Late last night the New Orleans Pelicans officially signed Omer Asik, Alexis Ajinca, and Dante Cunningham to new contracts. No shenanigans were involved, although an excellent dinner at Cava was certainly enjoyed. Asik will be signed with his bird rights, inherited when the Pelicans traded for him from the Houston Rockets. Ajinca, thanks to being a Pelican for two years, will be signed with his early bird rights. Cunningham will dip into the Mid-Level Exception (MLE) for his three year, $9 million contract.
The MLE is a salary cap exception that allows New Orleans to exceed the cap itself. The total value of this exception is $5,464,000 in the first season with 4.5% raises for each following season. If Cunningham's contract is right about $9 million over three years it probably starts at $2,875,000 in 2015-16. Over three seasons with raises the total value is $9,013,125 and for the sake of twitter and brevity NBA reporters simply round the end figures off.
This means the Pelicans have $2,589,000 remaining of the MLE to utilize. Adding in raises over the course of four years the maximum offer New Orleans can put on the table is for just over $11 million. Is that enough to pull a player like K.J. McDaniels in restricted free agency? Interest between the Pelicans and McDaniels was reported on July 8th.
As The Dream Shake points out, the Houston Rockets must dip into their MLE in order to retain McDaniels. The plan so far is for Houston to match any offer sheet. Should the Pelicans sign McDaniels to an offer sheet the Rockets will have 72 hours to match. 72 hours is an eternity in NBA free agency, especially once players are eligible to sign contracts.
The plan now (per sources) is to match on KJ McDaniels and look at trade options, opportunities. They'll be patient. https://t.co/HS0RRjcsdX— Jonathan Feigen (@Jonathan_Feigen) July 4, 2015
It is possible that the Rockets get in a bind with Josh Smith and do not have the enough of the MLE remaining to bring back McDaniels. The Pelicans could try to wait out that process and hope the Rockets run out of options to match their offer sheet. Instead Dell Demps could get the clock ticking as soon as possible by getting McDaniels to agree to an offer sheet right away. Thirdly the Pelicans could attempt to work out a trade scenario with Houston to avoid the restricted free agency game of chicken.
Nearly $2.6 million isn't a lot these days in the NBA. Using the entire MLE, or the Bi-Annual Exception, will hard cap the Pelicans to remain below $88.7 million in salary for the entire season. Considering their current cap situation reaching that number is impossible without a significant trade. However, as Jason Calmes of Bourbon Street Shots notes, maintaining that flexibility could be important if New Orleans decided to go all-in at the trade deadline.
Personally I do not expect much in the way of fireworks for the remainder of free agency for the Pelicans. Norris Cole will likely eventually sign his qualifying offer. Luke Babbitt and/or Jeff Withey will re-sign for a minimum contract. Toney Douglas will probably get his non-guaranteed contract waived before the guarantee date. A couple new names, or summer league Pelicans, will join the team to fill out the bottom of the bench.