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An explanation of Aaron Holiday’s rookie contract

By Tony East

TARRYTOWN, NY - AUGUST 12: (EDITOR'S NOTE:SATURATION WAS REMOVED FROM THIS IMAGE) Aaron Holiday of the Indiana Pacers poses for a portrait during the 2018 NBA Rookie Photo Shoot at MSG Training Center on August 12, 2018 in Tarrytown, New York. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Elsa/Getty Images)
TARRYTOWN, NY - AUGUST 12: (EDITOR'S NOTE:SATURATION WAS REMOVED FROM THIS IMAGE) Aaron Holiday of the Indiana Pacers poses for a portrait during the 2018 NBA Rookie Photo Shoot at MSG Training Center on August 12, 2018 in Tarrytown, New York. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Elsa/Getty Images) /
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Aaron Holiday Indiana Pacers
LAS VEGAS, NV – JULY 6: Aaron Holiday #3 of the Indiana Pacers handles the ball against the Houston Rockets during the 2018 Las Vegas Summer League on July 6, 2018, at the Cox Pavilion in Las Vegas, Nevada. (Photo by David Dow/NBAE via Getty Images) /

Aaron Holiday’s current contract

Aaron Holiday’s contract was determined for him. All first-round picks are subject to the rookie scale, meaning they have very little (if any) flexibility in negotiations.

Rookie scale contracts are needlessly complicated. They are set in value by the collective bargaining agreement for each season. The rookie scale for the 23rd pick in the draft was a four year deal with a starting value of $1,593,300.

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But not so fast.

First-round picks can sign for up to 120 percent of their rookie scale first-year value. That’s basically just a formality though because every (and I mean every) rookie signs for 120 percent of their rookie scale deal. So Aaron holiday’s first-year salary (and his salary for the upcoming season) is actually $1,911,960.

That 120 percent bump applies to every year of Holiday’s current contract. When it is all added up, Holiday’s current deal is a four-year deal with a total value of $10,477,351.

But, again, not so fast!

The final two seasons of the deal have team options, meaning the Pacers could decline those options and let Holiday walk if he isn’t producing. Only the first two seasons of the contract are guaranteed, his guaranteed total is $4,151,160.

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