Jayson Tatum and the Boston Celtics have reached an unprecedented five-year, $314 million contract extension, setting new NBA records for total and average annual value. This breaks the previous record set by his colleague Jaylen Brown, who inked a $285 million contract last summer.
Historic Contract and Busy Offseason
Tatum's deal comes on a busy day for the Celtics, who recently won a record 18th NBA championship. On the same day, the team renewed Derrick White's contract for four years for $126 million. Furthermore, Celtics ownership has stated plans to sell the entire franchise for "estate and family planning purposes."
Celtics' Value and Future Ownership
The Celtics are valued at $5.12 billion by Sportico, making them the fourth most valuable club in the NBA and the 21st most valuable franchise overall in the United States. The Celtics' sale is projected to set a new record for the most money paid for an NBA team, exceeding Mat Ishbia's $4 billion purchase of the Phoenix Suns in late 2022. The new owners will inherit a squad stacked with high-paid players including Tatum, Brown, White, Jrue Holiday, and Kristaps Porzingis.
Financial Implications and NBA Salary Caps
The salary ceiling and luxury tax level are likely to rise with the signing of the NBA's next television deal. The Celtics, on the other hand, face a luxury tax penalty of at least $180 million by 2026, even if they fill out the rest of their roster with players earning minimum wages. This is in addition to a payroll of almost $220 million.
Tatum’s Career and Eligibility
Tatum, who was selected in 2017, has five All-Star appearances and four All-NBA selections. His accomplishments qualified him for a contract worth 35% of the salary cap beginning with the 2025-26 season, estimated to be $154.6 million. Tatum's new contract pays $62.8 million per year, with the last season paying $71.4 million.
Comparison to Other Sports Contracts
Tatum's contract sets a high standard for professional sports. In comparison, quarterbacks Joe Burrow and Trevor Lawrence have the highest annual average salary in the NFL at $55 million, while Shohei Ohtani leads baseball with a $70 million annual average, despite the fact that 97% of his $700 million contract is deferred, lowering his current average to $43.8 million.
Impact of NBA Free Agency
Despite being under contract for another year, Tatum's extension is part of a big offseason spending spree. Since June 18, more than $2 billion in free agent contracts have been signed, with teams negotiating their own free agents before the open market began. Notably, the Philadelphia 76ers have been the most aggressive, signing five players, including Paul George, to contracts worth a combined $455 million.
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