The Cleveland Cavaliers and James Harden have come to terms on a new 3 year extension to return to the team in 2026-27 the club announced on Thursday. The pact, which will be worth $97M, will reportedly feature a 2028-29 player option as well as a trade kicker built into it.
It’s the second major move of the day for the Cavaliers who earlier this morning traded for Peyton Watson in a multi-team deal. The soon to be 37 year old will now earn an AAV of $32.3M per season, and will become the 4th player in NBA history to eclipse the $500M mark in career earnings.
Two months prior, Harden opted out of his $42.3M player option for 2026-27, becoming a free agent. However, he and his agents had told the Cavaliers in advance that their preference was to return to the team on a 2 to 3 year deal after the team addressed other areas of the roster.
Harden was acquired on February 4th from the Los Angeles Clippers in exchange for Darius Garland and a second round pick. Across 26 games with Cleveland, he averaged 20.5pts / 7.7ast / 4.8reb per game, while shooting 43.5% from beyond the arc.
His addition to the lineup helped propel the Cavaliers to their first Eastern Conference finals berth since 2018, as he and Donovan Mitchell formed a dynamic backcourt tandem. Across 18 playoff games, Harden averaged 19.2pts / 5.5ast / 5.1reb per contest before Cleveland was ultimately bounced by the New York Knicks.
With the 11x NBA All-Star now under contract, the Cavs figure to deploy a starting lineup featuring Harden, Mitchell, Watson, Evan Mobley, and Jarrett Allen. By taking a lower AAV three year deal as opposed to a higher paying 2 year contract, Harden also helps Cleveland with their luxury tax implications, giving the team further roster flexibility as they head into the 2026-27 NBA campaign.
According to Spotrac, the Cavaliers had roughly $22.9M in first apron space before signing Harden, so there may be some fine print on the deal which has not yet been made public which could help Cleveland under that threshold.
Photo: Erik Drost. This file is licensed under the Creative Commons Attribution 2.0 Generic license.