Hornets Off-Season: Financial Addendum

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Published: June 25, 2008

I've seen some confusion in various places about what selling the 27th pick means for the Hornets financially. For those of you who want to know these things, this is the financials for the Hornets:

The Hornets have $58.8 Million in Salaries currently on the books for Peja, Chandler, West, James, Peterson, Paul, Butler, Armstrong, Wright and Ely. (Ely hasn't indicated if he'll become a free agent yet.)

That number puts us over the cap right now. The Cap is not expected to rise very much, and last year it was $55.6 million.

Since we are over the cap, we can offer:

  • Any number of contracts worth a total of $5.7 million per year to various Free Agents, using the Mid-Level Exception.
  • A contract to Pargo, who holds Early Bird Rights (for playing a continuous two years with the Hornets); a deal worth up to $3.5 million a year (175% of last year's salary), OUTSIDE of the Mid-Level Exception.
  • A contract to Bonzi Wells, who also holds his Early Bird Rights (his time with Houston counts; you can't lose your Bird rights through a trade), any contract up to about $4.0 million a year, OUTSIDE of the Mid-Level Exception.
  • As many contracts as we want to players who will accept the veteran minimum.

BUT all of this spending is limited by the Luxury Tax line. Last year, the Hornets spent right up to that line, coming under it by a few hundred thousand. I would expect that we will do the same thing this year.

That line was set at $68 million last year. So we have about $9 million to spend.

If we had not sold the draft pick, we would have had $8 million to spend. The amount of money the Hornets got for the pick is undisclosed. Whether it goes into the pocket of Shinn or not depends on whether the Hornets make money this year or not.

An example would be; We sign Pargo for $3.5 million a year, Bonzi Wells for $4 million a year, and have $2.5 million to spend on a Free Agent Big like Ronny Turiaf.

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