Hornets CBA FAQ Part Three: Ryan Anderson Sign-and-Trade, Cap Space, Trading Picks, and Summer Contracts

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Published: July 9, 2012

In the latest FAQ, we look at some questions facing Hornets fans with respect to cap space and the Eric Gordon situation . . . and summertime!

Larry Coon does a fantastic job covering the CBA, but we understand that it is a little daunting to go through the entire thing. Some misinformation is passed around by Hornets fans on some particular topics, but we can have one place where we can set it all straight. With that in mind, we have collected the most common questions from Hornets fans on the new CBA, on how it specifically affects our players and/or Demps’ options. Without further adieu:

Q: If a team signs Rashard Lewis, will that affect the Hornets’ salary cap figure?

A: Yes. The final year of Rashard Lewis’ contract had a $13.7m buyout, of which the Hornets took advantage. This amount counts against the Hornets’ salary cap figure for the season.

If Mr. Lewis signs with any team, not just an NBA team, his salary for that team for this season will create a “set-off” to reduce the $13.7m he counts in the Hornets’ salary cap figure. It is not a dollar-for-dollar reduction, however.

Since he was not a rookie, his salary is compared to a one-year vet. In this case, the salary is $762,195. The set-off amount is half of the amount of his salary for this season in excess of that amount. If he makes less, the set-off is $0.

For example, if he signs a deal making $1m this season, the set-off is $118,902.50.
Larger deals have a much greater effect, as the vet salary is already `chewed up’. If the deal is for $2m this season, the set off is $618,902.50.

In short, we should be rooting for our Louisiana-born friend to sign a fat deal somewhere.

UPDATE: The Miami Heat have just announced a 2-year deal with Rashard Lewis that pays him the 10+ year veterans’ minimum ($1,352,181) next season. The resulting relief for the Hornets’ salary cap figure is half of the difference between that total and the one-year veterans’ minimum given above, which comes out to $294,993.

Q: Phoenix has five first round draft picks in the next three years, but they can’t give us picks in back-to-back years, can they?

A: Yes they can. The rule that one might think applies is commonly quoted as saying that you can’t trade firsts in consecutive years, but it’s actually more subtle than that.

The real force of the rule is that a team can not make trades involving future draft picks that will leave them with the potential of not being able to use a first round draft pick in a pair of consecutive years.

In the case of the Suns,as  they have two first round picks in 2013, one in 2014, and two in 2015, we can get one in 2013 and one in 2014, for instance.

Q: When do we have to decide about our team options for the players we have on rookie deals?

A: For Davis, Rivers, and Miller, it’s not this year, so let’s ignore them for now. This is just about the only time we’ll ignore Anthony Davis, so savor the rarity.
Aminu, Henry, and Vasquez are all on rookie deals with a team option for next season, and that is their last team option. Those options can be invoked anytime after July 11th through October 31st. If the options are not picked up by then, each of those players will become unrestricted free agents and the end of this season.

Q: Are these “Summer Contracts” eating up our cap space?

A: No. Summer contracts do not count toward the cap unless the player is on the roster on the first day of the regular season. Those players go through the waiver process, so there is a risk of cutting a summer player just to keep his salary off the books, then bring him back. In fact, the players receive no salary on summer contracts, nor can they earn it. They get per diem, transportation, lodging, and disability insurance, plus the opportunity to earn a spot somewhere in professional basketball.

Q: After the Ryan Anderson sign-and-trade, what is the Hornets’ salary figure?

A: In this, we assume that Ryan Anderson’s 4y deal is for exactly $34m and has 4.5% raises. This gives him a first year salary of $7,962,529 with increases of $358,314, ignoring the change, as we do for the rest of the piece.

The Hornets have $36,204,769 in committed salary to players under contract after accounting for the pending sign-and-trade. This increases to $43,777,781 when the scale for our first round draft picks (not the final contract value until they are signed) and the roster charge for having fewer than 12 players under contract is factored in. Additionally, factoring in Gordon’s $9,577,960 free agent amount, we arrive at $53,355,741 as our salary number. Once we factor in our other free agent amounts, we blow past the $58,044,000 salary cap, without even factoring in our exceptions.

If we take on Gordon with a max contract, his cap hold is replaced by his $13,668,450 salary, yielding a cap figure of $57,446,532.

Update: The salary cap for 2012-2013 is unchanged.

Q: How did the Anderson sign-and-trade work?

A: Since the salaries do not match, there are only two ways to complete this trade when the moratorium is lifted: sign Anderson into cap space or sign him into an exception.
If the Hornets have to renounce some exceptions and Bird rights (not Gordon’s) to sign Anderson into cap space, then we will likely be signing Davis and Rivers to their 120% scale deals and vets at the minimum. This is perfectly within the Hornets’ control.

Using the Amnesty on Jack, the only player we can use it on, would help us sign another player in a position of greater need on a non-minimum deal.

If, however, the Hornets can create a trade exception to sign Anderson into, they can maintain their Bird rights and ability to use available exceptions, which may be appealing.

One way to create an appropriate trade exception would be get one in an Eric Gordon sign-and-trade, should the Hornets want to part with him. That may be against the party line, but it is not inconceivable. Jared Dudley coming over with back-to-back firsts would create the correct-sized exception to make this work. This would provide the Hornets with three consecutive drafts with pairs of first round picks, if we keep them all. Other deals with Phoenix are possible, as would deals with other teams to create the correct exception. This one is mention just to show that there is a deal that will work. If it is unacceptable, perhaps it can be modified to become so.

Additionally, the Suns need to lose a couple million dollars in salary to complete all the offseason moves that have been reported. They can create this room by using their Amnesty, but they could engage in a sign-and-trade to get Gordon and free up that room. Again, Dudley fits the bill. He is a good player and a fan favorite, but they want Gordon, so they should be willing to part with him.

Dumping Jack with one of Aminu, Henry, or Smith to another team would also work.

Getting a third team involved to feed some assets to the Hornets to entice them to part with Gordon is yet another option.

41 comments
Evan
Evan

I have to start off by saying that I'm really impressed with how knowledgeable Hornets fans are and this was a very informative Q&A. With that said, I'm certain a lot of our questions will be answered as soon as this Eric Gordon situation passes. Which I'm thrilled to say will happen a lot sooner rather than later.

jjmartin
jjmartin

What about James Harden's contract???

mateor
mateor

I hadn't considered using phoenix to nab an exception to fit ryan anderson. that would be quite clever, and would fit in well with the long-term cap responsibility. good look. getting gordon to phoenix for a servicable big like dudley, the exception and phoenix's (not LA's, although I bet that is where the negotiating is at) next two number ones is far better for NO long term than keeping gordon. That could translate to at worst two lottery picks next year, our own most llikely quite high. that is concievably a starting five by year three all on rook deals and two first rounders to flesh out the roster in '14. Total and complete roster flexibility, with only anderson signed to the dangerous $6-9 mil contract. That is a team that starts to compete for a top four seed in 14-15 and stays there for many years, unless disaster strikes. I haven't felt this optimistic about being a hornet fan since '08. You can really get behind a crap team if you feel like the organization has a plan. And I don't mean like the Bobcats, who just suck in order to say they're trying. Last year was great. You could see the pieces sliding in place, the team was smart and competed hard. All around enjoyable, even though it might have been one of the least talented NBA clubs I have ever seen (especially obvious when Gordon was out...)

504ever
504ever

Jason, Thanks for a very timely and detailed article, that leads me to two questions. Can you enumerate our "other free agent amounts" that take us from a cap figure of $53,355,741 to past $58,044,000? I assume they are for Kaman, Landry, and Belinelli, players we are not likely to re-sign. (Knowing how much each player's hold is will helps conceptualize the magnitude of the problem and how to solve it.) Since they are UFAs, I believe we can renounce them to remove their free agent cap holds. If we chose not to, do we have to wait until they sign elsewhere for the cap holds to be lifted?

Jason Calmes
Jason Calmes

Thanks. It depends on 'estimates' which have have not researched, but they are the holds for the players you memtioned. The holds are at least their last year's salary, so like $4m, $9m, $14m off the top of my head. We can renounce them to get under the cap, correct, but lose the abilty to sign them. Unlikely as we may think, using an exception to give a massive 1y deal is a nice option (see Carl this year). We can sign-and-trade them regardless to get them to teams who can't otherwise sign them to a agreeable deal. Let me know if you need more. I may need to do research, FYI.

Mr. West
Mr. West

Thanks for the read Jason.

lsutigers33
lsutigers33

why would a kaman or landry want to do a sign and trade when they are UFA and probably not that happy NO didn't try to resign them? Shouldn't they just sign with the new team or would they have a chance to gain more salary if they did it?

Jason Calmes
Jason Calmes

Sign and trade opens up the chance to get to teams without cap space or exceptions toto use and still get larger than min salary.

lsutigers33
lsutigers33

thanks Jason Learning a lot about these trade things in the nba this year.

j.v.
j.v.

"If we sign Gordon, isn´t risk to be locked up with him and don´t find any other team that think he is a max player (wich I don´t) to trade later" again . . . let´s take wathever phoenix offers (especially the picks) and build arround Rivers and Davis with picks and cap space future looks nice let that guy go (NO max player) we don´t need unhappy crying babies arround our future stars

stormsurge
stormsurge

Dont we have a $2.3m trade exception for the CP trade still? Can we use it?

Jason Calmes
Jason Calmes

If we have it, we can use it, but Anderson can't fit into that, and exceptions can be combined to get one players. More complex trades can be monkeyed with to make it seem like such a thing is happening, but the simplicity of this one limits that.

Jeffrey
Jeffrey

Clever!

Jason Calmes
Jason Calmes

Only if it works... argh! In retrospect, I should have used adios. Maybe too cerebral, though.

J
J

How about Kyrylo Fesenko and Greg Stiemsma at Center both would be decent but cheap contracts and both under 30 years old.I like also Ian Mahimi,Daniel Orton and Semith Erden.

Jo D
Jo D

Off topic, But it's time to start considering cheap free agent bargains at SF and C Nenad Krstic is coming back to the NBA... Terrance williams? Gerald green?

Chuck
Chuck

Great write-up. Even if we don't have a trade exception, the Anderson deal is still legal because we are under the cap, right? Can we still do that sign-and-trade after matching Gordon or does it have to be the first move so we are far enough under the cap to fit him in? Also I think the CBA link at the top of the post is broken :/

Jason Calmes
Jason Calmes

That is correct about the cap. It can be done in either order since doing both puts us under the cap, but we can sign Gordon no matter the case, if we choose, since we can use the Bird exception. If we do something else that adds salary, we likely have to do the Gordon signing last unless the moves create a trade exception. I'm sure there are more possibilities in this complex game. This cap business is no joke. Link updated. Thanks.

Ben
Ben

Jason thanks for the clarification on the trading picks

David
David

Sign and trade w Kaman, belleneli, or Landry would also provide a trade exception, correct???

Jason Calmes
Jason Calmes

Depends on the trade. Their salaries are not defined. Clearly, this is not an exhaustive list. I'm showing some definite routes.

Ben
Ben

Hey Jason about how often does Your boy McNamara check his email? I'm looking forward to that trade proposal certificate but I've been waiting since Thursday. #notcomplainingjustwondering

Jason Calmes
Jason Calmes

Received. Let's get through free agency.

Cornerstone
Cornerstone

I thought Gordon's figure this year would be $12.9 not $13.7?

Jason Calmes
Jason Calmes

There is a one time 'bump' in max contracts offered this year to the tune of 5.8%ish. I'm assuming it's a straight ratio... no 'steps'. The bump is per Larry Coon. Not the FAQ, Larry Coon.

Schmide234
Schmide234

Arent we supposed to have some large amount of cap space to sign CP or some max player next season?? what happened to that?

Schmide234
Schmide234

right right I forgot about lewis' contract that certainly helps

StefanC
StefanC

We should still be able to make enough space next summer to throw a max contract to a player coming off of a rookie deal (Harden, Ibaka, etc). I'm not sure about CP, though. He will be eligible for a 5 year contract worth roughly $108 million.

mojart
mojart

i think if we sign EG now......and rivers is really are PG of the future....den i will try to lure ibaka out of OKC.....Defense wins Championship.....^^,....he and davis wil have a block party.....

Andrew Denenea
Andrew Denenea

with Rashard Lewis and Jarret Jack off the books we have about 18 mill free next year.

mazonmafia
mazonmafia

Actually, over $19+ with those two. Roughly 5.5 and 13.7

Jason Calmes
Jason Calmes

As of now, Jack's nearly $6m and the nearly $14 to Lewis will come off the books. Those may help. Who's to say it'll happen next offseason . . . why not an extend a trade or a sign an trade . . . then who needs the space if you can match the salaries? But, we can work next season's cap space when the roster shakes out. Discussing it now would take much longer to write than the time until the major dominoes will fall.

Kamarr Narciso
Kamarr Narciso

1.) Do we amnesty J. Jack? 2.) Are we going to trade E. Gordon to PHX?

Analyzer
Analyzer

I does seem we are up against the salary cap wall now as I believe the cap this year will be about $58mil. Something significant will have to happen to free up space to re-sign Landry or grab a budget C.

macs21
macs21

We can re-sign Landry over the cap using bird rights can't we?

Jo D
Jo D

We have to renounce his rights in order to get the anderson trade done

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  1. [...] Hornets CBA FAQ Part Three: Ryan Anderson Sign-and-Trade, Cap Space …Hornets247 (blog)In the latest FAQ, we look at some questions facing Hornets fans with respect to cap space and the Eric Gordon situation . . . and summertime! [...]

  2. [...] provided the basis of our CBA FAQ Part One, CBA FAQ Part Two, and CBA FAQ Part Three, and likely any future [...]