5 offseason needs for the Charlotte Hornets

2. Open up cap space while minimizing long term commitments

This point is largely technical, but it revolves around the salary cap and luxury tax thresholds, as well as where the Hornets sit relative to them. Right now, assuming the Hornets waive Tony Parker’s non-guaranteed $5,250,000 salary, they have $97,539,249 in salary on the books. That does not include Kemba Walker, Jeremy Lamb, or Frank Kaminsky, but more immediately relevant for our calculations, it doesn’t include the cap hold for the 12th overall draft pick, which is $3,826,920, bringing the new total to $101,366,169 for 11 players.

If the Hornets elect to re-sign Kemba Walker, the relevant threshold that they must dodge is the luxury tax, which accounts for all salaries across the whole roster. This means that not only do they have to fit Kemba Walker and his new, very large salary under the tax, but also they have to find space for at least two more minimum contracts, at $897,158 each, in order to get to the minimum 14 player roster that the NBA requires teams have. With the luxury tax threshold projected at $132,000,000, this would require Kemba Walker to take $28,839,515 in the first year of his contract, nearly four million less than his maximum. Further, if the Hornets do intend to offer that, even accounting for the larger raise amount that owning Walker’s Bird Right’s grants them the ability to give, every other team with a max slot would still be able to offer more over the first four years of the contract by about $11.4 million total. As a result, if the Hornets intend to re-sign Kemba Walker, they will almost certainly need to have a clear plan in place to get money off of the books. This is even truer if you expect them to need to add talent to persuade Walker to stay, which is hard to do with no money.

But even if they plan, whether voluntarily or not, to let Walker walk, they’re still in a position where opening up money if they can is beneficial. Turning back to the $101,366,169 number, if the relevant threshold that you need to avoid is the salary cap, then by rule you have to also add in a roster slot hold at the minimum salary in your calculations. With the salary cap projected at $109,000,000, that leaves $6,736,673 in cap space. That’s less than the mid-level exception and practically not much to make trades with. If Walker leaves, and so kicks off a rebuilding phase for the Hornets, being able to use cap space to absorb dead salary is one of the longest-running strategies to build assets, and the Hornets are right on the cusp of being an interesting trade partner with the combination of expirings.

Right now, the amount of cap space they have doesn’t leave them much room because of how the thresholds for how you have to match salary in trades are set up. The total cap space is not much larger than the $5 million difference that most trades in the general price range of the Hornets’ expirings already are allowed to have. But as a hypothetical, let’s say the Hornets swap Kidd-Gilchrist ($13,000,000 expiring) for Jon Leuer ($9,508,043 expiring) and a second round pick, and then turn around and offer Marvin Williams to the Kings for Harrison Barnes and the next Kings’ first that doesn’t fall in the top 20. The salaries in both of those trades match, but the second trade, which is the big asset win, is only possible because of the first trade opening up the additional bit of cap space needed.

There’s also a key part in this that the Hornets shouldn’t take on significant long term obligations in clearing space, especially in the scenario where Walker is returning. Waiving and stretching Bismack Biyombo, for example, while it may be necessary should no other option hit the table, would be less preferable to a deal that ships Marvin Williams out while bringing back a smaller salary. Deals that send out Biyombo but also cost the Hornets their first-round draft pick are equally unpreferable since that’s a long term obligation too in the form of draft capital. This will be the most difficult to execute part of the offseason by far, but so long as the Hornets are prioritizing minimizing the future costs instead of purely opening up a certain volume of money, should be able to come out of the offseason relatively unscathed in the long run.