Charlotte Hornets

Sudden spike in NBA salary cap will complicate Charlotte Hornets’ planning

Point guard Kemba Walker, here with coach Steve Clifford, has a four-season, $48 million contract that is the only significant guarantee on the Charlotte Hornets’ salary cap beyond next season.
Point guard Kemba Walker, here with coach Steve Clifford, has a four-season, $48 million contract that is the only significant guarantee on the Charlotte Hornets’ salary cap beyond next season. AP

Hey, who doesn’t love found money?

The Internal Revenue Service determines you overpaid your taxes by $200. Some distant relative remembers you in her will for $1,000. Some company gets purchased by a conglomerate, doubling the value of the 50 stock shares you own.

In the summer of 2016 each of 30 NBA teams will find a windfall of new national television revenue. Reports say each team’s salary cap will rise from about $67 million next season to about $90 million for the 2016-17 season.

That’s a nice problem to have. Doesn’t mean it’s not problematic. The Charlotte Hornets have started planning for a different landscape regarding free agency in a world where most every team will have plenty of financial flexibility, at least initially.

Hornets vice chairman Curtis Polk is paid to oversee owner Michael Jordan’s various businesses. He’s a strong advocate for strategic planning, as in avoiding impulsive decisions now that might keep the team from better choices later.

To that end, the Hornets are trying to project how this sudden wealth will change competitive balance between the league’s small and large markets. The Hornets have also beefed up the pro-personnel side of the front office, hiring longtime Phoenix Suns executive Todd Quinter as director of pro scouting.

“We are really assessing the other players around the league who will be free agents in the next couple of years – how their skill set and demeanor and personality and whatnot might be a good fit here in Charlotte,” Polk said.

Polk said the important difference between fantasy sports and the NBA is team building is about more than an aggregate of statistics.

“One plus one doesn’t necessarily equal two. You hope it equals three but sometimes it might equal zero,” Polk said. “There’s going to be a market for a lot of guys and you’re going to have to be selective about who fits with what your team’s culture is as well as how the team is going to play offensively and defensively.”

The other issue regarding the influx of new money is potentially widening the gap between the large-market franchises and the small-market franchises.

Everyone will be better off for the new revenue. But as Polk noted, this will allow certain large-market teams to dip back into free agency in a way that might not have been possible in a cap that grows marginally season to season.

From season to season, a team like the Hornets spends to the level of where the cap it set. Teams like the Los Angeles Lakers, New York Knicks, Brooklyn Nets or Chicago Bulls generate enough additional revenue that they can spend up to the luxury-tax limit every season.

Very suddenly that tax threshold will spike to about $108 million per team the summer of 2016, and that isn’t necessarily good news for the Hornets.

Think of it this way: With only point guard Kemba Walker’s $12 million guaranteed for the 2016-17 season, the Hornets will have abundant cap room. But so will a majority of NBA teams.

In a tight market for free agents two summers ago, the Hornets were able to sign center Al Jefferson. In a loose market resulting from all the new television revenue, it could be much harder to sign players of Jefferson’s status without severely overpaying.

Bonnell: 704-358-5129; @rick_bonnell

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