clock menu more-arrow no yes mobile

Filed under:

Greg Oden: $3 Million and the Salary Cap

The salary cap education of David Fisher.

By David Fisher
USA TODAY Sports

Reports on Tuesday around the Pelicans centered on Greg Oden being their final free agent target. Like many of you, I found the salary number being thrown around to be inaccurate. The Pelicans do not have $3 Million in cap space I yelled from the mountain top.

Well, I was wrong. Not only was I wrong, but I even reported that the Pelicans did indeed have nearly $3 Million in cap space two weeks ago. How did I fail to see what I already knew? Lack of understanding of the salary cap. Let's take a quick swing over the Bourbon Street Shots and see what Larry Coon told them in Las Vegas. Evidently everything that happens there does not stay there.

Skip this if you don’t care about the Cap stuff. Special thanks to the one and only Larry Coon for contributing to the following section. Anything correct is Larry’s; anything wrong is Jason’s.

As it turns out, NBA teams are not constrained by space or time in making deals happen. They are constrained only by money, the CBA, creativity, and the willingness of the parties involved. While the team appears over the cap, and appeared so when they signed Greg Stiemsma to a contract that looks suspiciously Room Mid-Level Exception. In fact, it appeared as if the Pelicans had consumed the Room Mid-Level Exception.

This, however, is not the case.

NBA teams have the ability to arrange their transactions in any consistent and CBA-legal order.

Applied here, it seems the Pelicans can consider the Tyreke Evans trade to have occurred after any free agent signings this offseason, should it prove advantageous. In this case, it does. Because the Evans trade brought back so much more money than was sent out, it eats up the much available cap room if it occurs just after the Holiday trade (which has to occur using space because of the unbalanced salary) in transaction order. By sliding it until later, other moves can be considered to happen with Harris, Lopez, and Vasquez on the books instead of Evans.

How does this help? Remember that I told you on July 4th that the Pelicans had nearly $3 Million in cap space? They still do! Time and space are not constraints, only money and creativity. We can prove this because the Holiday trade was made official after the Evans trade, despite the fact that order is not legal. Holiday must be traded into cap space as the trade is uneven. After the fact Demps can "order" the moves this off-season in any many he would like to create the greatest possible advantage. To Microsoft Excel!

[Edit: Adjusted the salary cap to the actual $58.679M rather than the estimated $58.5M used initially. -Fish]

Age 2013-2014 2014-2015 2015-2016 2016-2017
Eric Gordon 25 $14,283,844 $14,898,958 $15,514,031
Jrue Holiday 23 $9,213,484 $9,904,495 $10,595,507 $11,286,518
Ryan Anderson 25 $8,308,500 $8,491,500 $8,500,000
Anthony Davis 20 $5,375,760 $5,607,240 $7,070,730
Robin Lopez 25 $5,119,761 $5,340,229
Al-Farouq Aminu 22 $3,749,602
Jason Smith 27 $2,500,000
Austin Rivers 21 $2,339,040 $2,439,840 $3,110,796
Greivis Vasquez 26 $2,150,188
Terrel Harris 26 $884,293
Brian Roberts 28 $788,872
Darius Miller 23 $788,872
Total 24.3 $55,502,216 $46,682,262 $44,791,064 $11,286,518
Salary Cap $58,679,000
LESS Cap Number $55,502,216
Cap Space $3,176,784
Room Exception $2,652,000 $2,771,340

There it is. An offer "close to $3 Million". Right in front of our nose.

The "official" order would be as follows.

  • Renounce Xavier Henry, Lou Amundson, Roger Mason Jr., waive Lance Thomas - This creates the cap space necessary to trade Holiday into space with an uneven trade.
  • Trade for Jrue Holiday - This move must be done into cap space.
  • Sign Al-Farouq Aminu - The team cannot renounce Aminu and then sign him later with anything but cap space. Since his deal is already agreed to, the $3,749,602 (the amount of his declined team option, reported in the media as $3.7M) will utilize cap space.
  • Sign Greg Oden - All remaining cap space is utilized in this transaction. Depending on the exact amount of Aminu's deal determines what cap space is left.
  • Trade for Tyreke Evans - That trade is an even trade. The salaries exchanged are within 150%+$100k. It can occur even if it results in the Pelicans being above the salary cap.
  • Sign Greg Stiemsma - He was signed using the room level mid exception. That exception can be used to exceed the cap.
  • Sign Anthony Morrow - He was signed to the veteran minimum. There is an exception allowing teams to fill out their roster with minimum contracts. It is the only way the Knicks and Nets will be able to have 13 players on their roster, for instance

The Pelicans still have $3 Million in cap space. They can use it this summer to bring in Greg Oden (if he agrees) or another player. At some undetermined point in the future New Orleans will lose the ability to use that space. I do not know when that point is, I would assume there is still a decent amount of time remaining. Maybe time runs out when training camp starts or when the first pre-season or regular season game is played. We should probably ask Larry Coon the particulars on when that flexibility is exhausted.

The key point here is that the Pelicans do have the ability to offer Oden around $3 Million. They can release either Brian Roberts or Darius Miller to add an additional $298,692 (their $788,872 minus a $490,180 cap hold) to make the offer competitive with what Miami can offer to exceed through mini mid-level exception. That amount is $3,183,000. As seen here. The Pelicans will be operating on a level playing field in terms of the money available. Ultimately, if Oden signs here it will be because he picked New Orleans over Miami, San Antonio, and Dallas.

More From The Bird Writes