What the proposed CBA means to the Hornets and Chris Paul

ESPN has obtained a copy of the seven page
offer that the players plan on discussing, and
possibly voting on, at some point today. It might
be pointless to break down this current proposal,
as speculation continues to grow that the players
will turn down this latest offer and push for
decertification, but what else do we have to do at
Hornets24/7? Should we just move on to
covering the D-League and analyze the selection
of Jamaal Tinsley as the first pick of the draft. I
say no. I say we wait until the season is officially
canceled before we get that desperate. For now
we hold out hope and take a look at how a deal
like this would effect our Hornets.
1. Salary Cap
In the first two years of the proposed CBA, the
salary cap and tax levels would be “no less than
their 2010-11 levels.” This means that there
would likely be a salary cap set for a little over 58
million, with a luxury tax line drawn right around
the 70 million dollar mark. Currently the Hornets
have 6 players on the books for just over 42
million, which brings us to the new salary cap
exceptions.
The Hornets would be in position to use the non-
taxpayer exception, which starts at five million
dollars annually and increases 3 percent in years
three and four. This means that the Hornets can
make either a 3 year/15.15 or a 4 year/20.4
million dollar offer to another teams free agent if
and when this offseason begins. This will be a
significantly higher offer than taxpaying teams
like the Lakers will be able to make under the new
proposal. Taxpaying teams will only be able to
offer 3 years at just over 9.2 million. Taxpayers
will also be restricted from using the bi-annual
exception, while a non-tax paying team like the
Hornets could give a 2 yr/4 million dollar deal to
a Willie Green type of veteran.
2. Tax System
The first two years of this proposed deal will
have the same tax system that the past deal had;
a $1 for $1 penalty for teams over the tax. In
year three, however, the penalties grow
exponentially in such a manner that it would be
hard to envision many teams exceeding the tax
thresh hold in the manner that they have done in
recent years. Being 10 million dollars over the tax
line in this deal would mean having to cut a $25
million check and only one team has written a
check that large in the history of the NBA (the
2007 Knicks that went 33-49).
There is also a tax penalty accelerator for teams
that go over the tax year after year, which is
something that could also help competitive
balance. Any team that goes over the luxury tax
four times over a span of five years will have a
dollar increase added to whichever bracket they
are in. So, if the Heatles decide to stay together
and pursue those seven championships Lebron
talked about, they will have to pay a fortune to
do so. Even if they fill out their roster with
marginal talent in 2014-15, they will be looking
at a 40-50 million dollar luxury tax payment if
they still have those three stars on their roster.
Overall, these harsher tax penalties would aid in
creating more competitive balance, but by no
means is it a perfect system. The Lakers new TV
deal will still allow them to cut a sunbstantial
check every year, and the Knicks, Mavs, etc. will
likely do the same. The hope is that because of
new additions in revenue sharing and bulkier
rebate checks, the smaller market teams will have
the resources to exceed the tax line as well when
it is good business to do so and/or for the “right”
players. Whatever that means.
3. The CP3 Rules
Let’s stop kidding ourselves. All we really want to
know, and have ever wanted to know with this
new deal is whether or not it will help us keep
CP3. No doubt this new deal helps the Hornets
secure ownership, as the new system helps
ensure that this will be a financially viable
business if run with even moderate efficiency.
But how excited will we all be about a new owner
if CP3 bolts and we are looking at the 2005-06
Hornets all over again?
Well, one option off the table for CP3 is the
extend and trade (otherwise known as the
Carmelo Rule). The Hornets will not be able to
extend CP3 and trade him to a team during the
season. A team could, however, acquire CP3 and
extend him themselves, but they would have to
wait until six months after acquiring him to do so.
Therefore, if a team acquires CP3 prior to
December 29th, they will be able to give him his
maximum amount of money (opts in on June
30th, signs extension).
This could be a nice little game of chicken
between Hornets management and CP3, should
Paul ’s camp ask for a trade. The Hornets can
offer CP3 an extension the second that this
whole mess is over for around 6 years/127 million
(including the opt-in year). If CP3 chooses to
opt-out in the summer and sign with a new team,
he would be looking at a maximum of four years
and right around 75-80 million. The Hornets
would also have the option to do a sign and
trade at that point (since it is allowed under the
first two years of the proposed deal) and give
CP3 a five year deal worth right around 105
million before shipping him off elsewhere.
Bottom line is that this new deal would give the
Hornets quite a bit of leverage in negotiations
with Paul, but at the end of the day, Chris Paul is
not going to be a guy held hostage by money.
Yes, he could be giving up two years and nearly
fifty million dollars if he chooses to call the
Hornets bluff and not sign an extension, but I
highly doubt that will stop him if he sees a
destination that will help him achieve his dream
of multiple titles.
What this new CBA would do, in effect, is speed
up the clock for the Hornets with regard to the
Chris Paul situation. For Paul to get his maximum
money and for a team trading for him to get him
locked in for the full six years, the deal would
have to go down before the new year. Last year,
the Denver Nuggets had until late February to
play chicken with both Melo and the Knicks, and
got the best return possible because of it. The
Hornets would not have the same luxury. They
will, effectively, have to choose their course of
action by December 29th because the trade
offers will get progressively worse once the team
trading for Paul loses the ability to extend him
for the full six years.
Or perhaps this whole mess ends with the players
agreeing to a deal today and CP3 agreeing to
remain a Hornet for the next six years late on this
month. After all that we have suffered through
with this lockout, is that really too much to ask?