"What can I do for my family with $127 million that I can't do with $111 million?" he told The Washington Post.
The unpredictable three-time All-Star point guard, in vintage Agent Zero fashion, told the Post and the Washington Times on Thursday that he has agreed to re-sign for $111 million over six years, considerably less than the maximum deal he said the Wizards offered him when the free agency period began on Tuesday.
Arenas negotiated the deal from China, where is traveling as part of promotional tour for a shoe company, and did so without an agent.
"I'm basically giving back $16 million," Arenas told the Washington Times. "This is in line with what I've been saying the whole time. You see players take max deals and they financially bind their teams. I don't wanna be one of those players and three years down the road your team is strapped and can't do anything about it."
Arenas became a free agent after opting out of the final year of his six-year, $65 million contract at the end of last season. He initially said he was opting out to receive a max contract, but he later indicated he would be flexible in negotiations.
Arenas also said that he would not re-sign unless the team retained two-time All-Star forward Antawn Jamison. The Wizards lived up to that part of the bargain Monday by giving Jamison a four-year, $50 million deal.
Arenas has proven to be one of the most dynamic players in the NBA when healthy, but a major knee and an overzealous rehabilitation sidelined him for most of the last season. He had a first surgery on the knee in April 2007, tried to come back too soon and had a second operation in November. He missed 66 games before returning late in the season, but he had to shut himself down again during the first-round playoff series against Cleveland.
Arenas has vowed to be more cautious about his rehab this time, and the state of his knee didn't appear to devalue his worth in talks with the Wizards.
The Wizards cannot comment on talks with Arenas or announce the deal until a league-mandated moratorium expires next week.
Arenas has averaged 22.8 points, 5.5 assists and 4.2 rebounds in his seven-season NBA career. He was known as much for his tantrums as for on-court play when he came to Washington from Golden State in 2003, but he began to display more maturity as he developed into a take-over-the-game player with a knack for hitting buzzer-beating shots. Although he still has his many quirks -- yelling "Hibachi!" after making a big shot is just one of many -- he has helped the Wizards became a playoff regular.
Arenas' deal means the Wizards will have room to sign other players -- including free agent guard Roger Mason -- and still remain under the league's luxury tax.
"It's a relief," Arenas told the Washington Times. "It was a burden at the same time. Your whole city is depending on you, wondering if you're going to make the right decision. I'm a franchise player and sometimes franchise players need to make franchise decisions."