Yes you are correct he could sign such an extension. I read a few more reports (see link below) and see where I had my error. That being said it still doesn't really change the negotiation parameters that are happening right now.
A few people reported in the past weeks that they were surprised he did not opt in as he was no longer eligible to sign a 4 year extension beyond that if he opted in. They then mentioned the 1+1 option to get the 5 year supermax extension next summer. My reading of this was by opting out he was no longer available for a long extension (that was my error).
Kawhi Leonard has a path to a $246 million contract, but this crucial offseason will decide if he ever gets there (From July 1)
"If Leonard opts out of his contract this summer and decides he wants to stay with the Clippers long-term, he could sign a four-year, $175 million contract, according to The Athletic's John Hollinger. Such a deal would be the eighth largest in the NBA in terms of total cash.
According to ESPN's Bobby Marks, Leonard could sign a four-year extension with the Clippers if he opts into his deal for 2021-22. That extension would be worth $181.5 million. When combined with his $36 million option for next season, it would be like signing a five-year, $217 million deal."
This however still makes for potentially tense negotiations with the exact same issues as my initial post above (can they reach a wink/wink 1+1, or can Kawhi sit out all year)
If Kawhi was looking for security given his injury situation he would have just opted in and taken the extension which gives him 5 years of max money. Now all he can get is 4 years of max money. So I am fairly certain he has no interest in that 4 year contract entering this negotiation.
He is probably looking for the 1+1, with a "wink/wink" for the 5 year supermax extension next summer, where the average will be a fair amount higher.
And this is where his injury situation and trust issues with management (everywhere) come into play.
- Can he trust Ballmer will give him the supermax if he suffers another serious injury or does not recover greatly from this one. Nothing can be formally put on paper regarding a future extension. That is a violation of the CBA.
- This is where sitting out the entire season could come into play as a leverage ploy for Kawhi to protect his worth.
In the end I could see Kawhi folding and taking a 4 year extension since building trust is not one of his strengths and he is in his preferred location. The 4 year extension would be a win for the Clippers. Locking in for 4 years is better than 5 years, and Kawhi would have an incentive to come back as soon as reasonably possible to compete for 2022 postseason. It would also be a negotiation loss by Kawhi -- so who knows how that would make him feel.
However, if the deal signed is a 1+1, drama this upcoming year is not out of the question. Will he come back from injury this season? Maybe, maybe not.