The New Orleans Pelicans have agreed to contracts with Solomon Hill, E'Twaun Moore, and Langston Galloway. However, unlike a number of teams, including the Houston Rockets yesterday who signed and introduced new additions Ryan Anderson and Eric Gordon, the Pelicans have yet to make any of their deals official. No press releases yet. Even Buddy Hield and Cheick Diallo are playing in the summer league without signed contracts.
Cheick Diallo said he also hasn't signed a rookie contract. Also plans to play tonight.— Justin Verrier (@JustinVerrier) July 8, 2016
The question many ask is why, and I'm here to go through and discover the answer.
New Orleans does not have enough cap room to do all the things they have promised to do. Strange, I know. That does not mean they lack the capacity to create the necessary room, only that they have yet to take the steps to create room. With all of the current Pelicans obligations they are currently about $1.5 million over the salary cap. Since all of their signings must be done with cap space sacrifices must be made.
The easiest route Dell Demps can take is waiving players. If the Pelicans waive both Toney Douglas (his contract of $1.3 million is not guaranteed at all) and Luke Babbitt (his contract is guaranteed for $200k) New Orleans will have enough cap space to sign all three of their free agent acquisitions with just over $860k remaining in space. The deadline to decide on both Douglas and Babbitt is Tuesday, July 12th. If you've read someone discuss that as a drop dead date the Douglas and Babbitt deadline is why. This is the easiest route for Demps to take, but also one he appears least prefer.
Frazier's qualifying offer and the remaining cap space add up to a paltry offer for the reserve point guard. Dell Demps clearly would prefer to retain Frazier, that's the whole point of the qualifying offer in the first place. The richest contract (annual value) that New Orleans could offer Frazier is the room exception; the same contract (2 years, $6 million) that James Ennis signed with the Memphis Grizzlies.
Trading away a big contract
The second option is a trade to create additional cap room, allowing the Pelicans to retain Frazier, Douglas, and Babbitt. New Orleans has six guards under contract; Jrue Holiday, Buddy Hield, Langston Galloway (pending), E'Twaun Moore (pending), Toney Douglas (non-guaranteed), and Tyreke Evans. Additionally they would like to retain Tim Frazier, or they would have rescinded his qualifying offer already as they did Jeff Withey last summer.
Seven guards is too many. Holiday is clearly a part of their long term plans if you listen to Demps or Gentry talk. Hield, Galloway, and Moore have recently be added to the roster. Douglas, the easiest target to move to make transactions easier, has not been waived. Tyreke Evans is the most likely candidate to be moved. Trading away Tyreke's $10.2 million on the salary cap makes all the remaining transactions easy, including re-signing Tim Frazier.
If the Pelicans moved Tyreke Evans and accepted no contracts back, here's a look at the salary cap.
Note: Cheick Diallo's contract is an estimate, and slightly changed from my initial estimates. New signings are my own estimates based on recent reports, not actual numbers since actual contracts have not been signed.
Not bad at all. That's 14 players under contract with space to bring in a number of competitors for the 15th roster spot during training camp and the preseason. Alternatively, Dell Demps could attempt to trade away Alexis Ajinca instead of Tyreke Evans. That results in much less space (about $3.3 million total) to sign Tim Frazier with and a problem of depth behind Anthony Davis and Omer Asik among the big men. Is Cheick Diallo ready to be a rotation player in the NBA? Probably not the best idea.
Dell Demps has until Tuesday to make things work out. If a trade hasn't been announced by then expect news on Luke Babbitt and Toney Douglas being waived. New Orleans may even have to renounce the qualifying offer to Tim Frazier in the process. The Pelicans off-season will come into full bloom in the next 72 hours. Hold on tight.