Are The Pelicans Really After Kyle Lowry?

The draft is almost upon us with free agency soon to follow. As the clock winds down towards July 29th, rumors from every corner of the internet flood the news waves. I want to talk about two particular rumors that have been reported by several major outlets and seem to be related. First, the Pelicans are expected to enter the free agency sweepstakes for Kyle Lowry. Apparently the way the Pelicans are looking to open up the necessary cap space for Kyle Lowry is by salary dumping Eric Bledsoe to the Memphis Grizzlies using pick number 10. There is a lot to unpack here so let’s dive right in with the facts and assumptions.

How The Trade Would Work

As mentioned, the Pelicans have very publicly been tied to Kyle Lowry during this pre-draft period. The problem with signing Kyle Lowry is the Pelicans don’t have enough cap space to get it done. If the Pelicans renounce all of their free agents (Lonzo Ball, Josh Hart, James Johnson, Willy Hernangomez, and James Nunnally), the maximum amount of cap room they can generate is $13,586,708. Now Kyle Lowry might be old, but there is simply no way he is coming to New Orleans for only $13.5 million and change. This is where our friends up river of the Mississippi come in. Memphis, if they renounce Justise Winslow and their own free agents, has the cap room to absorb Eric Bledsoe’s $18,125,000 contract without needing to send any outgoing salary. The Pelicans would compensate them for this generous act using the 10th pick and in turn also get back pick number 17 along with maybe some small assets.

A clean dump of Bledsoe would bump up the Pelicans’ available cap room to $33,031,083, factoring in the salary drop from pick 10 to pick 17. This should be more than enough money to sign Kyle Lowry to a 2 or 3 year deal, the question is just how expensive will Lowry be? Markets like New Orleans have to pay a premium to attract free agents, even more so if they are not yet a contender. Lowry is primed to have multiple suitors chasing after him, including contenders such as Philadelphia and Miami. Would it take $25 million per year to sign Lowry? $30 million? The outlook isn’t pretty even with the newfound cap space the Pelicans will have created.

Let’s split the difference conservatively and say it would take a starting salary of $27 million to secure Lowry’s talents (I am skeptical it takes only that amount). This would leave the Pelicans roughly $6 million in cap space as well as the Room Level Exception, ~$4.9 million, to sign players. Neither amount is enough to sign major needle movers in New Orleans, but I suppose you can’t rule out the possibility.

How Does The Transaction Stack Up?

I like the idea of Kyle Lowry a lot on the Pelicans. As the rumored trade stands, the costs of acquiring Lowry are a little too rich for me. The loss of the 10th pick doesn’t bother me as much as completely punting on the opportunity to turn Lonzo Ball into something. The Pelicans not moving Ball at the trade deadline for literally anything only to forgo using him as an asset in possible sign and trades would sting. Remember, retaining Lonzo is also an option that gets completely wiped away if the Pelicans choose this specific route of signing Kyle Lowry. Losing the larger NT-MLE hurts as well, as this is the primary vehicle of improvement for teams operating above the cap. Last year Phoenix was able to sign Jae Crowder using the NT-MLE. The Clippers were able to sign Serge Ibaka. All this seems like too many hoops to jump through for the right to overpay a 35 year old Kyle Lowry.

The best way to acquire Kyle Lowry is to deal with Toronto directly and construct a sign and trade. For example, the Pelicans can construct a trade where Bledsoe and a future first goes to Toronto and Lowry comes back to New Orleans. This pathway allows the Pelicans to retain the 10th pick, along with the rights to Lonzo Ball, Josh Hart, and the full NT-MLE. The Pelicans might even be able to recoup any draft capital spent in acquiring Lowry with a Ball sign and trade. This optionality is much preferred and leads me to believe that any trade with Memphis isn’t designed with Lowry as the main target.

If Not Lowry Then Who?

If the Pelicans decide to carry out a trade with Memphis that dump’s Bledsoe’s contract, a few things can happen. Firstly, as mentioned above, the Pelicans would have up to $33,031,083 to work with if they wanted it. However, this number would be lower in practicality if the Pelicans wished to retain Lonzo Ball or sign and trade him first. If the Pelicans sign Ball to a deal that averages $18 million per year (therefore removing his ~$27 million cap hold), they could have between $15 -$16 million to spend on free agents depending on what Ball’s first year figure is. Some free agents that might be available in this range are:

  • Evan Fournier
  • Lauri Markkanen
  • Kelly Oubre
  • Kelly Olynyk 
  • Patty Mills
  • Doug McDermott

The Pelicans would also be able to trade for players that fall in that salary range without sending any salary back. Some names that fit the bill would be Joe Ingles, Marcus Smart, and Malik Beasley. As you can see, the Pelicans have quite a bit of options here if they don’t decide to go gung ho for Kyle Lowry. The $15-$16 million number can increase a good bit if Ball is signed and traded for less money. At this point the Pelicans open themselves up to the ability to sign my favorite targets – Tim Hardaway Jr. and Duncan Robinson. But there is a way the Pelicans can give themselves even greater optionality. 

Instead of trading Bledsoe to Memphis with the explicit purpose of generating the most cap room possible, what if the Pelicans traded Bledsoe to Memphis in order to generate a trade exception of $18.1 million – Eric Bledsoe’s salary? Let’s discuss the advantages of doing this.

  1. Trade Exceptions last for one full year after they are created. This means if the Pelicans wanted to trade for a player in February whose salary would fit into the exception, they would have the ability to do so. Now of course they don’t have to wait until February to do so, but they would have this ability until next July. In a word, flexibility.
  2. The rights to Ball, Hart, and even the full NT-MLE could remain if you wanted them to. You want to retain Ball? Go ahead. Sign and trade him? Doesn’t matter. It won’t change the size of the trade exception already created. 
  3. Because the Pelicans have a trade exception of their own from the Nicolo Melli trade, they are able to take in $3,897,436 from Memphis and not impact the size of the larger Bledsoe exception that would be created. This means someone like Grayson Allen or Brandon Clarke.
  4. The Pelicans’ ability to absorb players via trade now expands players like Myles Turner, Bogdan Bogdanovic, Terry Rozier, Joe Harris, and even OG Anunoby. By absorbing one of these players, the Pelicans can create a trade exception for the trading team as well as a nice bonus in addition to any compensation sent for them in the form of draft capital
  5. The Pelicans can still go after the free agents listed above and have them signed and traded into this exception – once again creating an exception for the team sending the players. I think this can be really beneficial for a team like Dallas who may choose to operate as a room team and renounce Tim Hardaway Jr but realize they are better off operating over the cap and securing an exception and some assets for Hardaway instead. Likewise for Miami and Duncan Robinson- a large trade exception could be very valuable for them to hold onto.

Concluding Thoughts

The appeal of a player like Kyle Lowry is clear and he likely has a few years of high level play left in him. Nonetheless, the pathway to him shouldn’t run through Memphis. If the Pelicans have engaged Memphis in serious discussions, logic dictates that their real target is someone else. Creating the ability to acquire a shooter like Hardaway Jr. or Robinson at the cost of moving 7 spots back in the draft is a worthwhile opportunity that the Pelicans should jump on. I do not believe the Pelicans are so fixated on Lowry that they are willing to sacrifice all flexibility to get there. However, David Griffin has been fixated on a player before, to the point of losing the MLE and flexibility under the tax line, as we saw last year with the Steven Adams trade. It’s not impossible that all the trouble is indeed for Lowry, but hopefully I’ve explained clearly enough why it would be a mistake to pursue it outside of sign and trade. 


2 responses to “Are The Pelicans Really After Kyle Lowry?”

  1. man, i hope griffin is not fixated on lowry. guys that age can fall off a clif quickly(see jj reddick). we need as many options as possible. flexibilty is the key.

  2. Bogdan is high on my list, guy could teach the young ones. Tim Jr would be 2nd, and Lauri would be a so so consolation prize.

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