Jrue Holiday ‘Losing’ $7 Million On His New 4-Year Contract Leads To Celtics Saving Over $35 Million In Luxury Tax Bill

Who knew that ‘losing’ $7 million would work wonders for not just Jrue Holiday but the Boston Celtics franchise as well? For those unaware, Celtics guard Jrue Holiday recently declined the player option on his previous deal to sign a new four-year/$135 million contract with Boston. This move got Holiday him a better contract and more guaranteed money while also helping the Celtics save over $35 million in luxury tax.

Jrue Holiday arrived in Boston during the third year of his four-year/$134 million contract that he had signed with the Milwaukee Bucks back in 2022. As per ESPN’s Bobby Marks, Holiday was guaranteed $37.3 million in the 2024-25 NBA season had he not declined his player option.

 

Not including bonuses, Holiday had a base salary of $37.3M in 2024-25.

The first year of the extension will reduce his salary to $30M, saving Boston over $35M in luxury tax penalties. https://t.co/evfBYAWgQh

— Bobby Marks (@BobbyMarks42) April 10, 2024

Now that Holiday has pulled the trigger and signed a new deal with the Celtics, his salary for the 2024-25 NBA season will see a steady decrease from $37.3 million to roughly $30 million per season. And from Holiday’s perspective, he did no wrong in signing this extension.

Currently playing his 15th season in the league, Jrue Holiday is certainly not getting any younger. So, his decision to sign a new extension does make sense, given that it will last until the 2027-28 NBA season. Moreover, this new deal with the Celtics is very close to a fully guaranteed deal, per Sportrac, and would end up securing his future better, compared to going for the player option on his previous contract.

Proven to be a defense-first point guard with the ability to also score, Holiday has turned out to be a perfect fit for the Boston Celtics, who became the first team in the league to clinch a playoff spot this season. However, the player will also be turning 34 this year. With this in mind, opting for a player option and then hitting free agency at 35 years of age would certainly not have worked well for the aging star. Instead, the two-time All-Star made the smart move of going for a more secure contract while sticking with a team that likely has the best chance to add another ring to his collection before it’s all said and done.

Did the Celtics overpay Jrue Holiday?

Jrue Holiday made the right move declining his player option and signing a new extension with the Celtics. But how did this new deal benefit Boston by saving over $35 million in luxury tax this year?

As per Spotrac, the Boston Celtics have the fourth-highest luxury tax bill for the 2023-24 NBA season, rounding up to nearly $39.7 million this year. The luxury tax for the Celtics would’ve more or less been the same the next year as well. But with Jrue Holiday’s new contract, his salary for the 2024-25 NBA season goes down from $37.3 million to about $30 million next season, which would help the Celtics save over $35 million in luxury tax penalties.

At first glance, it may seem that the Boston Celtics may have overpaid Holiday a bit. But the 6’4 guard has been an integral piece of the puzzle for the Celtics who are boasting a 62-17 record in the league so far.

Not only does Jrue Holiday’s new contract save money for the Celtics but it also helps the team keep this talented yet expensive core intact for the next couple of years. Moreover, the price of Jrue Holiday’s services would end up being worth every penny if Boston goes on to win a championship in the next two to four years.

Now, all there’s left to see is how far Boston ends up going in the postseason this year. Do you think they have what it takes to win it all this year?