Post-Gordon-Signing Hornets’ Salary Update

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.


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