Memphis Grizzlies: 2025 Offseason Priorities and Salary Cap Dynamics
I preview the Grizzlies offseason with a deep dive on Jaren Jackson Jr.'s contract situation and renegotiation and extension options. I also look at Santi Aldama's market.
The Memphis Grizzlies have done a great job fielding a competitive team under growing challenges over the past few seasons. They’ve built a deep bench with players on team-friendly contracts to support the growing costs of their top players. They now face another challenge in keeping one of their All-Stars, but thankfully, they’ve already completed most of the legwork.
Damichael Cole joined the podcast a couple of weeks ago to discuss the Grizzlies and their upcoming offseason. We discussed wing options they could pursue and touched on Jaren Jackson Jr.’s contract situation. It’s a good companion piece for this preview, which will focus on salary cap dynamics and take a closer look at Jackson Jr.’s renegotiation possibilities.
The Grizzlies are entering the offseason with 11 players under contract and $52 million below the $187.9 million luxury tax line. They are not expected to exceed that amount in the upcoming season. Their payroll is half comprised of players earning $6 million or more, and the other half making minimum salaries.
They are in a position to have cap space this offseason after trading Marcus Smart and their 2025 first-round pick to the Wizards at the trade deadline. They would need to renounce the rights to most of their free agents to access cap space. They currently can generate a maximum of $17.5 million.
However, they won’t get to that amount since it would also mean renouncing Santi Aldama’s Bird rights. He has a $11.9 million restricted cap hold that they’ll keep. That amount would count toward their cap space, lowering it to $6.9 million. So they could spend that amount, then go over the cap to re-sign Aldama up to any amount.
His free agency situation shouldn’t be too complex. Most teams can offer him the $14.1 million non-taxpayer mid-level exception (NT-MLE), which can run for a total of four years, $60.6 million. The only team with cap space who could offer more are the Brooklyn Nets. The only other way he could get more elsewhere is through a sign and trade, but the Grizzlies would have to agree to that.
Aldama’s true value is probably somewhere north of the mid-level when comparing him to forwards like P.J. Washington, Grant Williams, and Obi Toppin. All those players earn roughly 9 percent of the cap, but Aldama could point to Rui Hachimura’s deal and command closer to 12 percent. That could put the total value of his contract in the four-year, $80 million range, or five years, $105 million.
The restricted free agency process and lack of cap space could limit Aldama’s overall earnings this offseason. As explained in the Sixers mock offseason video, Quentin Grimes could be looking at a contract with the Sixers slightly above the mid-level exception, perhaps five years, $90 million, if there’s no market for him above it. This could apply to Aldama as well.
$6.9 million isn’t a viable amount of cap space to pursue free agents, but that’s not what it’ll be used for. This leads to the most important aspect of the Grizzlies’ offseason: Jaren Jackson Jr.’s extension eligibility.
The Grizzlies created the cap flexibility as a hedge in case Jackson Jr. didn’t make an All-NBA team. Yesterday, it was announced that he didn’t make one, meaning he did not qualify for the supermax. He could still qualify for it if he makes All-NBA next season, but he’d need to make it to 2026 free agency first, which adds an element of risk.
Jackson Jr. would’ve been eligible to extend with the Grizzlies this coming offseason up to a maximum of five years, $345 million if he made an All-NBA team. As discussed on the podcast, the 35 percent max is usually reserved for the top 10-15 players with an elite offensive skill. Jackson Jr. is arguably the best offensive player of the other 9 who made All-Defense, but he’s not a great number one offensive option on a contending team.
The Grizzlies could’ve given him somewhere between 30 percent and 35 percent maximum. Rudy Gobert, the other former Defensive Player of the Year to qualify for the supermax, got roughly 31 percent of the cap on his extension with the Jazz.
That could’ve been where the Grizzlies draw the line in negotiations. It’s slightly more than the 30 percent max other teams can offer in 2026 free agency, with an additional year
The reason Jackson Jr. will require a renegotiation and extension now is that his current maximum extension, four years, $146.8 million, is well below his market value. He’s limited to that amount because the Grizzlies extended him to a four-year, $100 million extension that declines each year. It gave them significant tax flexibility over the past few seasons, but made him unextendable since his final $23.4 million salary is too low to extend off of.
Here is a projection of Jackson Jr.’s next six seasons if he qualified for the supermax and received 31 percent of the salary cap:
2025-26: $23,413,395 (15.1 percent of the cap)
2026-27: $52,734,720 (31 percent)
2027-28: $56,953,498 (30.4 percent)
2028-29: $61,172,276 (29.7 percent)
2029-30: $65,391,054 (28.9 percent)
2030-31: $69,609,832 (27.9 percent)
A maximum extension worth 31 percent of the cap could’ve run for up to five years, $305.9 million. This would guarantee him $329.3 million over the next six seasons.
Why is this important, even though he can’t do this anymore? Because he could make up the first four years of those projected earnings through a renegotiation and extension this summer.
Players can renegotiate their contracts after the third anniversary of a contract spanning at least four seasons. Teams can use cap space to increase the player’s current salary, then add up to a 140 percent raise on the next season, like any other extension. Raises between subsequent seasons can rise by up to 8 percent of the starting salary of the extension.
That Smart trade was panned because of the assets lost to acquire and trade him, but it turned out to be a prudent insurance policy with Jackson Jr.’s All-NBA candidacy on the fringes. So now they could use cap space to renegotiate his $23.4 million salary to a higher amount, then extend his contract to an annual salary range closer to the 30 percent maximum.
Here is what Jackson Jr.’s renegotiation could top out as based on their current cap projection:
2025-26: $23,413,395 (salary) + $6,907,247 (cap space) = $30,320,642 (19.6 percent)
2026-27: $42,448,899 (25 percent)
2027-28: $45,844,811 (24.5 percent)
2028-29: $49,240,723 (23.9 percent)
2029-30: $52,636,635 (23.3 percent)
This would total five years, $220.5 million over the next five seasons, with $197.1 million in new money. However, that still may not be enough for him since it’s below the 30 percent maximum, and he will likely garner max offers if he makes it to 2026 free agency.
The Grizzlies could get him close enough to the 30 percent maximum by creating more cap space by salary dumping John Konchar’s $6.2 million salary in a trade. That would increase their cap space projection to $11.8 million, which would result in this maximum renegotiation and extension:
2025-26: $23,413,395 (salary) + $11,799,378 (cap space) = $35,212,773 (22.8 percent)
2026-27: $49,297,882 (29 percent)
2027-28: $53,241,713 (28.5 percent)
2028-29: $57,185,544 (27.8 percent)
2029-30: $61,129,375 (27 percent)
$256.1 million in total value and $232.7 million in new money. But here’s where the renegotiation scenario comes through:
Earnings between 2025-26 through 2028-29 with the renegotiation and extension: $194.9 million.
Earnings between 2025-26 through 2028-29 with the supermax worth 31 percent of the cap: $194.2 million.
The first three years of an extension worth 29 percent of the cap are $11 million less than the first three years of a 31 percent maximum contract. But he makes it up with the $11.8 million salary increase in 2025-26. And this framework is more advantageous for the Grizzlies in the long run since he’d be locked in at 29 percent instead of 30 percent in subsequent seasons.
If Jackson Jr. qualified for All-NBA, it’s possible he’d bypass the free money from a renegotiation. 31 percent likely would’ve been the minimum required in a supermax extension for it to make sense for him. But he may prefer the supermax anyway because of the additional year it has to offer. The ball is in Jackson Jr.’s court now that he still has a viable pathway to extend his time with the Grizzlies this summer.
Ja Morant will also be extension-eligible this summer, but can only add up to two years. He’s unlikely to extend since he still has supermax eligibility. He would be eligible to extend in the 2026 offseason for up to four years, $323 million if he makes All-NBA next season.
After they presumably use their cap space to extend Jackson Jr., they’ll project with roughly $30 million in tax space, assuming they also traded Konchar and re-signed Aldama to the NT-MLE range. They’d have enough flexibility to increase the payroll through trade and free agent signings.
However, they wouldn’t have much in terms of tradeable salaries after completing the renegotiation. Most of their roster includes their max-level players and minimum-level players. They wouldn’t be able to sign and trade free agents like Luke Kennard or Marvin Bagley for players under contract, since they’ll have renounced their free agent rights to create cap space.
Brandon Clarke would be their most viable trade chip for salary-matching purposes. They could acquire up to a $21 million player in exchange for him in the 2025-26 league year. They’d also have the $8.8 million room mid-level exception (R-MLE) to sign a free agent, or trade for a player making up to that amount and with a contract that doesn’t exceed three seasons.
Their biggest need remains a veteran at the wing. As good as Jaylen Wells has been, they could use an experienced presence at the 3 for their starting and closing lineups. They have struggled to replace Dillon Brooks these past two years, with the near acquisition of Dorian Finney-Smith last season as the closest they’ve gotten. But the R-MLE is unlikely to be high enough to sign a player of his caliber in free agency.
Their best shot at getting a wing would be to trade Clarke for one and attaching draft equity. They’ll have all their first-round picks between 2026 and 2032 and could trade up to four this upcoming season.
They could add another big man in free agency with the R-MLE after. Veterans like Clint Capela, Precious Achiuwa, and Chris Boucher could fit the criteria. But generally speaking, look out for the Grizzlies to continue to find depth pieces through the draft and undrafted free agency. They have two second-round picks in the 2025 draft.
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