Utah Jazz forward Lauri Markkanen becomes eligible Tuesday to have his contract renegotiated and then extended. Markkanen would become the 13th NBA player since 2010 to have his current salary restructured and extended.
The decision to reach a new contract could have a ripple effect throughout the league. Markkanen is not only viewed as one of the top free agents in 2025 but also a trade target by many teams.
Tim MacMahon and Bobby Marks teamed up to break down the biggest questions facing Markkanen and the Jazz.
What is his current contractual status?
Markkanen is in the final year of a four-year, $67.5 million contract that was signed in 2021.
The contract was part of a three-team deal in which Markkanen was traded to the Cleveland Cavaliers, Derrick Jones Jr. was traded to the Portland Trail Blazers and the Chicago Bulls received a top-14-protected first-round pick from Portland and a 2023 Denver Nuggets second-round pick (via Cleveland).
Markkanen was then sent to Utah in 2022 as part of the Donovan Mitchell trade.
Team executives polled by ESPN consider Markkanen's $18 million salary this season as the best value of any player named an All-Star in the past two seasons and not on a first-round rookie scale contract. In his first two seasons in Utah, Markkanen averaged 24.5 points, earning All-Star honors and the Most Improved Player award in 2023 and is one of three 7-footers to make 1,000 career 3-pointers in NBA history, along with Dirk Nowitzki and Channing Frye.
How have the Jazz approached this situation?
Utah has been willing to listen to offers on Markkanen since the transaction cycle leading up to the 2024 trade deadline this past February, but that doesn't mean it has been actively shopping its best player. The Jazz's asking price for Markkanen has been high, and they have no intention to compromise. To trade for Markkanen, a team will have to make an offer the Jazz can't refuse.
Sources told ESPN the more likely scenario is the Jazz will use salary-cap space to give Markkanen a significant raise while signing him to a contract extension.
"We'd love to be here," Markkanen said when his contract was broached during his media exit interview at the end of last season. "I've said it multiple times. My family likes to be here."
Why is Aug. 6 an important date?
It is the first day that Markkanen is eligible to renegotiate his $18 million salary and then extend with the Jazz -- and it is exactly six months ahead of the Feb. 6, 2025, trade deadline.
A player who signs an extension cannot be traded for six months, which makes the timing of a potential Markkanen extension of great interest around the league. If he signs it on Aug. 6, Markkanen can be moved on the day of the trade deadline. If he waits one day to sign, Markkanen can guarantee he won't be in the trade market this season.
The Aug. 6 date when Markkanen is allowed to renegotiate and extend is the reason Utah has operated its offseason like a team restricted by the rules of the collective bargaining agreement's second apron -- and not one with $37 million in cap space. Since the start of July, the only players Utah signed were 2024 first-round picks Cody Williams and Isaiah Collier.
The Jazz drafted Kyle Filipowski in the second round and reportedly agreed to contracts with free agents Drew Eubanks and Johnny Juzang. Those three players remain unsigned, allowing Utah to preserve cap flexibility to renegotiate a new contract for Markkanen and also take back salary in a trade. Once cap space is used, the Jazz will then sign the three players to second-round, room and early-bird exceptions.
An added rule to the 2023 CBA requires teams to spend 90% of the salary cap by the first day of the regular season on Oct. 22. If the criteria is not met, the team forfeits the luxury tax distribution it would receive at the end of the season.
The Jazz have $103 million in committed salary and must spend at least $23.7 million more.
What type of contract can the Jazz offer?
Markkanen has been eligible to sign a four-year, $113 million extension since free agency opened in early July. Because he is limited to only a 140% increase in Year 1 off his current $18 million salary, the new contract is considered below market value.
Where the Jazz benefit: the $37 million available in cap space and Markkanen reaching the third-year anniversary of the four-year contract he signed in 2021.
Because both criteria have been met, Utah is allowed to increase his $18 million salary this season up to $42.2 million (the maximum for a player with seven to nine years of service) and then extend an additional four seasons. The total amount of maximum new money over this season and the next four years is $232 million.
The $24 million in cap room used, combined with new contracts for Eubanks and Juzang, would put Utah at the minimum salary floor.
There are two other options in how Utah can structure Markkanen's next contract.
The Jazz can increase his current salary to $42.2 million, decreasing the first year of the extension to $35 million and then increasing in Years 2 to 4 by 8%. The total amount of new money would equal $180 million.
The Jazz would still have $13 million available to use in a trade or sign a free agent.
Below is what the renegotiation and extension would look like:
2024-25 -- $42.2 million ($18.1 million plus $24.1 million)
2025-26 -- $35.0 million
2026-27 -- $37.8 million
2028-29 -- $40.6 million
2029-30 -- $43.4 million
In the past two seasons, Jonathan Isaac, Jordan Clarkson and Myles Turner increased their current salaries with cap space and then decreased the first year of the extensions. (For example, Isaac's $17.4 million salary this season increased to $25 million. The first year of the extension in 2025-26 starts at $15 million.)
The trade-off for taking less is Markkanen signing the extension after Aug. 6, thus eliminating the distraction and possibility he could get traded on Feb. 6. Finding some sense of stability at least for this season should be an important consideration given Markkanen, 27, has been traded three times since 2017.
The Jazz could also renegotiate his salary this season to $33.1 million and then extend for four years and $207.8 million. This is a similar contract setup to what Domantas Sabonis and the Sacramento Kings agreed to last July.
Is Markkanen or the Jazz better off waiting until next summer?
Rival executives told ESPN that Markkanen would have more trade value after he signs a long-term extension than he would if he were entering the final season of his contract.
Markkanen's preference, as he has said, is to play for a winning team in Utah. Signing his extension after Aug. 6 would allow Markkanen and the Jazz front office to evaluate an evolving situation and make a more educated determination on whether Markkanen's prime can realistically line up with Utah's path toward contending. The Jazz finished 31-51 last season and missed the postseason.
The amount of money available to sign free agents outside of a team's own players next offseason is not expected to improve despite an infusion of new television money.
Despite a projected 10% salary cap increase, ESPN is projecting only Utah and the Brooklyn Nets with more than $30 million in available cap space.
What is the state of the rest of the Jazz roster?
Did you watch the Salt Lake City summer league? The majority of Utah's roster suited up for those games, an indication of a franchise that's pretty early in a rebuilding process.
The Jazz roster will feature seven picks from the past three drafts, a group headlined by guard Keyonte George, forward Cody Williams and center Walker Kessler. The development of the franchise's young players will be a top priority for coach Will Hardy and his staff.
The Jazz have been active during the past two trade deadlines, but a few veterans remain on the roster along with Markkanen, all of whom are candidates to be traded.
Guard Jordan Clarkson is the lone player from the Jazz's most recent playoff team behind Donovan Mitchell and Rudy Gobert (2021-22). Collin Sexton, another score-first guard, arrived with Markkanen from Cleveland in the Mitchell deal. Forward/center John Collins puts up numbers but proved to be an awkward fit after arriving from the Atlanta Hawks in a salary-dump deal last summer.
Which teams are keeping a close eye on Markkanen's situation?
The Golden State Warriors have been the most aggressive suitor for Markkanen, but Utah and Golden State have not come close to getting a deal done. One source told ESPN the Warriors have been "very protective" of second-year guard Brandin Podziemski, the player on Golden State's roster who most intrigues the Jazz. Golden State has also not indicated an inclination to meet the Jazz's high threshold for draft compensation in return.
The Warriors are operating from a position of vulnerability when it comes to draft capital and how much salary they can receive. Golden State has two available unprotected firsts (a combination of 2025 and 2027 or 2026 and 2028) and a 2030 first if it falls in the top 20. And because of the De'Anthony Melton, Kyle Anderson and Buddy Hield signings this summer, Golden State is not allowed to take back more than $533K in salary.
The San Antonio Spurs had preliminary discussions before the NBA draft in June with the Jazz about a deal that would pair Markkanen with 2023 No. 1 pick Victor Wembanyama, but those talks did not gain any traction. The Kings also showed interest in a Markkanen trade, but Sacramento moved on to making a sign-and-trade deal to acquire DeMar DeRozan.
The Oklahoma City Thunder are worth keeping an eye on, simply because the stockpile of draft capital accumulated by general manager Sam Presti gives them the ability to outbid other teams. The Houston Rockets are another team with the assets to be aggressive in the trade market.