What Alex Caruso’s Extension Means For OKC Thunder’s Long-Term Plans

Oklahoma City Thunder guard Alex Caruso became extension-eligible this past Saturday. One day later, he signed a four-year, $81.1 million extension—the most he was eligible to receive based on his current salary.

A $20-plus million average annual value might seem steep for a 30-year-old guard who’s averaging only 5.5 points per game while playing fewer than 20 minutes per night. However, Caruso is a luxury that the Thunder can afford (for now) because of their unique salary structure and the expected salary-cap environment over the next few seasons.

Star guard Shai Gilgeous-Alexander has already qualified for a supermax extension, but he’s under contract through 2026-27. He won’t begin earning 35% of the salary cap until 2027-28. Meanwhile, both Chet Holmgren and Jalen Williams have two years left on their rookie-scale contracts. They can’t become restricted free agents until 2026-27, although the Thunder figure to sign both to extensions this coming offseason.

In other words: The Thunder are eventually poised to field an expensive roster and will face the difficult choices that teams such as the Minnesota Timberwolves have already begun to confront. However, they’re still at least two years away from that dilemma, which puts them firmly in a wide-open championship window for now.

How Caruso Fits Into OKC’s Plans

Ahead of the 2023-24 season, Thunder general manager Sam Presti told reporters he was in no hurry to make an all-in trade to accelerate the team’s rebuild.

“We’re not a .500 team,” he said at the time. “We have to finish our breakfast before we start acting like we’re on the cusp of something.”

The Thunder proceeded to finish with the best record in the Western Conference at 57-25. They swept the Zion Williamson-less New Orleans Pelicans in the first round of the playoffs, but Luka Doncic and the Dallas Mavericks dispatched them in the conference semifinals.

During that series, it became increasingly clear that Josh Giddey, whom the Thunder selected with the No. 6 overall pick in the 2021 draft, would be the odd man out in their young core. The Australian is a Swiss army knife as a secondary ball-handler, but his lack of three-point shooting made him an off-ball liability. Dallas gladly sagged off him along the perimeter to devote more defensive attention elsewhere, and he couldn’t make them pay.

In that respect, Presti’s preseason caution proved prophetic.

“When people say ‘go all-in,’ I don’t think they’re saying ‘go all-in to have one season that’s slightly better than your last season,'” he said. “I think when the team’s performing at an extremely high level, you then know, ‘Wait, something could help us.’ And you have better information.'”

The 2023-24 season gave the Thunder that type of information. After missing his first NBA season because of a foot injury, Holmgren averaged 16.5 points, 7.9 rebounds and 2.3 blocks per game during his debut campaign. Williams, who finished second in the Rookie of the Year race in 2022-23, also took a leap that hinted at future All-Star upside.

Once the Thunder saw SGA, Holmgren and Williams cement themselves as their future Big Three, they could refine their team-building tactics. They didn’t need to continue gambling on upside in search of future stars. They needed to add more complementary players to their supporting cast.

Five days before the 2024 NBA draft, they made that exact type of move. They shipped Giddey to the Chicago Bulls in a straight one-for-one swap for Caruso, who has fit like a glove in OKC.

The Thunder have the NBA’s best defensive rating this season at 102.9 points allowed per 100 possessions. With Caruso on the floor, they’re allowing only 94.9 points per 100 possessions.

Caruso has long been one of the league’s best point-of-attack defenders. That hasn’t changed in OKC. Players whom he defends are shooting only 33.0% against him—13.1 percentage points below their average. He’s tied for fifth leaguewide in steals per game and deflections per game. (He’s tied with both Williams and fellow teammate Cason Wallace in the latter.)

Caruso isn’t the only reason why the Thunder boast such a hellacious defense this year, but he’s been a major contributor to it. That’s why he’s a luxury that OKC can afford for the time being, particularly as other title hopefuls begin to feel the wrath of the NBA’s new collective bargaining agreement.

Projecting The Thunder Moving Forward

At some point, the Thunder will begin to feel that pinch as well. It just won’t happen until 2026-27 at the earliest, when Williams and Holmgren’s new extensions kick in.

After extending Caruso, the Thunder now have every single one of their rotation players under guaranteed contract in 2025-26. That means they have a two-year window with this core. They’re already thinking longer-term as well, though.

The Thunder built in some contractual escape hatches with Williams and Holmgren’s looming extensions in mind. Notably, they have team options on Isaiah Hartenstein ($28.5 million) and Lu Dort ($17.7 million) in the 2026-27 season, either of which they could decline to give themselves more financial wiggle room if needed.

Luckily, the Thunder don’t have to make that decision right now. In fact, Presti is likely taking the same approach with them that he did ahead of the 2023-24 season. Even though the Thunder once again have the best record in the West at 23-5 headed into Christmas Day, they’re still in information-gathering mode.

Holmgren, who has been sidelined with a hip injury since mid-November, has already missed too many games to make an All-NBA team this year. If Williams does get named to an All-NBA team, though, he’ll be eligible to sign a five-year max extension this offseason worth 30% of the 2026-27 salary cap rather than 25%.

The Thunder might prefer clarity on the financial futures of SGA, Williams and Holmgren before charting the path forward with the rest of their roster. Will SGA sign a four-year supermax extension this coming offseason worth a projected $293.4 million, or will he wait until the 2025-26 offseason, when he’d be eligible for a five-year, $379.9 million deal? Will Williams and/or Holmgren sign 25% max extensions this offseason, or will they test their All-NBA luck to see if they qualify for a 30% max instead?

Once the Thunder have those deals locked in, they’ll have a better idea of how they’re pacing against future salary caps, luxury-tax thresholds and aprons. They could decline their team options on Hartenstein and/or Dort if needed for financial relief, or they could look to flip them as salary-matching chips in trades. The Thunder also still have to figure out if/how recent lottery picks such as Wallace, Ousmane Dieng and Nikola Topic fit into their long-term plans.

Those are all problems for a later day. For now, the Thunder have a clear path to title contention for the next two seasons and zero short-term financial concerns after flipping Giddey for Caruso and inking Caruso to his new extension.

Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM. All odds via FanDuel Sportsbook.