Hornets CBA FAQ Part One: Eric Gordon, Anthony Davis, and CP3

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Published: June 24, 2012

We answer several questions regarding the Hornets options with Eric Gordon, look at Anthony Davis’s rookie contract, and talk about max deals for CP3 and Deron Williams

Larry Coon does a fantastic job covering the CBA, but we understand that it is a little daunting to go through the entire thing. I see a lot of misinformation passed around by Hornets fans on some particular topics, and I figured 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 effects our players and/or Demps’ options. Without further adieu:

Q: Okay, can somebody just explain the amnesty to me in laymen’s terms?

A: The amnesty provision allows you to completely wipe a player’s contract off your salary cap. The owner of the team still has to pay the player, but that number will not count towards the $58 million  salary cap or the $70 million luxury tax. It can be used one time per team, and it can only be used on a guy who was on the roster with his current contract before the lockout. So…

  • No, the Hornets can not trade for a guy and then amnesty him.
  • No, they can not sign Eric Gordon to a big contract this summer and amnesty him in the future if he keeps getting hurt
  • Yes, the Hornets can still use the amnesty on one player and one player only- Jarrett Jack, who has one year on his deal at a little over 5 million. Not very likely.

Q: So, Eric Gordon is a restricted free agent this summer. In what ways does this new CBA effect him?

A: First we have to talk about his cap hold, which will be 9.6 million dollars- despite the fact that his qualifying offer is only 5.1 million. That cap hold will remain until Gordon either signs the QO, or a new contract. In the event that he signs with another team, the Hornets will have three days to match the offer. The maximum offers Gordon can get are:

  • 4 Years, 55.2 million dollars from another team [12.922, 13.504, 14.085, 14.667]
  • 4 Years, 57.5 million dollars from us  [12.922, 13.891, 14.861, 15.830]
  • 5 Years, 74.3 million dollars from us [5th year = 16.8]

His maximum salary stars off at 12.922 million for next season, and other teams can increase that salary by 4.5% every year, while the Hornets can increase it by 7.5%. Also, the Hornets are the only team that can offer him a fifth year.

Two other things to bear in mind are that Gordon did not qualify for the larger maximum salary deal for players with his number of years of NBA experience, as Derrick Rose has. Also, the maximum salary for a player depends on the salary cap as well as years under an NBA contract (regardless of playing time). The salary cap has a floor set for next season equal to the cap for last season, but the cap can increase. That information will come available in a couple of weeks. If the cap goes up 3%, the maximum salaries increase 3%, for example, since maximum salaries are a percentage of the cap. Any change in the cap will simply mean the Hornets will be slightly less affected by offering Gordon a max as long as they are willing to spend well above the cap, which most teams do. This is because the fixed deals the team have will not increase at this rate, but the effect is small.

Q: How would a sign-and-trade work with Eric Gordon if the Hornets wanted to go that route?

A: First, and foremost, this can not happen until after July 1st, so Gordon (and every other restricted FA for that matter) can not be put into any trades on draft night. After July 1st, Gordon would have to find a team and if that team wanted to offer Gordon a contract that the Hornets didn’t want to match or if Gordon told the Hornets he would just sign the QO and leave next year if not traded, then the Hornets could work out a sign and trade. If the team was a non-luxury tax team, the Hornets could take back as much as 17.9 million dollars in player salary or as little as nothing if the team had 12.922 million in cap space.

If the team they were trading him to was a luxury tax team, the Hornets would have to take back between 10.3 and 16.5 million dollars in salary. Also, if another team does sign Gordon to an offer sheet and the Hornets match, the Hornets can not ever trade Gordon to the team he signed the sheet with, and if they want to trade Gordon in the next year, he must approve the trade.

Q: Since Gordon gets injured all the time, can the Hornets give him a lower base salary with performance (games played) bonuses?

A: The Hornets can not put an incentive bonus for number of games played per the CBA, but they can be creative and give performance bonuses that can have the same effect. They can structure the contract so that up to 15% of it is earned by reaching certain benchmarks, but games played can not be one of those benchmarks since teams have sat players in the past so they would not reach that benchmark.

Q: What if the Hornets wanted to go after Deron Williams this year or CP3 next year? How much cap room would we need to have to give them a max contract?

A: The max salary for either of those players will start at 105% of their previous years salary. For Deron Williams, that would mean 17.2 million. Chris Paul’s would start a little higher, meaning the Hornets would have to get 18.7 million under next year to throw a max deal at him. Compare that to restricted guys coming off of rookie deals like Serge Ibaka and James Harden, who would only count for 12.922 million their first year.

Q: What will Anthony Davis’s salary look like over the course of his rookie contract?

A: Assuming the Hornets start him off at 120% of the scale, these are his cap numbers:

  • 2012-13: 5,144,280
  • 2013-14: 5,375,760
  • 2014-15: 5,607,240
  • 2015-16: 7,065,123
  • 2016-17: 9,184,660 Qualifying offer; 17.6 million dollar cap hold

Throw Questions at us in the comments section and we will make sure to address them in Part Two of this series. 

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