The Charlotte Hornets are entering into perhaps the most important offseason of their 29-year history. After eight fun-yet-painful years with Kemba Walker in town, Charlotte is now faced with the challenge of determining the value of the best player they’ve ever had.
In 2011, Charlotte selected Walker ninth overall and preceded to win just seven times in a lockout-shortened 66-game season. Since then, Walker has slowly grown from an inefficient volume shooter into one of the best and most exciting shot-creators in the league.
Coming off the best season of his career, averaging 25.6 points per game, Walker earned himself third-team All-NBA honors. And, more importantly, Walker earned himself the opportunity to sign a supermax contract worth $221 million over five years, should the Hornets choose to offer it, that is.
For Walker, a seemingly loyal guard who happens to be in the fun-sized frame that historically hasn’t aged well in the NBA, the fifth-year option he could have by staying in Charlotte would be appealing even if he had not made an All-NBA team. Had that been the case, Walker would be up for a $189.7 million deal — $31.6 million less than what he can earn now.
The decision may not simply come down to finances for Walker, however. In Walker’s time in Charlotte, the Hornets have finished above .500 just twice — both seasons ending in the first round of the Eastern Conference playoffs. Charlotte’s last postseason appearance happened at the worst time — just before the once-in-a-lifetime cap-spike of 2016. Charlotte is still feeling the pain of that summer; next season, Nicolas Batum, Michael Kidd-Gilchrist, Marvin Williams, and Bismack Biyombo (whom they did not sign in 2016 but have acquired since) will make just a hair over $70 million combined.
Coming off 36, 36, and 39 wins since that summer, it isn’t hard to determine whether or not those contracts have paid off for the Hornets. This bloated salary sheet has made it incredibly hard for the Hornets to improve the roster around Walker, forcing Charlotte to settle for win totals in the high 30s.
Charlotte will have $102 million in committed salary before facing the free agency of Walker (and Jeremy Lamb, who has turned into one of Charlotte’s better all-around players). That number, however, could easily drop should the Hornets choose to stretch the contract(s) of Biyombo, Williams, or Kidd-Gilchrist, that all have just one year remaining.
Biyombo would be the easy choice, as he makes the most and does the least. Stretching his remaining $17 million over three years would free-up $11.3 million in space next season, lowering Charlotte’s committed salary number to about $91 million.
With a projected $132 million luxury tax number for the 2019-2020 season, a $38.8 million Year 1 supermax salary for Walker would leave Charlotte just $3 million to improve the roster (before paying their draft picks) should no other salary-cutting moves be made.
In the short-term, neither party wins in this scenario assuming wins are the first priority. Even if Charlotte hits a home run with the No. 12 pick in June’s draft and see drastic improvement from the likes of Malik Monk, Miles Bridges, and other young names on the roster, the Hornets are looking at a ceiling of a mid-40s win total.
If both sides are willing to be patient, this would only be short-term pain. Walker would be settling for another season of mediocrity when he could be winning playoff games elsewhere. The Hornets would be paying a lot of money for a middle-of-the-road roster. Again, this scenario would require patience from both Walker and the Hornets.
By next summer, Biyombo, Williams, and Kidd-Gilchrist would be off Charlotte’s books. Batum and Cody Zeller (making a combined $52.5 million) would be in the last year of their deals. The skies will have cleared and Charlotte will finally have a chance to build a competitive roster around Walker — hopefully, a bit more frugally this time around.
There is a quicker route to salary-slashing for Charlotte — attaching draft picks or young players to the expensive veterans this summer. This wouldn’t be the wisest way to use assets, but it is certainly an option and perhaps one that Walker would be interested in.
Attaching Monk to one of those salaries makes the most sense; he’s disappointed through two years and doesn’t offer the upside of Bridges and whomever they select in the first round later this month. Whether Monk is good enough to actually justify taking on a big salary is another question. Inefficient volume shooters come around every year. Some turn into Kemba Walker, more fizzle out of the league. Some teams, though, are willing to take the risk.
The process Charlotte would have to go through to shed salary and re-tool around Walker is short-term and fairly painless. But there is an even bigger question Charlotte must ask itself: is Walker even worth what they’ll be paying him?
It’s a decision that must be made while considering more than simple wins and losses. With Walker, the Hornets barely draw fans — this past season they filled just 86.5 percent of their arena on an average night, 23rd in the league. They have yet to crack the top 20 in Walker’s career.
As NBA team values increase every year and new money constantly pours into the league, everything seems fine and daisy for even the worst performing teams. When looking at operating income, however, it offers a different perspective on the prospects of a small market team.
Despite putting out losing teams year after year, large market giants like the Knicks, Lakers, and Bulls sit comfortably over $100 million in operating income. Small markets franchises, even winning teams like the Bucks and Thunder, sit much closer to zero.
Don’t get it twisted: a small market basketball team making money is an improvement over where they used to be. But for those organizations, pushing the luxury tax line is a heavily-weighed question. Thanks to their expensive Finals run, the Cleveland Cavaliers operated in the negative last year — with owner Dan Gilbert having to dip into his own capital to chase another precious title.
This is something Michael Jordan will have to consider. With $22 million of operating income last year, Charlotte is a couple of deep playoff runs powered by Walker and a new roster away from joining Cleveland in the negative.
Small market teams are forced to consider the financial ramifications of every decision that their large-market counterparts don’t have to worry about. While every NBA owner is a billionaire that could easily afford to shell out their own capital in order to win, people don’t get rich by investing in something that offers high risk without a subsequent high reward.
In the business world, the right balance of sheer will, smarts, money, and time can grow almost any company and principal investment. In basketball, there are so many more factors — many of which are out of the hands of any one person.
For Dan Gilbert, throwing some cash at a roster headlined by LeBron James — who appeared in eight-straight Finals — is an easy decision. For Walker, an undeniably fun and talented player that has yet to win a playoff series, it’s not as easy a decision.
Charlotte could let Kemba walk, rebuild through the draft and push back a risky financial investment to when revenues grow across the board and a player more worthy comes along. That is a future where everything breaks right, however, which rarely happens in sports.
When the Sixers tanked, they had a prideful fanbase behind them that had seen past success and was ready to taste some more. Operating in the Philadelphia market helped, too. In Charlotte, where fans don’t fill the building as-is, tanking may not be a viable option. They could be far from the luxury tax but see operating income shrink anyway.
This is a decision 29 teams in the league are happy they don’t have to make. Paying Walker $47 million in his 32-year-old season is something the Hornets may have to do, whether the wins follow or not.