Hornets GM Mitch Kupchak on Kemba and luxury tax
The Charlotte Hornets have offered less than $170 million to resign Kemba Walker, meaning that there’s a strong chance the All-NBA point guard agrees to terms with another NBA team when free agency opens Sunday night.
An Observer source confirmed that the Hornets aren’t comfortable paying $170 or more over five years — far less than they’re allowed under NBA rules — over concern they would end up paying the league’s luxury tax. Unless that changes, it looks likely the Hornets will lose Walker with no compensation.
When Walker was named All-NBA after this season, he qualified to be paid as much as $221 million over five years. The most any other team can pay him is $140 million over four years. The extra year and larger raises the Hornets can offer are intended to give a free agent’s prior team significant advantages in keeping him.
However, the Hornets have such a clogged payroll — the five highest-paid players combine to make $84 million next season — that re-signing Walker could set off a luxury tax, the NBA’s penalty for bloated payrolls, and reduce the team’s revenue-sharing payment from the league after next season. That would cost owner Michael Jordan millions and might be the difference in a profit or a loss for the 2019-20 season.
The Hornets’ resistance to crossing that line has opened the door to Walker’s departure. Reducing the difference in contracts to less than $30 million undercuts the one advantage the Hornets had over other teams to keep Walker and opens the door for other suitors.
The Boston Celtics, the Dallas Mavericks and Los Angeles Lakers all have room under the salary cap to offer Walker a maximum contract. Each of those teams also can promise Walker a better prospect of playoff runs over the next four seasons. Walker has called the chance to win a factor in his decision.
Other teams can start negotiating with Walker starting at 6 p.m. EDT Sunday. The Celtics, expected to lose point guard Kyrie Irving, figure to make an emphatic pitch.
Free agents can’t start signing contracts until July 6.
An All-Star each of the last three seasons, Walker is the Hornets’ only true marketable star for a franchise that has failed to make the playoffs since 2016. He was tenth in the NBA in scoring last season at 25.6 points per game and is the Hornets’ all-time career scorer with 12,004 points over eight seasons.
Walker started in February’s All-Star Game in Charlotte and was named third-team All-NBA in a media vote. That All-NBA award qualified him for a “supermax” contract, which raised the most the Hornets could pay him from $189 million to $221 million.
Hornets general manager Mitch Kupchak said in April the team was all-in on paying Walker to stay.
“We’ll do everything that we can to bring him back here,” Kupchak said just after the season’s conclusion. “There has not been a player with this franchise like Kemba Walker. He is a once-in-a-generation kind of player.”
In that same media session, Kupchak said the Hornets had numerous opportunities over the past year to trade Walker. Sources say the Cleveland Cavaliers were involved before the 2018 draft, and the Mavericks inquired about Walker at the February trade deadline.
“I think our position has been unwavering,” Kuphak said of playing this out to free-agency, rather than trade Walker.
With recent changes in NBA rules, it’s unlikely the Hornets could do a sign-and-trade with Walker. So if he leaves, it will likely be for no compensation.
Jordan has said it doesn’t make sense for a team not in contention to have a player payroll that exceeds the luxury-tax threshold, projected to be $132 million next season. The Hornets have at least $98 million in guaranteed salary for next season, $101 million with unguaranteed salaries for Dwayne Bacon and Willy Hernangomez.