Figuring out the Hornets’ Salary Figure

Published: July 12, 2012

Let’s walk through once and for all, until Dell does something.

I’ve been grinding out some salary figures, but I wanted to expose my calculations to the readers for a few reasons.

The most important reason is to make sure that I’m not screwing something up. If I am, chuckle to yourself, then gently offer the correction.

A close second in importance is for our readers to get more familiar with the cap and salary rules.

Lastly, I think our readers would greatly appreciate being able to understand the moves the Hornets can and can not make at this time.


The salary cap is a dollar amount set every season by the NBA and is related to NBA revenue projections. When a salary figure exceeds this amount in certain ways, teams incur a set of restrictions to the changes they can make to their roster. There is a second, higher number called the tax line. When the salary figure exceeds this amount in certain ways, further restrictions are incurred in addition to a set of financial penalties.

We are only concerned with the Hornets’ situation here, and we focus only on the cap.

The salary figure is more than salary. It includes various `invisible’ values as well. We will cover all of these. Those values contribute to the complexity of these NBA salary discussions. The various rule changes are another major component. The sheer number of rules does not help.

Committed Salary

This is the easiest part of the cap discussion, and even it is not as easy as one would hope. The basic issue is that not all salary reports agree, and not all deals are reported in all places.

Here are the numbers I’m using: 

Ryan Anderson: $7,962,529.27

Al-Farouq Aminu: $2,947,800.00

Jason Smith: $2,500,000.00

Xavier Henry: $2,323,200.00

Greivis Vasquez: $1,191,240.00

Those rookie values are 120% of the set scale in the year they were drafted, and Smith’s deal was reported when he signed it after the lockout.

Anderson’s deal is an estimate on my part, based on an assumption that the $34m total value is 100% accurate and that there are max raises of 4.5%. Since raises are not compounded, there are 6 units of increase in the four year deal, along with four units of base salary. The first year has no increase, and the next has one increase. The third year gets another increase, so it is two increases over the first year, and the last year is three units over the first. This gives our six units. Thus, we divide the total deal value by 4+6*0.045 = 4.27 to get the starting year salary. We then calculate the increase and fill in the rest of the deal, rounding appropriately. If someone sees an actual breakdown, let me know.

This gives an estimate of the total salary of $16,924,769.27 for the five players mentioned so far.

I am leaving some unguaranteed and Summer deals out of the calculations. Also, the Eurobrow we just got the rights to in the Jack deal counts for $0 since we don’t pay him anything.

Rashard Lewis

Dude never got to play in his home state. It’s a shame.

Anyway, we bought his one year contract out for $13,700,000. This figure counts in the Hornets’ salary figure. It’s kind of invisible, but it’s a real check going to a real player, so it’s not invisible invisible; it’s just that you can’t see it . . . Tom Benson can see it . . .

Then, he signed with the Heat for 2 years at the veteran minimum for his tenure, which is $1,352,181. This allows a small relief in the above figure, reducing the charge to Hornets’ salary by half the amount in excess of a the salary for a one-year veteran, $762,195.

This translates into a $294,993 “set-off,” reducing Mr. Lewis’ contribution to $13,405,007.

This brings our total to $30,329,776.27.

Draft Picks

First round draft picks count in the salary cap as 100% rookie scale for their pick, which is determined every season by the NBA. Players can be signed within 20% of this value and are almost always signed at 120% of scale. Until that happens or there is a public knowledge of it being so, they count only at 100% of scale. Once they sign, or there is a report of what they will sign for, the 100% scale value is replaced.

Second round draft picks do not count against the salary.

100% scale for the first pick is $4,286,900; for the tenth pick, it is $1,865,300.

The corresponding 120% values are $5,144,280 and $2,238,360.

These are move invisible values. These are more invisible that Rashard Lewis’, but not completely so because they represent expenditures that the Hornets will likely make. They under-represent these expenditures in most cases, but they are chosen as fair numbers in a vacuum since the signing of those picks can be within a range of values.

So this is fair. This is like setting aside money for these likely expenditures. This line of reasoning is the basis for what is commonly called a cap hold, of which there are many types.

With the cap hold for these two players, we bring our total figure to $36,481,976.27.

Eric Gordon

Eric Gordon is the Hornets’ lone restricted free agent. He is a Bird (after Larry Bird) free agent since he played with the same team for three consecutive seasons. Since he was traded, his Bird rights transferred with him. This is important because a team can always sign their Bird free agents into cap exceptions designed for this purpose.

Cap exceptions are the means by which team are allowed to add any salary (not just net) in a transaction that ends with their salary figure exceeding the cap.

Since a team has the ability to sign such a player regardless of how they may be restricted from signing other players, a cap hold impedes the efforts of teams from using cap space to add talent and this exception to sign the Bird free agent additionally. A moment’s consideration should show the snowball effect this cap hold inhibits. In general, this is the kind of thing cap holds were invented to do.

Gordon’s cap hold of $9,577,960 brings our total to $46,059,936.27 for our eight non-Lewis players considered.

Roster Charge

Now we come to some really invisible stuff.

NBA rosters must have 13 players on them at a minimum. Thus, when a team is making a signing and has fewer than 12 people on the roster, there is always more work to do. To keep teams from abusing the exception that allows them to players at the minimum to fill out their roster, there is a roster charge in each offseason when a team has few than 12 players under contract. This charge is equal the sum of rookie minimum deals, one for each player `missing’ below twelve.

In order to calculate this number, we add in first round draft picks and restricted free agents. Thus, we have eight players counted in our roster charge calculation.

Thus, our roster charge is 4 * $473,064 = $1,894,416.00 and our salary figure is $47,954,352.27.

Cap Space

Since the salary cap is $58,044,000 for the 2012-2013 season, the Hornets currently have $10,089,647.73 in cap space.

I don’t know what the deal is with the cents, but I’m leaving it there. I have at least one estimate in this any. I’ll update future calculations when I learn more. Again, if someone know the rule, tell me. I don’t really care if no one ever shows the cents. That’s reporting. You think Stern would be let being shorted a penny slide without a witticism? Didn’t think so.

Life Under the Cap

Since the Hornets went under the cap to complete the unbalanced Ryan Anderson sign-and-trade, they had to create cap space. This was done by renouncing the rights to other players: Chris Kaman, Carl Landry, Marco Belinelli, Marcus Banks, DJ Mbenga. These last two are mere technicalities. Renouncing their rights means we agree not to sign them into a Bird exception, but we can still sign-and-trade them provided we can sign them into cap space or a different exception.

By going under the cap far enough to sign Anderson, however, we lose the right to use our Mid-Level exception, Bi-Annual exception, and any trade exceptions hanging around since we had to renounce them, as near as I can tell.

We retain the rights to Gordon, so we can use the Bird exception tied to him. We can also sign our draft picks, so their “20%” is coming to them and does not affect our cap space unless we allow it to do so. We can also sign veteran players to minimum deals for one or two years. These deals are bare minimum, no bonus, no sweetener of any kind.

The team also has the Room Mid-Level exception. This exception is designed for teams that go under the cap and lose access to the exceptions mention above. It can be used to sign any combination of free agents or accept trades into it. It is worth $2,575,000. Players can be signed to one-year or two-year deals with maximum changes of 4.5%. It can be used once each year the team is under the cap and is unaffected by signing players to two-year deals.

Loss of these exceptions makes it hard to add salary, but it increases flexibility. For instance, cap room and exceptions can not be combined to sign a free agent in excess of cap room. For example, $5m in cap room and a $5m exception can not be used to sign a $10m player. An exception can be used to sign players that `fit in’ them. So, many players can fit into one exception, but not one player into many exceptions, roughly speaking.

Cap space, however, can be used in this fashion. Since we were under the cap when we traded Jarrett Jack, we added cap space rather than getting a trade exception. By the example above, the greater amount of cap space is superior to the combination of some cap space and an exception totaling the same amount. One may consider being over the cap superior to being under for a number of reasons, but this is one advantage to operating under the cap regardless of how one assess the general state of affairs.

Putting this together, maximum utility of these resources is attained by consuming the cap room, then using exceptions.


There are two basic roads before us: matching the Suns’ offer sheet to Gordon or not.

If we match the offer sheet, his cap hold is replaced by his salary, which should be $13,668,750.46, increasing our salary figure to $52,045,142.73. This maximum salary is based on the 25% max deal from last season, the cap not changing, and one time increase in max salaries for this season alone. Note well, even last season a 25% max salary ($12,992,194 in the first year) was not 25% of the cap; it’s less. I’m making an assumption that the increase is just a percentage increase to all years of the deal.

Since the Hornets until some time on Saturday to match this offer sheet, they first need to consume as much of their $10,089,647.73 in cap room as possible, then sign Gordon into his Bird exception. The team can then use the Veteran Minimum exception and Room Mid-Level exception to fill in the roster if necessary. This is time-critical because of the time limit to match the deal and the option to sign Gordon into an exception.

If they do not match the offer sheet, Gordon’s cap hold is removed, the roster charge increases by one rookie minimum salary, leaving us with $19,194,003.73 in cap room. We would still have the Veteran Minimum exception and Room Mid-Level exception to fill in the roster if necessary. There would be no time pressure to use this space other than what is dictated by the player market and the need to maintain a minimum salary during the regular season. The latter can be achieved by overpaying vets, and this path seems less likely anyway, so this is not a problem over which we worry.

Further Reading

Besides assistance given to me by a number of helpful people, including readers and writers here and elsewhere and my season ticket neighbors, the best combination of depth, breadth, and accessibility in a source for NBA salary cap information is Larry Coon. He is the go to person for nearly all basketball writers and fans. His FAQ webpage has all of the above information in a more general form if you want to read further. It also has his contact information, including that for twitter.

It provided the basis of our CBA FAQ Part One, CBA FAQ Part Two, and CBA FAQ Part Three, and likely any future ones.

I’ll repost this with updates at some point if it goes over well with you readers.

Remember to let me know what I need to change.

Thanks in advance.


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