How the Sixers took advantage of contract incentives with Caleb Martin

Among all of the contracts that the Sixers handed out this offseason, Caleb Martin’s might be the most creative.

Martin signed a four-year deal with $35 million guaranteed and another $5.25 million in unlikely-to-be-earned incentives. According to ESPN’s Bobby Marks, he’ll earn an extra $1.2 million “if he plays in at least 67 games and Philadelphia wins 49 games and then reaches the second round of the playoffs.”

All three of those should be achievable. Martin played only 64 games last year, but he played 71 in 2022-23. Meanwhile, the Sixers won 47 games last year despite Joel Embiid missing half the season, and they’ve made it to the second round of the playoffs five times in the past seven years.

In essence, the Sixers took advantage of how the NBA’s collective bargaining agreement treats incentives to give Martin an extra $1.2 million which he could easily earn this year.

Base salary and likely-to-be-earned incentives—ones accomplished the year prior—do count against the salary cap right away. Unlikely-to-be-earned incentives only count against the aprons, not the cap in most circumstances. That’s what gave the Sixers enough remaining cap space to land Martin after they signed Paul George and Andre Drummond.

Once they signed that trio, the Sixers inked Tyrese Maxey to his max extension, signed Kelly Oubre Jr. with the room mid-level exception and handed out minimum contracts to Eric Gordon and Kyle Lowry. They also spent the second-round exception to sign No. 41 overall pick Adem Bona to a four-year deal, and they gave KJ Martin a two-year, $16 million balloon deal after taking advantage of his cheap $2.1 million cap hold.

With 12 players under contract, the Sixers are now slightly over the $178.1 million first apron. That means they can’t take back more salary in a midseason trade than they send out unless they finish under the first apron after the deal. However, they’re more than $10 million under the second apron, so that shouldn’t be a concern of theirs this season even after they fill out the rest of their roster with minimum contracts.

Each piece of the Sixers’ offseason puzzle was interconnected. Being able to squeeze Martin in with the leftover cap space they had after signing George and Drummond gave them a quality fifth starter at a shockingly affordable price.

According to multiple reports, the Miami Heat offered Martin a five-year, $65 million deal before free agency began. To accept, he had to pick up his $7.1 million player option. He declined, hoping for a larger salary on a long-term deal, but the gamble backfired when the floor fell out from under the NBA’s middle class thanks to the new CBA.

He acknowledged the minor bag fumble while meeting with reporters upon his signing.

“I mean, you’re always going to wish you can make as much money as you can,” Martin said. “It’s part of the game, it’s part of life. You live and learn. You take risks. Sometimes it works, sometimes it doesn’t.”

Martin should prove to be a steal throughout the life of his contract, as he’s never set to earn more than $10.8 million even if he hits all of his incentives. The non-taxpayer mid-level exception in that season (2027-28) is currently projected to be $17.1 million. He’s taking up 5.8 percent of the Sixers’ total cap space this season, and that percentage is only projected to decrease each ensuing year.

Martin doesn’t have star upside by any means, but he should be a solid glue guy alongside Maxey, George and Joel Embiid. Getting him on a three-year deal that was cheaper than P.J. Tucker’s contract two years ago could prove to be an absolute heist. And the Sixers wisely used unlikely-to-be-earned incentives (that are actually relatively likely to happen) to help Martin save face and recoup some of the money he turned down from Miami.

If Martin does achieve any of his incentives this coming season, they’ll become likely-to-be-earned in 2025-26, so they will count against his cap hit. That also doesn’t matter for the Sixers, who project to be well over the salary cap as long as they have all three of Maxey, George and Embiid under contract.

This offseason was when the Sixers had to get creative to maximize their use of cap space and round out their rotation with championship-caliber depth. They appear to have accomplished both goals, with Martin’s contract being a key cog in each.