Rich Cho has been nothing short of a magician so far this summer and might have just saved his job beyond the 2017-18 season.
In a 72-hour span last week, Cho was able to move the worst contract in the NBA (Miles Plumlee), reunite Dwight Howard with Steve Clifford, and move up in the draft. Inexplicably, this all happened in the same transaction. Pretty remarkable. It certainly makes you moderately nervous that Atlanta was able to pay this price to move Dwight, but a win for Cho and the Hornets, nonetheless.
It gets better.
Charlotte had its best draft in recent memory when scoring savant Malik Monk fell into their laps at 11. With very little flexibility to improve the roster this off-season, Cho is off to a damn good start. Trading the 31st pick for cash wasn’t necessarily a bright spot last Thursday, but Charlotte probably watched a player they wanted at 31 get picked in front of them and figured they could potentially use the cash towards a possible, but not probable, tax bill following the ’17-’18 season. More on that later.
The resilience of the front office in the past week have this team closer to a playoff profile. There are plenty of holes remaining to plug – most notably a backup point-guard and wing depth. The ways to accomplish this, however, are very limited.
Hornets Salary-Cap Details
It’s important to note that under the new Collective Bargaining Agreement (CBA) that will kick in tomorrow, most all cap exception tools available to teams have risen considerably, so this should be good for the Hornets, right? Not so fast.
The Hornets are eligible to use the full non-taxpayer mid-level exception (NT-MLE) and the bi-annual exception (BAE). With the league making teams aware last week that the salary cap is expected to come in lower than once thought – now estimated at $99M – this puts small market teams that are close to the tax line (Charlotte) in a tough spot. All of the cap exception totals (see table below) are set at a fixed price for the ’17-’18 season, but the projected salary cap number will simply drop on top of that, making team building very difficult in a pinch. Insert the Charlotte Hornets situation.
With Charlotte predictably deciding to decline the team-option on Ramon Sessions yesterday, the Hornets payroll now stands at about $116M – only $3M below the projected tax line. Brian Roberts cap-hold is still on the books at $1.4M, so if the team waives his non-bird rights then they could maneuver a little bit father from the tax. But that only creates enough room to spend half of the NT-MLE if your hellbent on staying under that tax line. The reason the Hornets might elect to keep Roberts cap-hold on the books going into free-agency is because it’s a lower number than the $1.7M minimum deal he’d be due anywhere he signs. So if Charlotte doesn’t find a better point-guard on the market with one of their exceptions then they can always come back and take Roberts in at the minimum.
Charlotte is eligible and can spend the NT-MLE at $8.4M, but it will likely take them above the tax line, so don’t consider it likely. It also comes with an added handcuff. By using the full amount of this cap exception, the team would become hard-capped at the luxury tax threshold. Not as if that’s a huge deal for a team merely hoping for home-court advantage in a first-round playoff series, but it forces Charlotte to find their way back below the (projected) $119M tax line before the conclusion of the regular season – because, as Nate Duncan from the Dun’c On Podcast so perfectly illustrates, “Michael Jordan would pay a tax bill on a cold day in hell”. Touch-e.
Using only a portion of the NT-MLE is also an option and likely the one Charlotte ultimately elects – splitting this exception between two players. This will eliminate the scenario of the team becoming hard-capped – just in case, you know, Michael Jordan is confident enough in this group at the trade deadline to actually be a buyer when his team is above the tax line – odds for the forecast ever showing a cold day in hell?
But seriously, this direction also simply makes it easier for the team to get back below the tax line and avoid a luxury tax bill for a mediocre roster (ask Portland how that’s working out). The market for players under $8.4M isn’t necessarily slim, but Cho will have to act early during free-agency in an effort to get the best value on a market that is growing excessively uncertain by the hour.
The team also has rights to the BAE and Charlotte should be able to fit this deal in under the tax line. The BAE has risen in value and is now worth $3.29M, but using the full amount of this exception, like the NT-MLE, hard-caps a team at the luxury tax threshold. Don’t forget that Rich Cho used the BAE to sign Jeremy Lin in 2015. One aspect of this cap exception that might make some sense for the Hornets is that it would be a two-year deal, falling off the books at the same time that half of Charlotte’s current core is due up for a new deal – including Kemba Walker.
Buzz Beat Ep. 31 with Chris Kroeger
We discuss Charlotte’s cap situation and free agent options in the latest Buzz Beat episode. Be sure to subscribe to Buzz Beat so you can take the show on the go.
If the front office has dreams of making another big splash this summer then it will likely have to come via a sign-and-trade. Technically, the most Charlotte can spend is $8.4M with the NT-MLE, but a sign-and-trade deal with another team would allow them to bring in a larger salary and impact player, while also potentially still using NT-MLE or BAE. This requires the Hornets sending salary and attractive players out the door, an area they are limited in. Michael Kidd-Gilchrist, Cody Zeller and Jeremy Lamb are the three most trade-able pieces. Marvin Williams is another possibility, but his value is likely much higher with the Hornets than anywhere else in the league.
Danilo Gallinari, Forward: He has a $16M player-option to decide on and he made comments yesterday suggesting he’s leaning towards declining it and becoming an unrestricted free-agent. At the age of 28 and for a player who hasn’t played more than 63 games in a season since 2013, I would think Gallinari would give serious consideration to opting out of his option for ’17-’18 and agreeing to a sign-and-trade on a four-year deal that would provide him with some financial security as he ages into his thirties.
I’d propose the Hornets sending back MKG in a deal like this. On paper, it makes some sense. Denver needs defense on the wing and Gallinari would give Charlotte some juicy versatility offensively.
For the Hornets, though, they’d be tied into four years of very risky money in an aging Gallinari – a timeline that probably doesn’t make a lot of sense with four core players coming off the books in the summer of ’19. Charlotte, of course, could aim for a team-option on the fourth year of the deal, but that would make this trade unlikely to get done. Also, who knows what Denver actually thinks about MKG – or any other team in the league, for that matter.
Dion Waiters, SG: It’s likely that Miami would like to bring Waiters back, so this isn’t a likely scenario, but… Coming off of a career season with Miami, Waiters is due to cash in this summer. He has a player-option this summer for $3M, which you can count on him declining. Waiters market, however, will be fascinating to watch form. There is a camp that believes he found himself in Miami under the Heat’s intense weight and player development program and then there are the doubters in his game that believe last season was an anomaly. I stand somewhere in the middle on those two trains of thought, but wouldn’t be upset to see Charlotte attempt at a sign-and-trade for Waiters.
His market is going to fall somewhere in the $12-18M range. It’s just hard to see this deal taking shape due to the fact that the Heat are presumably chasing more cap space in an attempt to attract a Gordon Hayward or Blake Griffin this summer. To that end, Charlotte doesn’t have the room to take any salary off of Miami’s hands – it would require a third team getting involved. If the Heat were willing to start a conversation, MKG is probably too redundant to Justice Winslow and I don’t see anything else on the roster they’d be interested in. Lamb and a future pick?
Rudy Gay, Forward: Gay has already opted out of his $14.2M player-option for next season, which is a bit surprising since he tore his left Achilles in January, but he wants out of Sacramento immediately and is seeking one last long-term contract as he turns 31 in August.
It’s doubtful that the Hornets would be willing to part with too much in a deal like this – Charlotte would actually be doing the Kings a small favor since they are going to lose Gay for nothing barring a sign-and-trade. Maybe the Kings would be willing to kick the tires on Jeremy Lamb for a few seasons with their ocean of cap-space.
Full Non-Taxpayer Mid-Level Exception Targets
Again, it’s unclear whether or not Charlotte will elect to spend the full amount of the NT-MLE ($8.4M), but they don’t have to in order to find value.
The QCH team jumps in to provide some of their favorite targets for the Hornets during free-agency as well.
Mark Buonocore (@HornetSportSpot): Michael Carter Williams, PG – With the Hornets having a relatively small back court MCW would fit nicely at 6’6″. Good defender with ability to run an offense. Plus, motivated to prove he is better than he was last year. Cheap deal starting at $3.5-4M with a team-option on the second year.
Spence Reaction: I don’t hate this. It’s similar to the Jeremy Lin deal in 2015, where Cho was able to find broken goods and give that player an opportunity to resurrect his career. I also like the fit of MCW more now with Malik Monk in the fold.
Brian Geisinger (@bgeis_bird): Deron Williams, PG – Sticking with the 2005 NCAA title game vibe, Deron Williams could be a fit, too. We last saw Williams in the Finals, which didn’t go great. But he played well in Cleveland’s aerial launch bunch. Williams splashed 39% of his catch-and-shoot 3s, posted an assist rate north of 40% with the Mavs. $5.5M – portion of NT-MLE.
Spence Reaction: When BG told me his price point for Deron, I got goosebumps. Not in a good way. Then he explained how he got to that price and it made a lot more sense. Williams was a totally different player in Dallas last season before being bought out and initiating his corpse onto the floor during the playoffs for Cleveland. This one is tough, because I liked him as a target for the Hornets at the trade deadline last season. My guess is that Williams ends up staying in Cleveland at the minimum.
Richie Randall (@RichieRandall): Shelvin Mack, PG – There’s not a dispute over which position the Hornets will be focusing their attention on this free agency — it’s only a matter of type. That makeup could come in the form of Shelvin Mack. He isn’t the flashiest one-guard but has a steady presence on the court. With Monk being drafted, it makes sense to lean towards a point who can defend either guard position like the 6’3″, 203 pound Mack. Price point: $5.5M – portion of the NT-MLE.
Spence Reaction: Yep. I like this fit a lot and Mack should be attainable for what Hornets have ability to spend. Splitting the NT-MLE between Mack and a wing makes sense and should be affordable. Richie’s price point is a little high for what I believe the market will demand, but it’s tough to tell. If Charlotte could get Mack at somewhere around $4M to start on a three-year deal with the final year being partially guaranteed, that’s a win.
P.J. Tucker, SF – This could fill a huge gap for the Hornets and their wing depth issues. Tucker is an awesome wing defender and can also guard PF’s due to his strength. He’s a better three-point shooter than you think (35.7% last season), so can give you some form of a spacing component offensively. My only concern with Tucker is his redundancy with MKG, but if P.J. is willing to sign in Charlotte for just shy of the full amount of NT-MLE then I think you do it and figure out the cap math later. Four year deal starting at $7.5M with a team-option on the end.
Joe Ingles, SF – Ingles market should exceed the full amount of the NT-MLE, so don’t expect Charlotte to realistically be in the hunt with him. That said, Ingles will turn 30 before the start of next season and if Charlotte was willing to ink him to a four-year deal of guaranteed money with max annual raises of 5%, he might just go for it. That’s roughly $36M in financial security into his mid-30’s. Inlges can be a ball-handler and offensive creator, has switchy defensive capabilities, and he’s a 40% 3FG shooter. This would be a perfect fit for the Hornets.
Sacramento Kings to decline extending qualifying offer to Ben McLemore and he’ll become unrestricted free agent, league sources tell ESPN.
— Chris Haynes (@ChrisBHaynes) June 28, 2017
Ben McLemore, SG – McLemore, a highly regarded lottery pick out of Kansas in 2012 to Sacramento, has been a disappointment in the NBA. He did turn a corner last season, shooting a career best 38.2% 3FG. He’s a good athlete and has some defensive promise put in the correct situation. For something that won’t surprise you, Sacramento wasn’t the correct situation. This is a Hornets kind of acquisition. Damaged goods that you can get great value on for the price point. He is probably going to demand something in the $5-8M range, so Charlotte could use a portion of the NT-MLE here, but the BAE and a one + one (player-option) deal makes some sense for him as well in order to get him back on the market sooner. The more I think about this fit, the more I like it.
Bi-Annual Exception Targets
Can Charlotte find another Jeremy Lin steal with the BAE, just as they did two summers ago?
Brian Geisinger: Raymond Felton, PG – LAC’s second unit wasn’t a total sieve, like years past, which Felton deserves credit for. Felton can still run a pick-and-roll, shot 60 percent in the restricted area, swished a cool 57.1% of his corner threes (16-of-28), per NBA data. He also found success in dual-point guard lineups with Chris Paul, which Steve Clifford could try with Kemba Walker. Full BAE, $3.29M.
Spence Reaction: Felton’s career has outlasted my expectations and appears to be aging nicely. I’m less optimistic that he would be able to play with Kemba very much – especially at the end of games – but Ray-Ray could certainly run the second-unit with plenty of competency. Would like to see the price point be the BAE, at the most, for a 33-year old Felton.
Andy Moore (@pastorandymoore): Aaron Afflalo, SG – You can never have enough shooters. The ten year vet has shot over 40% from three in six of those seasons, including last year. Afflalo has bounced around the league the last couple of years but could really find a home in Charlotte as a 3 and D player. Full BAE – $3.29 Million.
Spence Reaction: This is interesting. Afflalo has been forgotten among many NBA circles and hasn’t been discussed much leading up to this free-agency period. For what the Hornets need, shooting and defense on the wing, he can certainly bring. His price point is tough to gauge, but since he’s turning 32 in October, the BAE might just get it done.
Tyreke Evans, SG – He ended the season on a high note last season after being traded to Sacramento. In 14 games with the Kings, he averaged 11.6 points, 3.6 rebounds and 2.4 assists while shooting 43.8% 3FG. He can create offense, guard SG’s and SF’s and can be on the floor with Kemba at the end of games. It feels like it’s the right time for a make-right deal for Evans – a two-year, full BAE, paying him $3.29M next season with a player-option on the second year to get him back on the market quickly at the age of 28. Seems right.
This years free-agency period won’t remind you of the madness from last summer, when almost everyone had cap-space to chase their dreams.
But this year will still provide fireworks.
Ten teams should have significant cap-space when we reach midnight tonight, so the max money that can be thrown around is limited, but there are still plenty of good players looking for homes in an unstable market. With the correct strategy, free-agents could be had at a discount – the forecast is for this market to dry up pretty quickly, so players that are offered early into the free-agency process will have a tougher time saying no than usual.
Advantage – creative GM’s that think outside of the box. Insert Rich Cho.