Mullins, Casspi and the downside of a longer minimum contract
For the most part, veterans signing minimum salary contracts sign one-year deals. They do so mostly because it is cheaper for the team to do so.
Due to a long standing policy designed to protect veterans from losing out on roster spots to cheaper young players (the minimum salary increases depending upon your number of years of service), the league reimburses teams some money for any veteran they sign who has more than two years of experience, as long as they sign a one-year minimum salary. For any veteran with more than two years experience who signs a one-year minimum, the team is charged only the amount of a two-year veteran's minimum, with the league reimbursing the rest. They are also only taxed on that amount. Therefore, if a team signs a 10 year veteran ($1,399,507 this season), they are charged only the two-year amount ($884,293 this season), and the latter figure is the one used in tax permutations. The league pays the difference.
That, then, is why veterans normally sign one-year deals. There is a clear difference, and a clear advantage to doing so for the team, between signing a one-year deal over a two-year deal. There can also however a significant difference between two different types of two-year deals.
It may not seem like it. It may just seem like semantics. But there can be a big, big difference between a two-year minimum salary contract, and a one-year minimum salary contract with a player option for a second season. The nature of that option year, and the level of guaranteed compensation involved, can make this difference.
To demonstrate this, take the comparable but different situations of two former coveted first round draft picks. Byron Mullens and Omri Casspi are both now onto their third NBA franchises, and both are signed to their first non-rookie scale NBA contracts. Both of these are two-year minimum salary contracts, and both are guaranteed in the first season. However, while Mullens has a player option on the second season, Casspi has only an unguaranteed contract. And this may prove costly to Casspi.
Both Casspi and Mullens find themselves in the rotations of expected conference title contenders. Both are coming off poor previous seasons, yet are capable of more than they have previously shown. Both now have the opportunity, with the exposure that these minutes on competitive teams offer, to really show something, to prove their redemption, and to significantly increase their value in the future. But only one of them will have the opportunity to capitalise.
For Mullens, if he plays his way into a bigger contract, he can go and get it. The player option season is security for him in case of disaster, such as suffering a significant injury this season, or a large number of DNP-CD's. Should they not happen, and Mullens performs well, the player option is also a means to ensure he hits the market and can capitalise. As the name suggests, the player option gives the power and leverage to the player. The team hardly loses out - if things go well, and Mullens leaves for pastures now, they nonetheless still had a discounted player for a season.
Casspi, however, is faced with the very opposite. If he plays well this year - and so far, he is doing so - then he is shackled to a second season at far below market value. By having the second season at the minimum salary, a fully unguaranteed second season if waived by a certain date, Houston can dictate Casspi's future - indeed, the date being as late as it is (August 5) allows them to potentially do so throughout the entirety of the busiest and most important part of free agency.
For that entire month, and for the two immediately preceding it, Casspi is in limbo, able to be traded or cut at a moment's notice, with no say in his future, waiting to be told what is happening. This is at a time when he could be exploring the market elsewhere and finding himself a more befitting paycheck. Even if waived, he is not free - Casspi would then be subject to the waivers procedure, where again he has no control over his future. And if he is deemed worthy of being waived from an unguaranteed minimum salary contract, it is surely a logical conclusion that he is not likely to get more than that again on the open market. It is likely, then, that Casspi is handicapped to a minimum salary contract next season whilst clearly deserving of more. And not having the option to hit the free agency market means he is stuck with being underpaid for another 19 months.
If the second season was added at Houston's insistence, or in exchange for the first season being fully guaranteed, the second season makes sense. Houston held the leverage in negotiations, and it is certainly in keeping with their nature - Ronnie Brewer finds himself in the same situation, as Reggie Williams would have as well. Former Rocket James Anderson (claimed off waivers by Philly who thus assumed the contract Houston gave him in its entirety) is also now in the same situation - in the midst of a breakout season, he will be able to do nothing about it next summer, as he is tied down to an unguaranteed minimum salary deal. The longer the deal you sign, the better it sounds, but if the length of that deal is mostly at the team's discretion, that length is not a virtue.
If you're going to take as little as possible, do it for as briefly as possible.