Post-Gordon-Signing Hornets’ Salary Update

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Published: July 16, 2012

What can the Hornets do after their busy week?

Since our prior examination of the salary cap, the Hornets have traded for Brad Miller and signed Eric Gordon. Let’s talk about these, then look at our salary figure and what it means.

Brad Miller

Brad Miller has a $5,104,000 in salary owed to him on his expiring deal, but only $848,000 is guaranteed. Last season, he announced his intentions to retire. In the deal, the Hornets also received cash. Putting this all together, it seems the Hornets will buy Miller out with the cash sent to them by Minnesota, then he will retire almost immediately, while the Hornets net draft picks as their compensation for their trouble.

Until this happens, Millers’ salary is on the Hornets’ books, and his spot on the roster reduces our roster charge. Once it does happen, only his $848,000 will remain on the books, and the roster charge will go back up.

If Miller’s salary would not affect his team’s books, Minnesota would not have traded him, they did this to clear space to make an offer for Batum.

Eric Gordon

Eric Gordon’s cap hold was smaller than the salary owed to him this year according to the deal he signed, so this signing has reduced our cap room by the difference. He was already included in the roster charge, so it was unaffected by the signing.

Roster Charge Note

The roster charge reduces the amount a team can make in a single signing. It does not affect the total salary a team can spend, however, as it decreases until the roster stands at twelve. Thus, it’s inclusion needs to be understood in context. This will be made clearer going forward, but it should be understand that different cap numbers can all be viewed as correct in different contexts.

Again, this stuff is not easy.

Cap Room

We have nine players either under contract or who are unsigned first round draft picks. When these first round draft picks are signed, $1,230,440 will be removed from our room as they will sign for 120% of scale rather than the 100% of scale included in the salary figure at present. As a function of number of signings, here is our cap room, or maximum value of the total of the signings:

  • 1 signing – $630,991
  • 2 signings – $1,104,595
  • 3 signings – $1,578,199
  • 4 or more signings – $2,051,803

The above illustrates the effect of the roster charge.

Note that the cap room amounts to being able to sign only rookies to the minimum, and teams are always allowed to sign minimum players, including veterans. Therefore, the Hornets’ salary figure is effectively $0 in terms of signing free agents. This is not the case, however, once trades enter the picture, or dumping nonguaranteed salary, which brings us to . . .

After Brad Miller is bought out and he retires, we free up some cap room, gain a roster spot, and incur more roster charge resulting in:

  • 1 signing – $4,413,387
  • 2 signings – $4,886,991
  • 3 signings – $5,360,595
  • 4 signings – $5,834,199
  • 5 or more signings – $6,307,803

Other Notes

The Hornets still have the Room Mid-Level exception worth $2,575,000 and veteran minimum exceptions. Any trade exceptions, the Mid-Level exception, and the Bi-Annual exception had to be waived since the Hornets used cap space to sign Anderson, evident by the imbalance in the deal as reported. Once a team uses cap space, they lose the above exceptions.

If Darius Miller signs a minimum deal for two years, his salary will be the rookie minimum, thus filling a roster spot and adding salary exactly equal to that of the reduction is roster charge. In this case, his pending salary has no meaningful effect on the above.

The same goes for any other rookie minimum salary signing.

If he signs for more than the rookie minimum for some reason, he’ll have a more measurable effect on the cap room.

Also, the Ryan Anderson salary is still being estimated. When I see the real structure, I’ll use it. Due to restrictions on how much salary can change in a year and how the deal was reported, the error in this year’s salary is bounded by about $1.5m

Update 2012.07.20: I’ve updated the numbers in this post to reflect the Ryan Anderson deal that has been officially reported, which was constructed differently than was estimated.

Preview of Next Offseason

We’ll give a more in-depth look in a future post, but we’ll take a sneak peek today since moves this offseason must be partially graded on how they affect the future.

Too often, the short-sighted observers grades a move on its immediate effects or some direct comparison of players involved, if applicable. Deals are much more complex than that, and limiting the evaluation of a move to its effects on the present, a player, the future, or in any other way does a disservice to the observer’s appreciation of the business of basketball. It takes years of effort to put together a championship season, a fact that makes those titles all the sweeter.

Back to the matter at hand . . .

With the same assumptions about Anderson’s deal above, and assuming the Hornets pick up all team options for players on the roster, that they only bring in players on one-year deals, that they fail to make playoffs, keep their first round pick, and rookie salaries are stable, then the Hornets will have around $12.9m to offer in a single deal, which may be enough to offer a max deal to a young player, depending on how the cap changes.

It’s too close to call at this point.

The Hornets will not have enough to offer someone with 7 or more years in the NBA a maximum deal without a major change in the cap.

Not picking up any of the current team options raises this number to around $20.5m, with the other assumptions unchanged. This should be enough to offer most NBA players a maximum deal.

These options can be picked up through October 31, 2012. Over the coming season, the Hornets can, of course, make moves to affect both of these scenarios positively or negatively.

27 comments
Ken
Ken

The Hornets still don't have a true center. Is there enough cap space this season to sign someone decent?

kfte
kfte

You guys do a outstanding job. It seems if though you need to be a CPA to figure out how to manage the cap. Henry us doomed with that 3.1 mil. He isn't worth that figure based on what I saw last night against the Trail Blazers. There is nothing selfish about CP3, Alteregoofjeffbower. With a Jeffbower has part of your handle.That lets me know your basketball IQ is weak at best. You need to change your name to Jeff "Bad Contract I, don't know how the manage the cap"Bower.

AlterEgoOfJeffBower
AlterEgoOfJeffBower

kfte: I meant the Bower reference to be a joke, though I do respect Jeff Bower and admit he knows much more about the game than I do. I hope my use of his name is not too subtle; as Mr. Calmes says, the Hornets have educated fans. Regardless, it's funny to me that you and Bower think very highly of Chris Paul, while the current Hornets GM and resident genius, Dell Demps, traded CP3 away. Some people with a higher basketball IQ than either you or I have begun to recognize that CP3 is now a step slower, the consensus worst flopper in the NBA and a PG who only flourishes in pick and roll offenses like the Clippers that will never get his team past the second round of the playoffs (remember Game 7 against the Spurs in 2008 and the humiliating blowout against Denver in 2009?). While the real Jeff Bower might work hard to try to get Chris Paul back in a Hornets uniform if he were still here, I as Bower's Alter Ego will enjoy sitting in the Arena during games like last season's, watching the look on Chris' face when he realizes he just lost to a bunch of nobodies in an embarassing return to the New Orleans arena.

Jason Calmes
Jason Calmes

How about just Jason? We don't need to get into titles here.

Jason Calmes
Jason Calmes

It's a work in progress, but the keys are that we keep trying AND that you readers do, too. We need to have the most educated fans. It's critical, I feel. We'll get there. Not everyone needs to memorize the thing, but Hornets fans have to be one step ahead of other fans.

AlterEgoOfJeffBower
AlterEgoOfJeffBower

It's great to see that the Hornets decided to match the Eric Gordon offer sheet, and thanks, hornets247, for successfully guiding this nervous fan through this saga and beyond. Please, Mr. Demps, do not make a push for CP3 next year. Monty already has one prima donna on his hands and does not need two.

Jason Calmes
Jason Calmes

I always appreciate healthy skepticism. Let's see what happens next.

Cornerstone
Cornerstone

Jason, how dig you get the $13+ million number for Gordon's first year? I believe MM came up with $12.9 in his CBA pt1 blog, why the difference?

Jason Calmes
Jason Calmes

There was a one time increase for this year. Coon was not clued in until late either, same as us. Coon has it now, and you can see it in Love's salary.

edbballin504
edbballin504

Jason is our version of Coon. Yall 2 should do a podcast together. Haha.

Josh
Josh

Thanks, Jason. It seems like you are hanging out with Larry Coon a lot.

Ron
Ron

It looks like we'll be pretty tight with cap space this year. If someone (coughEGcough) gets injured, will we have enough room to sign someone else?

Chuck
Chuck

What is the reported imbalance in Anderson's deal?

Jason Calmes
Jason Calmes

Incoming vs outgoing salary... the trade can't be reconciled unless we signed him into cap space.

NOLA_Fredo
NOLA_Fredo

So, in other words, unless the cap for next year goes up, there really isn't a chance for the Hornets to bring back CP3 without making some other moves? Second the sentiment: thanks for the great pieces this entire offseason.

Jason Calmes
Jason Calmes

That is the look of it at a quick glance.

Cornerstone
Cornerstone

Larry Coon said a few days ago that he expects the cap to go up to $60 iirc. I pretty sure this is not being factored in here because they can only work with what they have. You might still be able to fit in a sign and trade with CP3, but that is opening a whole new can of worms. 1. Seriously doubt he will want to come back here. 2. The clippers would want to fleece us to pull it off.

Jason Calmes
Jason Calmes

As mentioned, this was not a big preview. It was not intended to address every contingency, just give a current state based on the facts going forward. There are no answers when the facts are not determined, but we can run some bounding cases.

Mac
Mac

What are the team options?

Jason Calmes
Jason Calmes

ISM is right, no Smith. Again, more detail in a future post. ETA: I was going off Hoopshype. Mike, can you send me the reference for Smith?

Michael McNamara
Michael McNamara

Aminu- 3.75 mil option for 2013-14 Vasquez- 2.15 mil option for 13-14 Henry - 3.2 mil option for 2013-14 J- Smitty- 2.5 mil option for 13-14 (this one doenst have to be decided on until next year, the other 3 by Oct. 31, 2012) As I said on Twitter last night, I would be beyond shocked if Hornets picked up option on Henry. Better backup shooting guards can be had for half that price in this market (See: Jodie Meeks, for instance) If Hornets pick up Vasquez, Smith and Aminu, as I expect, they will have over 18 million in cap room, and the following players under contract Vasquez, River, Gordon at Guard Aminu, Miller, Smith, Anderson, and Davis on front line Let's say they get the 10th pick again and keep it, that is about a 2 million dollar cap hold, plus another 2 mil in holds for empty roster spots, and Hornets have 14 million dollars to play with. That is a max deal to an Ibaka or a Harden type, or they can absorb a SF with a big salary like Deng, Gay, Iggy, or Granger