Keeping Eric Gordon

Hey, look who it is! It is me. Hi.

MrWayneKeller has done a phenomenal job reviewing the seasons of the various Hornets over the past several weeks; most of the team's major contributors (using that term quite loosely) are in the books now. Starting this week, let's delve more closely into who should and shouldn't be around for the 2013 season from a financial perspective. This, via Storytellers Contracts, is the Hornets' cap situation for 2012-2013.

Player	Salary
Emeka Okafor	$13,640,000
Trevor Ariza	$7,258,960
Jarrett Jack	$5,400,000
Al-Farouq Aminu	$2,947,800
Jason Smith	$2,500,000
Xavier Henry	$2,323,200
Gustavo Ayon*	$1,500,000
Greivis Vasquez	$1,191,240
Darryl Watkins*	$854,389

The asterisked players - Ayon and Watkins - don't have guaranteed deals. Including Ayon, New Orleans has $36,761,200 committed, or about $22M less than this season's salary cap. These eight players (minus Watkins) figure to be on the roster next year, unless Tom Benson decides to splash $28M (Okafor) or $15M (Ariza) on an amnesty. It's also conceivable that one of those two or Jarrett Jack has some trade value.

The remaining candidates for retention are then:

• Eric Gordon
• Carl Landry
• Chris Kaman
• Marco Belinelli
• Various minimums - Lance Thomas, Chris Johnson, etc.

Eric Gordon

Based on draft strategy, long term outlook, and other factors, Landry, Kaman, and Belinelli could all depart (more on them as the week unfolds). EG's situation is obviously different.

Gordon wanted and didn't receive an extension offer close to the max contract he could get this summer from another team and didn't get it. I wrote at the time that this was along the lines of 4 years, $58M, but Larry Coon's revised summation of the new CBA leads me to believe that it's actually closer to 4 years, $55M* because of a difference in projected BRI for max contract calculation.

*A base $12.9M as opposed to $14.5M with 4.5% raises ($0.58M) each season

In either case, it was a prudent decision for New Orleans at the time and remains one. Gordon showed many signs of an adequate recovery from injury as the season finished, and the team is surely monitoring his progress over the offseason.

Gordon still has his original three options available - (1) sign New Orleans' one-year qualifying offer and become an unrestricted free agent next summer, (2) sign an offer sheet from another team and see if New Orleans will match it, or (3) sign a maximum offer sheet from New Orleans.

That third won't be happening, let's hope. The Hornets must submit a qualifying offer (basic or max) to Gordon by June 30th to retain his free agent rights. Option 3 means the Hornets would be submitting a qualifying offer of 5 years, $74M, almost $20M (and a full year) more than any other team could give him in restricted free agency, which opens July 1st. There are no scenarios under which I see this unfolding. Even if Gordon informs the team that he wants to become an unrestricted free agent next summer and that he'll be signing the basic qualifying offer, the Hornets could still negotiate a larger contract with Gordon than other teams could offer, but one that's smaller than the max offer sheet.

The clear next step is submitting the basic qualifying offer to Gordon before June 30th in order to retain the right of first refusal. I haven't seen it reported, but it's possible this has already been done. Gordon's agent then goes out, collects other teams' offers (Indiana easily has the space to max Gordon, even after re-signing Roy Hibbert), and the Hornets make their decision. I'm still firmly in favor of matching an offer in the 4y/55M range.

And so Gordon's future can be split into two overarching trees - "I Really, Really Don't Want to Stay" and "Meh."

"I Really, Really Don't Want to Stay*"

*Very little of what we've heard indicates this is the reality

Option 1 - Hornets decide he's worth the 5y/74M max*, Gordon decides heh, he does want to stay after all!

*keep in mind: each team only gets one of these 5 year (as opposed to 4) maxes under the current CBA. Using it on Gordon now could preclude the team from conceivably using it on a better player from the June draft.

Result: EG stays in NOLA long term

Option 2 - Hornets decide he's not worth the full max*, Gordon signs the basic one-year QO

*the Hornets could offer a smaller max that's larger than other teams' maxes but still smaller than the true max (eg, 4y/57M) because they can offer 7.5% raises per year as opposed to 4.5%. But ultimately, the big advantage comes down to the fifth year; if the Hornets are unwilling to make Gordon their 5-year max player, the difference is minimal (4y/57M vs. 4y/55M).

Result: EG plays in NOLA next season, free agent thereafter

Option 3 - Hornets decide he's worth the 5y/74M max, Gordon still doesn't want to stay*

*again, very unlikely

Result: EG plays in NOLA next season, free agent thereafter

"Meh"

(All of these operate under the assumption that the Hornets submit the basic QO to Gordon by June 30th. If they don't, Gordon becomes unrestricted this summer).

Option 4 - Another team signs Gordon to an offer sheet*, the Hornets match

*from above - the max another team can offer is 4y/55M.

Result: EG stays in NOLA long term

Option 5 - Another team signs Gordon to an offer sheet, the Hornets don't match, the offer sheet becomes a binding contract between Gordon and the other team

Result: EG leaves NOLA long term

Option 6 - Gordon doesn't sign or isn't offered any contracts by other teams, negotiates a contract independently with the Hornets*

* from above - the max the Hornets can offer for 4 or 5 years is 4y/57M or 5y/74M

Result: EG stays in NOLA long term

Option 7 - Gordon doesn't sign or isn't offered any contracts by other teams, fails to negotiate a contract independently with the Hornets

Result: EG plays in NOLA next season, free agent thereafter, or sits out the 2013 season without playing

***************

And there we are. Options 4 and 5 are most likely, with an outside shot at Option 6. Options 1-3 and 7, based on what we know now, are highly improbable.

The marginal NBA win costs about ~$2M in the current market; over his last 63 games (2010-2012), Gordon's play has been worth about 6 wins. A healthy Gordon, even one that doesn't improve past his current state, then figures to be worth about 8 wins or $16M a year. The most realistic maximum amount New Orleans needs to pay to retain Gordon this year is the max another team can offer - 4y/55M or $13.75M. That's a good deal less than what I'd estimate his "true" value at, and so everything eventually comes down to health.

How realistic is to expect ~80 game seasons from Gordon at this point? He'd need to average about 70 games a season to make up value for a 4y/55M (13.75M/yr) contract. Is 70 realistic? On the flip side of that, does the franchise have any option but to gamble on Gordon's health as it enters a radically new phase of its history? I'm not sure.

With the lottery coming up (next week!) and prospect discussion soon commencing, this will likely be the last time we seriously discuss Gordon's future until after the draft. Not much is likely to change between now and then.

But until then - would you match any offer for Gordon?