It Worked for Alex Caruso and Lakers, But 2-Way NBA Contracts Get Mixed Results

Eric Pincus@@EricPincusLA Lakers Lead WriterDecember 24, 2019

Los Angeles Lakers' Alex Caruso (4) reacts after making a 3-point basket against the Dallas Mavericks during the second half of an NBA basketball game Sunday, Dec. 1, 2019, in Los Angeles. (AP Photo/Marcio Jose Sanchez)
Marcio Jose Sanchez/Associated Press

LOS ANGELES — The Los Angeles Lakers sacrificed a significant part of their future when they acquired Anthony Davis from the New Orleans Pelicans, as they gave up Brandon Ingram, Lonzo Ball, Josh Hart and multiple first-round picks.

Undrafted guard-turned-breakout star Alex Caruso may provide a template for how they can restock their talent pool. 

The Lakers developed Caruso from relative obscurity into a vital rotation contributor. Caruso is second on the team for regular rotation players with a net rating of 12.3 points per 100 possessions, behind just LeBron James. 

None of this was guaranteed for Caruso. He spent most of his first two Lakers seasons with the South Bay Lakers on a two-way contract, which limited him to approximately 69 days per year with the parent club (45 days during the G League regular season plus two weeks in total before it begins and after it ends). 

"It's been the best-case scenario,” Caruso said. “It was exactly what I needed. It was an opportunity for me to do exactly what they laid it out for it: get experience with the NBA but also have the G League to help me continue on the path of developing."

He's now on a standard two-year, $5.5 million contract with the Lakers. That's quite a jump from a two-way deal. 

'I Don't Love Those Contracts'

This season, two-way players will earn roughly $560 per day while playing in the G League and $5,075 each day they’re on assignment in the NBA. That works out to be a pay range of $79,568 to $411,000, depending on how many NBA days they get. 

Caruso represents the ideal for the two-way, a standout as one of roughly 194 players who have been given a shot over the past two-and-a-half years. That’s around 226 total two-way contracts (some players have received multiple two-way contracts). Most of those players—85.1 percent—are still vying for a true NBA contract.

That upside earning potential has dramatically changed the G League.

"It's added a lot of depth. The talent and skill level are at a different point than when I first came into the league as a player and as a coach," South Bay Lakers head coach Coby Karl said. "Over the last three years, it's a completely different experience. ... The young, talented guys were going overseas because there wasn't enough money in the G League."

Two-ways also opened up an additional 60 roster spots around the NBA. The pay is less than half of what an NBA rookie will earn on a minimum contract ($898,310), but the chance to be groomed directly by an organization has proved to be fruitful. 

But the benefits compared to the downsides are debatable.

"I don't love those contracts. They don't really do anything for me," a player agent said. "They're not very agent-friendly, but they're a necessary vehicle. ... [My clients] are getting in the door with an organization. They're able to see the floor, to be a priority guy in the G League program while developing."

In addition to two-ways, the G League raised player salaries to $35,000. The NBA also allows aspiring players to sign Exhibit 10s (nonguaranteed one-year deals worth the minimum salary) in their training camp contracts, providing a bonus of up to $50,000 if they’re cut before the season so long as they commit to playing in the G League as an affiliate player for at least 60 days.

'I Could See a Change Coming'

The NBA has set up a very fluid system for teams with two-ways and Exhibit 10s. Before the season begins, franchises can convert players on Exhibit 10s to two-ways, or two-ways into Exhibit 10s. 

The Charlotte Hornets decided to invest in both Jalen McDaniels and Caleb Martin, but both were initially on Exhibit 10s. The team converted the pair to two-ways, and then immediately voided out the two-ways to sign both to three-year deals.

"That's probably not the NBA's intent, but it's how the rules are currently structured," one league source said. "I could see a change coming in the next collective bargaining agreement to clean that up. The idea of what teams are doing is fine, but the steps they need to go through to get there are a little wonky."

In the meantime, with so much flexibility baked into Exhibit 10s and two-ways, we're seeing well over 100 Exhibit 10s signed before and throughout training camps.

"Some teams are doing open competition for two-ways via Exhibit 10s," the agent said.

For players cut on an Exhibit 10, the extra $50,000 goes a long way. It has helped make the G League more of a palatable option (at $85,000 total).

"For kids who come from poorer backgrounds, they can't afford to make [the old G League salary of] $18,000 in six months when they just got offered $75,000 in Croatia," Karl said. "It didn't make sense [for players]. 'Man, I want to play in the NBA, but I don't know how long I can play for. I need to make some money while I can.'"

'I Wouldn't Have Had the Opportunity if the 2-Way Wasn't Available'

Now that it’s become more financially viable, the G League has become a more valuable resource for NBA teams.

The Miami Heat developed Duncan Robinson with the Sioux Falls Skyforce. In 33 games last season in the G League, Robinson averaged 21.4 points while shooting 48.3 percent from three-point range. Now on a standard contract (at a minimum salary through 2020-21), Robinson is a valued shooter, earning 26.7 minutes a game while scoring 12.0 points on 45.0 percent shooting from deep.

Miami Heat forward Duncan Robinson is now on a standard contract, after working his way up from a 2-way contract.
Miami Heat forward Duncan Robinson is now on a standard contract, after working his way up from a 2-way contract.Matt Slocum/Associated Press

The Houston Rockets also found a shooter in Danuel House Jr., who is averaging 10.7 points while shooting 39.0 percent from three in 30.1 minutes per game. House signed a (relatively) lucrative three-year, $11.2 million deal this offseason after splitting time with the Rio Grande Valley Vipers last year.

Other former two-ways turned NBA rotation players include Monte Morris (Denver Nuggets), Chris Boucher (Toronto Raptors), Ryan Arcidiacono (Chicago Bulls), Georges Niang (Utah Jazz), Jordan McRae (Washington Wizards) and Caruso's teammate in Los Angeles, Quinn Cook, among others.

Cook was a key reserve with the champion Golden State Warriors in 2017-18, filling in for an injured Stephen Curry. Since two-way players are not eligible for the postseason, the Warriors signed him to a standard contract prior to the playoffs. After the 2018-19 season, Cook joined the Lakers on a two-year, $6 million contract (only $1 million is guaranteed for 2020-21).

"My role was the third point guard [with the Warriors]," Cook said. "It was an older team, so guys would sit out and I [knew I] would get my 45 days. I didn't know that Steph would get hurt for an extended period of time, but I was ready for the opportunity. I had some big games, and I converted into a contract that year because they needed me for the playoffs. ... I don't think I would have had the opportunity if the two-way wasn't available."

Jan. 15 marks the last day teams can sign a player to a two-way contract. Over the past two seasons, teams have typically spent the first few months of the season evaluating their two-way players, cutting those who weren't living up to expectations. Earlier this month, the Lakers cut Zach Norvell Jr. (who underperformed with the South Bay Lakers) and signed fellow summer-league standout Devontae Cacok in his place.

Cacok had originally signed an Exhibit 10 with the Lakers, but he was cut before the start of the regular season. He joined South Bay as an affiliate player and averaged 16.3 points on 66.9 percent shooting and 11.6 rebounds in only 22.8 minutes per game.

Expect a flurry of similar transactions around the league as Jan. 15 nears.

The Lakers have Kostas Antetokounmpo, right, on a two-way contract. He happens to be the brother of Giannis Antetokounmpo, who might be in the Lakers' sights when Giannis becomes a free agent.
The Lakers have Kostas Antetokounmpo, right, on a two-way contract. He happens to be the brother of Giannis Antetokounmpo, who might be in the Lakers' sights when Giannis becomes a free agent.Joe Murphy/Getty Images

In addition to Cacok, the Lakers also have Kostas Antetokounmpo on a two-way contract. He happens to be the brother of the current NBA Most Valuable Player, Giannis Antetokounmpo of the Milwaukee Bucks. While they'll look to develop him like any other player, his older brother also happens to be poised to become a free agent in the summer of 2021. 

Los Angeles claimed Kostas off waivers over the summer when the Dallas Mavericks chose to go in a different direction. In this case, the two-way may be more than just a two-way.

That the franchise can build a relationship with the Antetokounmpo family is no small thing, just like how their signing of Kentavious Caldwell-Pope in 2017 opened the door to Klutch Sports with agent Rich Paul, who also represents LeBron James and Anthony Davis.

Beyond the big-picture politics, Karl is charged with developing the young Lakers. 

"We've got undrafted and second-round guys," Karl said. "We want to help them become first-round draft picks in two, three or four years, where their value exceeds their position on this roster."

In most cases, if a two-way player is successful, the question won’t be “how big of a contract will I get?” Instead, it will be “how much guaranteed money can I get in a minimum contract?”

Caruso is an outlier, earning roughly the same salary as teammate Kyle Kuzma over the next two seasons. Kuzma, the 27th overall pick in 2017, is a more talented scorer than Caruso. But Caruso may be more valuable to this year's Lakers as a high-level perimeter defender and secondary ball-handler.

That speaks to Karl's goal of developing unheralded players into first-round-caliber talent.

"Basketball for me is such a joy. I have so much fun competing with my teammates," Caruso said. "I love being in L.A. and I want to be a Laker for as long as I can, but at the time when I was in the G League with no two-way, no nothing— whatever team wanted me, whatever role, I [was] ready to go. I lucked out getting this opportunity with this organization, in this city."

And the Lakers have lucked out as well. Caruso has been a consistent contributor throughout the team’s hot start to the season. 

In landing Davis with James, along with a long list of veteran players, the Lakers have quickly gotten far older. Since they won’t be able to restock their young talent in volume through conventional means, Caruso represents another path, one they will need to try to repeat in the coming years as the New Orleans Pelicans make use of their draft picks.

By the Numbers

In the debut season (2017-18) for two-way contracts, 86 were signed or converted from Exhibit 10s:

  • 83 players (three signed multiple times)

  • 60 one-year deals (69.8 percent)

  • 26 two-year deals (30.2 percent)

  • 24 of the 83 are currently in the NBA (28.9 percent)

  • Eight currently on above-minimum contracts (9.6 percent): Ryan Arcidiacono, Quinn Cook, Torrey Craig, Alex Caruso, Danuel House Jr., Luke Kornet, Monte Morris, Edmond Sumner

  • Nine currently on minimum contracts (10.8 percent): Malcolm Miller, Chris Boucher, Derrick Walton Jr., Amile Jefferson, Derrick Jones Jr., Georges Niang, Gary Payton II, JaKarr Sampson, Tyrone Wallace

  • Seven still on two-ways (8.4 percent): Kadeem Allen, Antonius Cleveland, PJ Dozier, Johnathan Motley, Josh Magette, Naz Mitrou-Long, Kobi Simmons

  • Two second-round picks entered the NBA as two-way players (2.4 percent)

Over the 2018-19 season, 74 were signed or converted from Exhibit 10s:

  • 72 players (two signed multiple times)

  • 60 one-year deals (81.1 percent)

  • 14 two-year deals (18.9 percent)

  • 22 of the 72 are currently in the NBA (30.6 percent)

  • Two currently on above-minimum contracts (2.8 percent): Danuel House Jr., Allonzo Trier

  • 11 currently on minimum contracts (15.3 percent): Chris Boucher, Deonte Burton, Gary Clark, Wenyen Gabriel, Amile Jefferson, Alfonzo McKinnie, Jordan McRae, Shake Milton, Gary Payton II, Theo Pinson, Duncan Robinson

  • Nine still on two-ways (12.5 percent): Kadeem Allen, Kostas Antetokounmpo, PJ Dozier, Drew Eubanks, Brandon Goodwin, Damion Lee, Naz Mitrou-Long, Daryl Macon, Yuta Watanabe

  • Four second-round picks entered the NBA as two-way players (5.6 percent)

Still early through the 2019-20 season, 68 were signed or converted from Exhibit 10s:

  • 65 players (three signed multiple times)

  • 61 one-year deals (89.7 percent)

  • Seven two-year deals (10.3 percent)

  • 58 are currently in the NBA (89.2 percent)

  • None currently on above-minimum contracts

  • Four currently on minimum contracts (6.3 percent): Amile Jefferson, Caleb Martin, Jalen McDaniels, Naz Reid

  • 54 still on two-ways (83.1 percent)

  • 10 second-round picks entered the NBA as two-way players (15.4 percent)

Josh and Benny Safdie, the brother writing and directing team behind Uncut Gems, join The Full 48 with Howard Beck to discuss Amar’e Stoudemire, Kobe Bryant, Kevin Garnett, the New York Knicks and Linsanity.