Eric Gordon Exercises $15.5 Million Player Option for 2015-16 NBA Season

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Published: June 18, 2015

The New Orleans Pelicans have announced that Eric Gordon has opted into the final year of his 4-year, $58 million contract that he signed three years ago. The 26 year old shooting guard will make just over $15.5 million in the 2015-16 season, all of which is guaranteed. Gordon is coming off of the best shooting season of his career, making 141 out of 315 attempts from beyond the arc (44.8%). Despite suffering a torn labrum injury early in the season, Gordon decided against season-ending surgery and returned after just 21 missed games, a decision that ultimately helped the Pelicans reach the postseason for the first time since 2011.

It was rumored that Gordon was putting out feelers around the league to see what kind of long-term deal he could lock down if he were to opt out, but this should not come as a surprise, as most players would do a similar type of due diligence with their future employment status on the line. Gordon has frequently discussed how happy he is to be a part of this Pelicans team, and repeated those sentiments upon the organization’s hiring of new head coach Alvin Gentry (who was the head coach in Phoenix when Gordon signed his restricted free agent offer sheet with the Suns back in 2012). Barring an unforeseen trade opportunity presenting itself, Eric Gordon will likely once again be the Pelicans’ opening night starting shooting guard next season.

Salary Cap Snapshot

With the news of Gordon opting in, the next question is how his 2015-16 contract impacts the Pelicans from a salary cap perspective. The team now has six players – Gordon, Evans, Holiday, Anderson, Davis, and Pondexter – under fully guaranteed contracts for the 2015-16 season, taking the Pelicans’ total salary up to about $55.8 million of a projected $67.1 million salary cap. In a nutshell, there are two main scenarios in play here – the Pelicans renounce most or all of their existing free agents to become a team operating under the salary cap, or the Pelicans re-sign one or more of their current free agents and operate over the salary cap. These two scenarios result in very different sets of options for New Orleans as far as filling out the roster is concerned. I dug into how this may play out last month, but I’ll rehash below given the new information about Gordon.

Scenario A – Operating Under the Cap

The most likely way for the Pelicans to end up following this path is if Omer Asik is not re-signed (and Ajinca isn’t offered an outlandish extension). Should Asik be renounced, New Orleans would have about $11.3 million worth of space for the remaining nine roster spots, of which at least six must be filled. After cap holds are taken into account for the empty roster spots, the Pelicans would be able to offer no more than $8.7 million to any individual free agent (in an off-season during which players will be looking for more money to account for the cap jump coming next summer). Apart from this cap room, the only additional exception available to a team using cap room is the Room Mid-Level Exception, which can be no more than a 2-year contract beginning at $2.8 million. As you can see, this route is a much more prohibitive one as far as roster construction is concerned. If the Pelicans were to create more cap space by trading one of its other guaranteed contracts, then operating under the cap may make a lot more sense, but as the roster currently stands, the upside would be minimal.

Possible roster: Holiday, Gordon, Evans, Pondexter, Davis, Anderson, $11.3 million in cap space, $2.8 million room exception

Scenario B – Operating Over the Cap

Re-signing Omer Asik would more than likely vault the Pelicans over the cap before making any other moves. While breaching the salary cap may sound frightening, doing so provides New Orleans with many more options in order to fill out the roster. As noted previously, the Pelicans are able to exceed the salary cap to re-sign all of their current free agents except for Fredette and Cunningham. In addition, teams operating over the cap are also entitled to the mid-level exception ($5.5 million) and the bi-annual exception ($2.1 million), both of which can be divided up between multiple players. Assuming the Pelicans want to stay below the luxury tax threshold of $81.6 million, the Pelicans would have up to $18.2 million to divide among the likes of Asik, Ajinca, Babbitt, Cole, and Withey, plus exceptions of $5.5 million and $2.1 million to divide among any other free agents around the league (including Fredette and Cunningham). Note: the Pelicans would likely refrain from spending all of that money this summer in order to give themselves a bit of breathing room beneath the tax threshold for the purpose of in-season transactions.

Possible roster: Holiday, Gordon, Evans, Pondexter, Davis, Anderson, Asik, Cole, $5.5 million MLE, $2.1 million bi-annual exception (with room for one or more out of Ajinca, Babbitt, and Withey depending on each player’s contract demands and team’s stance on the luxury tax)

Summary

Now that Eric Gordon has done what almost everyone expected by exercising his $15.5 million player option for the 2015-16 season, Dell Demps will turn his attention to filling out the roster while keeping both the short-term and long-term in mind. If the Pelicans become a team operating under the cap, not only will the roster almost certainly be inferior to last season’s team, but it will inevitably have fewer assets to bring to the table in trade negotiations. In order to assemble the best possible roster with the strongest collection of assets, the Pelicans will likely end up operating over the salary cap. I addressed who I think the team will bring back to make that happen in a post last week, and Michael McNamara did the same on Monday; now the question becomes what Dell actually has up his sleeve.

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