Finally, the Charlotte Hornets will have salary-cap space. Here’s what we know about that key element of the offseason:
▪ The Hornets project to be at least $28 million below the $115 million salary cap.
▪ General manager Mitch Kupchak isn’t looking to spend it all pursuing one potential star.
So what is cap space for the Hornets? Just importantly, what isn’t it? The Hornets haven’t really had it since the summer of 2016, when they made huge financial commitments to re-sign Nicolas Batum ($120 million over five seasons) and Marvin Williams ($54 million over four seasons).
Kupchak doesn’t plan to deviate from the deliberate rebuild process this season. You won’t see him filling the roster with veterans on the second half of their careers. If they acquire such a player, it would probably be in trade that includes a draft pick coming to Charlotte.
“The primary way we’re going to look to build this team is through the draft and savvy trades,” Kupchak said Wednesday, adding, “I don’t anticipate us being one of those teams that is in the running for those big free agents.”
There is risk the Hornets would either have no success recruiting name free agents this summer, or overpay to sign one. Recall the summer of 2014 when the Hornets missed on Gordon Hayward, then signed Lance Stephenson for $27 million over three years: Stephenson was a disaster who lasted a single season here before being traded. That’s a cautionary tale.
As Kupchak said, “We have to guard against having this money and not using it wisely.”
What’s at stake and what’s available? Diving into what could happen the next year:
The landscape
Projections are the Hornets will be one of seven NBA teams (among 30) with at least $25 million in cap space. Sounds like a lot.
Not necessarily the case.
“When you have $28 million in room, it’s not as much as you think,” said ESPN front-office insider Bobby Marks, formerly assistant general manager of the Brooklyn Nets.
“It could either be one (max-salary type of) guy, or three (lesser) guys. If you have $60 million in room, that’s different — that’s two max guys.”
Marks endorses Kupchak’s restraint, sticking to a plan built on youth and not tying up future flexibility. There is a danger of overpaying for access to free agents. Marks says the Nets were once guilty of that, regrettably so.
“You’re sitting there with $35 million thinking, ‘Well, we’ve got to get somebody!’ So you start giving Johan Petro four years and $20 million. And you pay Travis Outlaw five and $35 million,” Marks recalled.
“These are rotational guys who get you from 25 to 29 wins. And then you are (messed up) because those guys are on your books for the next two or three years. It kills your flexibility.”
The summer of 2020 isn’t considered a particularly strong free-agent class, if you assume All-Stars such as Anthony Davis and Brandon Ingram are likely to re-sign with their current teams. That could be an incentive for the Hornets to minimize long-term obligations in anticipation of a stronger class in 2021.
The problem with that, Marks said, is far more teams — maybe 20 or more — will have significant cap room in the summer of 2021.
There are ways to exploit being one of just a few teams with significant cap space in July. Here are the avenues:
Signings
Kupchak says it doesn’t make sense a year into the rebuild to pursue a “Big Fish” free agent. That doesn’t mean he wouldn’t bait a hook for something smaller.
“Maybe there is someone at the mid-level tier,” Kupchak said of this free-agent class.
Marks suggests Nets small forward-shooting guard Joe Harris fits that profile. Kupchak calls wing scoring a Hornets need. Harris averages 13.8 points this season and has shot 41 percent or better from 3-point range each of the past three seasons.
As Marks said, the relatively small number of teams with significant cap space this summer would work in the Hornets’ favor in pursuing a free agent like Harris.
“There just aren’t that many teams in a position this summer to get Joe Harris,” Marks described.
Trade for a young guy
Teams are reluctant to give up quickly on young players, but it happens. A trade from the Hornets’ past is illustrative:
One of the better moves by Kupchak’s predecessor, Rich Cho, was in June of 2015, when he dealt a future second-round pick and Luke Ridnour’s unguaranteed contract to Oklahoma City for Jeremy Lamb. The Thunder couldn’t figure out how to use Lamb on a championship contender and was looking to open a roster spot.
Lamb became a rotation player — second-leading scorer last season in Charlotte — before signing a lucrative free-agent contract with the Indiana Pacers.
The Hornets’ flexibility this summer allows Kupchak to be in any similar trade scenario in a way he couldn’t have been the past two summers.
“For the first time we have flexibility, where we could look at all the options cap room provides,” Kupchak said, adding, “You could take a player (in trade) straight into cap room” without having to send a salary back to the other team.
Loaning out cap space
The Hornets not only can spend money, abut also they must: NBA rules require teams to spend at least 90 percent of the cap. That means the Hornets’ current player payroll for next season — about $80 million — must rise to at least $103.5 million.
They aren’t required to reach that figure until the end of next season, and Kupchak said it’s likely they could hold back some flexibility for the next trade deadline in February.
“Maybe (you trade) for a decent player and you get a draft pick” as compensation for absorbing that contract off another roster, Kupchak said.
It’s common in the NBA for teams looking to discard payroll to offer compensation — either cash, a draft pick or both. That could be to facilitate another move or to lower or eliminate a luxury-tax bill.
Example: Last July, the Golden State Warriors sent Andre Iguodala and a future first-round pick to the Memphis Grizzlies to get out of Iguodala’s $17 million salary this season. In February, the Grizzlies dealt Iguodala to Miami in a three-team trade and acquired the Heat’s Justise Winslow.
Those are the opportunities abundant cap space could provide the Hornets.
“Maybe $10 million in cap space gets you a first-round pick,” Marks said. “That’s the sort of option you’d expect them to explore.”
