Hornets pay almost ‘Steph money’ for Gordon Hayward. Analyzing the salary cap impact
The Charlotte Hornets must love Gordon Hayward, because the salary-cap ramifications of acquiring him are Stephen Curry-like.
That’s the assessment of Eric Pincus, NBA salary cap expert for Bleacher Report and Basketball Insiders websites: That when you combine an average annual salary of $30 million for Hayward with stretching the remaining $27 million of Nic Batum’s contract over three seasons, you approach the compensation of Golden State Warriors superstar Curry.
“Steph, this year, is $40 million. If you look at (salary combined with dead cap), Hayward is almost making Steph money,” Pincus said. “At least, the team’s investment is like Steph money.”
The Hornets completed their acquisition of small forward Hayward on Sunday, eight days after agreeing to terms on a 4-year, $120 million deal. The Hornets tried without success over the past week to trade the last season of Batum’s 5-year, $120 million contract, previously the largest in franchise history.
As first reported by The Observer, the Hornets committed to waiving Batum and using the NBA’s stretch provision to create sufficient cap space to sign Hayward, assuming no Batum trade materialized. Under that scenario, the remaining $27 million becomes a $9 million block of dead cap each of the next three seasons.
That is the boldest use of the stretch provision since it was added to the NBA’s collective bargaining agreement in 2011. According to ESPN’s Bobby Marks, a former Brooklyn Nets executive, the $9 million each of the next three seasons is the largest dead-cap hit among 43 waive-and-stretches all-time.
Nic Batum’s money
Waiving and stretching Batum’s final contract season doesn’t change how he is paid, only how that $27 million counts against the Hornets’ cap. While Batum fell out of the Hornets’ rotation entirely late last season, he won’t be out of the NBA long; Stadium reported he intends to sign with the Los Angeles Clippers, once he clears waivers.
The stretch provision gave the Hornets the option to spread the cap implications over three seasons (double the seasons left on the contract, plus one more). It’s been used in the past on some fairly prominent NBA players. For instance, the Nets stretched the last two seasons of Deron Williams’ contract into five $5.5 million cap hits and the Detroit Pistons stretched a portion of Josh Smith’s contract into five $5.3 million cap hits.
“If you can get a great player, absolutely,” Pincus said of teams using the stretch provision. “Gordon is a very, very good player. There are some injury questions (projecting his future productivity) that you’ll have to debate.”
The Hornets did not provide comment on the signing Sunday beyond a prepared statement by general manager Mitch Kupchak, saying the Hornets are thrilled to acquire Hayward. The Hornets and Boston Celtics arranged a sign-and-trade, allowing the Celtics to preserve a large traded-player exception. Boston will compensate the Hornets with two future second-round picks.
Hornets cap space
By stretching Batum’s salary, the Hornets are essentially borrowing cap space for this season and repaying it in the 2021-22 and ‘22-23 cap seasons. The $18 million deducted from Batum’s cap hit this season, combined with the nearly $20 million the Hornets had already below the $109 million cap, is more than enough to absorb Hayward’s salary. ESPN’s Marks reported Hayward’s contract starts at $28.5 million and ascends in cost each of the following three seasons.
That leaves cap flexibility this season for other transactions; the Hornets plan to re-sign veteran center Bismack Biyombo and still have four rookies to sign. The nearly $8 million No. 3 overall pick LaMelo Ball will make this season under the rookie scale was already factored into the $20 million in cap space.
Pincus’ cap projections still give the Hornets more than $20 million in cap space next summer, even after accounting for the dead-cap hit for Batum.
The Hornets could still explore extensions for Devonte Graham and/or Malik Monk to take them off the market before restricted free-agency next summer.
Even with the extended Batum cap hit, the Hornets could still be $23 million or more below the projected $112 million salary cap for 2021-22 after the contracts for Hayward and Ball are factored into the payroll.
This story was originally published November 30, 2020 at 7:00 AM with the headline "Hornets pay almost ‘Steph money’ for Gordon Hayward. Analyzing the salary cap impact."
