Quick New Orleans Pelicans Salary Cap Room Analysis: Jrue Holiday

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Published: June 28, 2013

The Draft Night Jrue Holiday trade the New Orleans Pelicans participated in will affect their vaunted Cap Space, clearly. With the Free Agency negotiations starting on July 1 and deals commencing on July 10, it is imperative to know the Cap situation going into that mess, as if the NBA Cap is ever not a mess.

Short Answer:

The team will have $5,863,093 in Cap Room and Eric Gordon, Anthony Davis, Jrue Holiday, Ryan Anderson, Robin Lopez, Jason Smith, Austin Rivers, Greivis Vasquez, Lance Thomas, Brian Roberts, Darius Miller, and Terrel Harris under contract with no other player’s Cap Holds or Bird Rights in all likelihood.

Long Answer:

First, we have to understand the deal. The trade will not commence until July 10, 2013 at the earliest. It is on this date that the NBA will actually set the Salary Cap and Tax Line based on their accounting from the 2012-2013 NBA Season.

At that time, Noel may or may not have signed his contract. If he has not, while there will be a Cap Hold $2,643,600 (scale for 2013 6th pick) on the Pelicans’ books, he will have $0 in trade. If he has signed his contract, likely for $3,171,600 (120% scale for 2013 6th pick, max allowable), that value will be on the Pelicans’ books and that will be his value in trade. The 42nd pick also has no value and likely commands only the rookie minimum ($490,180 this season). Plus, it generates no Cap Hold. The protected 2014 the 76’ers receive from the Pelicans also has no value in the trade’s financial calculation.

Jrue Holiday’s extension kicks in, giving him $9,213,484 this season, then $9,904,495, $10,595,507, $11,286,518 in the following seasons, no options. That first season is all that matters for this analysis, but we might as well include the extra info, because we are so helpful here.

These salaries do not `match’, or meet the requirements of the Traded Player Exception, which is actually could be available to the New Orleans Pelicans if they so desired. Since they do not, this means they are trading Jrue Holiday into Cap Space, and such deals so not require such matching.

Though this allows the deal, the team is forgoing use of the Non-Taxpayer Mid-Level Exception ($5,150,000) and the Biannual Exception ($2,016,000) in favor of the Room Mid-Level Exception ($2,652,000) and $5,863,093 Cap Space. Note that the total of the Space and Room Exception is more than the two Exceptions, plus Cap Space is more useful, as this unbalanced trade beautifully illustrates.

Since a single player with a guaranteed contract is being traded for a single first round draft pick or a signed player, the net effect on the the Cap Room calculated at Salary Central is to remove the pick’s Cap Hold and add in Holiday’s salary.

$12,432,977 + $2,643,600 – $9,213,484 = $5,863,093

This Cap Room can be used to sign any Free Agent or used to as room to trade a player into. If a second round pick is traded, say . . . #42(!) Pierre Jackson . . . before he is signed, then the Pelicans can take back up to $5,863,093 and still comply with the Cap rules. If they instead traded Greivis Vasquez or Robin Lopez, the could take back $8,013,281 or $10,982,854, respectively, or $12,642,862 if trading both for a single returning player (a roster charge of $490,180 applies) or $13,133,042 for two returning players. This total value will increase by $490,180 for each player returning in trade, if the team using Cap Space.

This can not be combined with exceptions to sign players. For example, a $6,000,000 player can not be signed by the Pelicans as a free agent using Cap Room and just a smidge of an exception.

The maximum Cap Room with trading salary away is $12,388,104. This requires losing Robin Lopez, Jason Smith, Lance Thomas, Brian Roberts, Darius Miller, and Terrel Harris, but factoring in any guaranteed money owed to the cut players.

The team will retain the ability to use the Traded Player Exception to go over the Cap, along with the Minimum Salary Exception.

This is a reasonable amount of flexibility given that the team’s needs just dropped with the acquisition of Holiday. Prior to the Holiday trade, the team was expected to have $12,432,977 in Cap Room, which is about what it took to acquire Lopez and Anderson last Summer. He got a player that costs about what Anderson costs. Now he can go get a Small Forward with Cap Space or doing a sign-and-trade with someone for Aminu, for example.

14 Comments

  1. NOS3RDGEN

    June 28, 2013 at 10:32 am

    Question? In this Trade wasn’t we supposed to get MCW as I saw that on the NBA DRAFT Night trade of every player being traded during the draft, Also trade G.V. & R.Lopez to Detroit to receive Andre Drummond.!

  2. Houpgarou

    June 28, 2013 at 10:36 am

    6 mil not bad, love to see us use that and rolo’s space to go after asik. mle to sign chris copeland

  3. NOLAbrah504

    June 28, 2013 at 11:52 am

    Feel like we can find a decent stopgap at SF to allow us to compete for a playoff spot.
    I really want to keep EG10 at the moment (obviously I have no idea what offers for him have come across Dell’s desk) and see if we can’t make this “big three” click.  EG10 has got to look around and realize that playing with two All Stars (Holiday and AD23) and living in the CBD/Warehouse District of New Orleans ain’t all that bad.  Jalen Rose recently ranked NOLA as a top 5 city for black NBA players to live in when you consider the weather, amenities, and lifestyle/demographics.  If I were involved with the Hornets I’d make sure that players are aware of how amazing living in downtown NOLA can be – showing them where CP3 and Reggie held court, giving them tours of condo buildings in the CBD, French Quarter, and WHD, and just getting a buy-in on how great of a city NOLA is – literally a WORLD-CLASS TOURIST DESTINATION that millions of people regularly travel thousands of miles to specifically visit.

    • josephplum

      June 28, 2013 at 12:37 pm

      NOLAbrah504 
      I agree with your taste in lifestyle, but there are different strokes for folks. New Orleans is not wholesome and family oriented, for example, and maybe Gordon or some other folks want that. New Orleans isn’t as business oriented (Prot. wrk. ethic) as other towns, and some super competitive guys want that. And don’t forget the commute out to the facility. Aren’t there some gated mansion areas in the Metry/Kenna area? I actually don’t know. 
      I love it here, and I’d assume some NBA guys would too, but I understand that it’s not for everyone. Just one more piece of the puzzle for Dell to assemble.

      • NOLAbrah504

        June 28, 2013 at 12:48 pm

        josephplumNOLAbrah504
        yeah maybe eric gordon just wants to stay home on a Friday night.  Then again…
        http://i210.photobucket.com/albums/bb45/Crestor11/lmao_eric_gordon_article.jpg

      • bigindian

        June 28, 2013 at 3:14 pm

        NOLAbrah504 josephplum

        Stop.  This is the best picture ever.  Why have I never seen this before.

      • josephplum

        June 28, 2013 at 3:53 pm

        NOLAbrah504 josephplum 
        Yup. I’d stay home too. Nice living room and all.

  4. NOLAbrah504

    June 28, 2013 at 12:52 pm

    Holiday / Gordon / Copeland / Davis / Lopez with backups Anderson / Vasquez / Smith / Rivers that’s a playoff team, mi jihos.

  5. lsutigers33

    June 28, 2013 at 12:56 pm

    certainly seemed like we would have more room than 5.8.    No one really overpaid that we need to get rid of.  Interesting how 58m can get eaten up pretty quick.
    We may need to forge forward and play small  AD, RA, FA, EG, JH. or just go big with Lopez, AD, RA, EG, JH.     bench rivers, GV, miller, Smith
    Just hope that we can get 2 solid players for he 6-7m we will have available.   

    would love to figure out a trade for EG to Charlotte for a sign and trade of GH and a future pick.  GH only demands about 5m a year and then we have the cash to go get iggy.

  6. mojart

    June 28, 2013 at 1:31 pm

    I want to know if this trade can be void come july 10….ala chandler to okc trade because of not passing the physical or sonething happen….I love the trade by the way….just curious

  7. adogg57

    June 28, 2013 at 2:13 pm

    Would anybody be interested in a sign and trade for Andrew Bynum? I know about the injury risk that he presents, but could he be worth something like a 2 year/ 22 million dollar deal. We could give him that type of money if we included Lopez in a sign-and-trade for Bynum. I think this could work out well, even if we would create an extremely injury prone roster. At worst, Bynum could show Davis a few post moves. If it doesn’t work out, then we can just let him go after 2 years. But if he can stay healthy, we would potentially have 2 of the top 10 big men in the league.

  8. yaboytonez

    June 28, 2013 at 7:52 pm

    Wow I love this site! You guys are really on top of this!

  9. mazonmafia

    June 29, 2013 at 12:31 am

    Surprised no one has mentioned that Jrue and Iggy played together for a while in Philly.  From what I’ve heard, Iggy thinks very highly of Jrue.  Maybe that will make NOLA a top choice for Iggy this free agency period…  Just a little something to full the fire. 🙂

  10. Pingback: The Missing Piece: Almost There | New Orleans Pelicans | BourbonStreetShots.com

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