James Harden takes $15 million pay cut to help Sixers compete for title

FILE – Philadelphia 76ers’ James Harden gestures during the first half of Game 3 of the team’s NBA basketball second-round playoff series against the Miami Heat, May 6, 2022, in Philadelphia. A person familiar with the situation said Harden chose not to exercise his $47.4 million option for next season and will become a free agent — but with no designs on leaving Philadelphia. Harden made the decision to allow the 76ers the flexibility they need to sign other players this summer, said the person who spoke to The Associated Press on condition of anonymity because neither side confirmed those plans publicly. (AP Photo/Matt Slocum, File)

According to The Athletic’s Shams Charania, James Harden and the Philadelphia 76ers have agreed on a two-year deal that will keep the future Hall of Fame player in Philadelphia for at least next season.

It’s seemingly not often that the Sixers catch breaks, whether it be in avoiding injury (Noel, Embiid, Simmons, Fultz), the draft (Noel, MCW, Okafor, Simmons, Fultz), or free agency (Missing out on LeBron, losing Jimmy Butler, signing Al Horford) but at least that final trend seems to finally be changing. After successfully landing quality free agents P.J. Tucker and Danuel House, James Harden has agreed to a $15 million deal to return to the Philadelphia 76ers on a potential two-year deal that has also allowed the Sixers to make those previously discussed additions.

There are a few layers to how this benefits Philadelphia. First, obviously by taking a $15 million pay cut, the Sixers were left the ability to sign both P.J. Tucker (3 years, $33.2 million) and Danuel House (2 years, $8.4 million). The Sixers signed Tucker with what is known as the Non-Taxpayer Mid-Level Exception, an exception to the salary cap that allows teams to sign free agents up to $10.49 million. It’s not as simple as just using this exception, though, because when a team does utilize it, they become “hard-capped” against the Tax Apron. What does this all mean? Great question.

The Tax Apron is a certain dollar amount above the salary cap that a team cannot exceed if they use one of the following: the Non-Taxpayer Mid-Level Exception, the Bi-Annual Exception, or by acquiring a free agent via sign-and-trade. The Sixers did two of those three by signing Tucker and House. Not only does James Harden’s $15 pay cut keep the Sixers below the $157 million Tax Apron, but it also gives them just over $5 million in breathing room which could prove useful as the season goes on.

Another important factor of Harden’s discounted contract is the number of committed years. The deal is for two years, with the second season being a player option meaning that James Harden has the choice to either come back to Philadelphia at the agreed-upon price or he could become a free agent once again.

The latter may be the more likely for two reasons. First, it would give the Sixers more flexibility when it comes to signing free agents. Second, it would allow Harden the opportunity to either secure $30 million-plus or, in his hopeful case, show that he’s deserving of much more. Either way, the fact that this deal is at most two years and there is a pathway to financial flexibility next season should be viewed as great news for the Sixers.

James Harden has officially put his money where his beard is and has shown a commitment to winning with the Philadelphia 76ers.