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New Orleans and The Cap/Tax

Yesterday, I pulled out some quick and dirty figures about our salary vs. the new cap and new tax. Let's iron out the numbers a little further. 

Our salary situation after the jump:

Player Dollars (in millions)
Chris Paul 14.9
Peja Stojakovic 14.3
Emeka Okafor 11.9
David West 8.3
James Posey 6.5
Darius Songaila 4.8
Julian Wright 2.9
Darren Collison 1.4
Craig Brackins 1.1
Quincy Pondexter 0.9
Marcus Thornton 0.8
Free Agent #1 ---
Free Agent #2 ---
Free Agent #3 ---
Free Agent #4 ---
Hornets Total
67, 540, 045
Salary Cap
58, 044, 000
Luxury Tax
70, 307, 000


(1) How does this affect Chris Paul's rumored availability?

In a way, it doesn't. But let's talk about how it does, first. 

When Morris Peterson was dealt to Oklahoma City, New Orleans still didn't know if it would be above or below the luxury tax. When I wrote my team budget post last Wednesday, I guessed that the team could still be between $200,000 and $300,000 over the tax. In essence, that not only limited the amount of money the team could commit to free agents this offseason, but also mandated the trade of a player like Darius Songaila before the trade deadline.

Yesterday's announced luxury level implies that the Hornets are under no pressure to move anyone, if they don't want that pressure. In other words, if New Orleans is indeed scared by its immediate financial outlook, they could opt to go the cheap route this summer, and still receive the league's payout (~$3 million-ish, I'd expect) to teams under the tax. Of course, this wouldn't sit well with Chris Paul; that's the reason the announced tax level doesn't necessarily affect the CP situation too much.

The Hornets have been provided the option of standing still, a choice they didn't have a week ago. But just having it doesn't make it viable. Three minimum salaried signings won't impress anyone. The Hornets still have to gamble, make FA signings, and hope that they can indeed move Songaila's contract. 

(2) That makes it sounds like nothing's changed...

It has. The Hornets now have a bigger safety net for whatever gamble they make. Or, put another way, they're free to make a bigger gamble- ie, commit more money in free agent contracts.

Darius Songaila is scheduled to make $4,818,000 this season. Julian Wright is scheduled to make $2,858,057 this year. And Peja Stojakovic is schedule to make $14,256,000. Those are essentially the Hornets' three expiring deals. (The Hornets can make Wright a qualifying offer for 2011-2012 or renounce him altogether). David West has an ETO next summer that I can certainly envision him picking up, and this is technically the last year for Marcus Thornton's deal, but neither of those contracts can really be considering "expiring" in the way Songaila's is. 

(3) So how much spending money do we have now?

The Hornets are $2,766,955 under the luxury tax. Add Songaila's contract, and that's $7,585,955. Add Julian's contract to that, and you get $10,443,012. That's enough to spend the entire midlevel, the entire biannual, and toss on a couple minimum deals. It's unclear whether New Orleans will feel safe adding that much salary due to (a) ownership issues, or (b) due to the uncertainty involved in actually moving Songaila and Wright. 

Keeping in mind that CP is closely watching their actions this summer, and with an eye towards fiscal responsibility, will the front office shy away from any sort of gamble this summer? Or will they go through with an educated roll of the dice?

We've got the money to reasonably offer, say, the full midlevel to Ronnie Brewer, the biannual to Ian Mahinmi, and bring back Aaron Gray as backup center. But do we have the guts?