season and the minimum in the three subsequent seasons. Presumably, McDaniels – picked seven spots higher than Grant – would have gotten at least that much.

Essentially, if Grant is a bust, Philadelphia will have to pay him more than they were required to offer. If he succeeds, the 76ers will have him at a discount on the latter seasons of the deal. It’s a low-risk, high-reward bet by Philadelphia. In exchange, Grant – who has never played professionally – gets more guaranteed money.

Given a similar choice, McDaniels opted for the one-year, unguaranteed tender.

McDaniels is the only 2014 second rounder to sign with an NBA team without receiving any guaranteed salary. His 2014-15 salary is also lower than the players drafted around him.

Here are all 17 second-round picks who’ve signed with their 2014-15 base salary (blue) and total guarantee (red):

Salary data via Basketball Insiders

McDaniels picked the right team to take this chance.

Players with unguaranteed contracts are usually the first cut when a team need to hit the roster limit, but the 76ers are so far below the salary floor, they can waive players with guaranteed contracts over those with unguaranteed contracts without financial consequence.

The tanking 76ers also have a barren roster, making it easier for McDaniels to earn playing time. He’s going to become a free agent by next summer, and he should have a chance to establish his value on the court.

This is probably a near-perfect storm, and I don’t see many second-round picks accepting the required tender. But it’s interesting to see just McDaniels take this path, and if he succeeds, others could follow.