Although the New Orleans Hornets management has implied that the roster will remain intact next season, average fans might see this as more management doublespeak.
It is obvious to even the casual observer of the Hornets that unless a younger, better supporting cast is put around Chris Paul, the team will continue to be a one and out playoff team at best.
Improvement for the Hornets is not going to be as simple as going out and buying some free agents. The NBA has a salary cap and a luxury tax for those that exceed the cap.
If you are interested in a good summary explanation of the NBA salary cap and luxury tax calculations, I recommend a brief read of the article on Wikipedia.
New Orleans' projected payroll for next season is nearly $76 million. Teams with a payroll exceeding $71.15 million this coming season will have to pay the league a luxury tax dollar for every dollar they are above this amount.
Tax revenues are normally redistributed evenly among non-tax-paying teams, so there is often a several-million-dollar incentive to owners not to pay the luxury tax.
While most NBA teams hold contracts valued in excess of the salary cap, few teams have payrolls at luxury tax levels. Some owners seemingly have money to burn and do not care about the luxury tax at all.
For example, in 2005-06, the New York Knicks payroll was $124 million, putting them $74.5 million above the salary cap, and $62.3 million above the tax line, which Knicks owner James Dolan paid to the league.
Every NBA owner wants to win. The draw of the glory of an NBA championship is just too strong to resist. Hornets owner George Shinn is no exception.
To win next season, he has the option of keeping the core of his roster, adding a couple of experienced free agents and looking for a gem in the upcoming draft. However, it is not probable that Shinn is interested in paying even more luxury tax.
His move to unload center Tyson Chandler and his salary to the Oklahoma Thunder was an indication that Shinn wants to avoid the tax if possible. The following contract amounts represent that Hornets salary cap number for next season:
Peja Stojakovic $13,392,000 Tyson Chandler $12,300,000
David West $9,075,000 Antonio Daniels $6,600,000
James Posey $6,031,800 Morris Peterson $5,800,000
Chris Paul $13,722,567 Rasual Butler $3,945,000
Hilton Armstrong $2,801,198 Julian Wright $2,000,040
In addition to these players, the following Hornets either become free agents or have non-guaranteed contracts that do not count against the 2009-2010 contracts: Sean Marks, Melvin Ely, Devin Brown, and Ryan Bowen.
So what are the Hornets to do? The obvious answer is to get rid of some of the under- performing expensive players and add some new ones who are better and less expensive. Not so fast!
It is not as easy to drop some of the contracts as you might think. Most NBA player contracts are guaranteed.
Even if the Hornets were to waive expensive but not so productive players, the Hornets are still obligated to pay the contracts and the salaries would still count against the cap.
Released/waived players with guaranteed contracts are included in their former team's payroll. Players whose contracts are not guaranteed are included in team salary in the amount they made while they were with the team.
Players on non-guaranteed are not included in team salary unless they make the regular season roster.
If another team signs a waived player who had a guaranteed contract, the player's original team is allowed to reduce the amount of money they still owe the player by the by what is called the right of set-off. This is the case if the player signs with any professional team—it does not even have to be an NBA team.
The amount the original team gets to set off is limited to one-half the difference between the player's new salary and a pro-rated share of the minimum salary for a one-year veteran.
The dilemma for the Hornets this offseason is: find a way to jettison enough of the players and their contracts to free up salary space to sign one or two key players while maintaining enough of the team chemistry that has helped the Hornets be fairly successful over the last few season.
In part two of this series, I will look at each player on the roster individually and make an evaluation of should he be replaced and more importantly, can he be replaced.