Trade Jeremy Lamb for a future second-round pick?
It could potentially take something that extreme for the Charlotte Hornets to extricate themselves from a player-payroll challenge next season. They have spent all this season close to the NBA’s luxury-tax threshold, and that problem could get worse, rather than better, for the 2018-19 season.
Right now, with the NBA’s trade deadline looming Feb. 8, the Hornets have about $117.3 million in guaranteed salaries this season. The NBA’s luxury-tax threshold this season is slightly more than $119 million. Hornets owner Michael Jordan has said several times in the past he has no intention of paying luxury tax on anything short of a team capable of advancing deep into the playoffs (a reasonable position).
The Hornets’ payroll situation could worsen for the 2018-19 season, when the NBA’s salary cap and luxury tax numbers aren’t expected to rise much. As of now, the Hornets are committed to guaranteed contracts for 10 players, plus an option on fourth-string point guard Julyan Stone’s $1.6 million. Add up those salaries, and the Hornets are on the hook for about $118 million. That would not include a salary for a first-round pick. Assuming they miss the playoffs and have a lottery pick, that would add approximately another $3 million guaranteed to the payroll.
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Based on projections the league has distributed to NBA front offices, the luxury-tax threshold will rise minimally, perhaps to about $120 million. So the Hornets would already be near or above the tax line before filling out the 14- or 15-man roster. That would include either replacing or re-signing backup point guard Michael Carter-Williams.
That sounds like a mess. It helps explain why the Hornets explored star point guard Kemba Walker’s trade value, including whether a team would be willing to take one of the Hornets’ problematic contracts in order to acquire Walker, too.
The six most expensive salaries on this season’s cap all return, guaranteed for next season. Each of those – Walker, Cody Zeller, Michael Kidd-Gilchrist, Marvin Williams, Nic Batum and Dwight Howard – is owed $12 million or more in 2018-19. Batum is scheduled to make $24 million and Howard $23.8 million.
The Hornets were going for quick results now when they traded in June for Howard, a future Hall-of-Fame center in his 14th NBA season. Howard has played well, probably his best season since he was with the Houston Rockets in 2014-15. However, the Hornets have a losing record and are in serious jeopardy of missing the playoffs for a second consecutive season.
Somewhere along the way once this season ends, the Hornets will have to create some wiggle room with the payroll. Bobby Marks, an ESPN front-office insider and formerly assistant general manager of the Brooklyn Nets, suggested trading Lamb as one avenue to relieve the this payroll problem.
Lamb would be attractive to other teams because he’d be coming off his best NBA season, his salary is reasonable next season at about $7.5 million, and his contract expires after next season. Of course, those would also be the reasons the Hornets wouldn’t want to lose him, after investing four seasons in his development.
Trading Lamb for little more than cap relief would be pretty draconian, but something of that nature might be the only fix. The Hornets could have a challenge interesting another team in Batum’s or Williams’ or Kidd-Gilchrist’s contracts without taking back a comparably problematic contract.
The Hornets could shop around power forward Frank Kaminsky, but that would change only so much about the numbers, since he’s still on the rookie pay scale and makes $3.67 million next season.
Marks called the Hornets’ openness to listen to offers for Walker “collateral damage” from the other signings and trades the Hornets have made. Batum, Howard and Williams all hit the jackpot by reaching unrestricted free-agency in the summer of 2016, when new national television deals with ESPN/ABC and Turner Sports caused a dramatic one-time spike in the league’s salary cap (each team’s soft cap jumped from about $70 million in the 2015-16 season to $94 million in 2016-17).
A season-ticketholder might pose the question, why should the fan base care whether Jordan has to write a check to the league as a taxpayer? But the penalties for being over the tax threshold extend beyond financial. For instance, taxpaying teams have more limited access to salary-cap exceptions, such as the midlevel and the biannual exceptions. There are also limitations is transactions like sign-and-trades.
Part of the challenge for the Hornets in managing their cap will be the limited number of teams likely to have any significant cap space in the summer of 2018. Marks estimates only six or seven of the NBA’s 30 teams figure to have significant space under the projected new cap number of around $101 million.
Even once the Hornets do create some payroll relief, they will have limited opportunities to improve the roster with free-agent signings. Marks said that will make it extra important the Hornets have a great developmental off season.
“You have to hope in this situation that your first-round pick is ready,” Marks said. “Also, their rookies from the last draft, (Malik) Monk and (Dwayne) Bacon, are going to have to be contributors.
“It’s really up to those guys now to be your bench.”