A deep look at Pelicans’ cap situation and how Anthony Davis factors in

The New Orleans Pelicans’ future rosters will be built using the assets and cap space created this off-season.

So let’s go through the options, looking at several scenarios. For this exercise, we will use the NBA salary cap numbers Shams Charania reported will be used for next season. The cap will be set at $109 million, with a luxury tax kicking in at $132 million. The following season, the cap will be around $118 million with a luxury tax line at $143 million. 

In just the basic numbers, the Pelicans can find a positive manipulation. The luxury tax threshold jumps $11 million dollars in a year, roughly. Zion will never cost less than he does this season. If reports that Benson is not scared of the luxury tax are true, the Pelicans could front-load a contract so as to be above the tax line this year, but below it the next. This helps avoid the repeater tax, allowing for even more roster investment going into Years 3-6 of the Zion era.

But let’s not get too bogged down in details. Going into the 2019-20 NBA season league year, which begins July 1, the New Orleans Pelicans have only four players on fully guaranteed contracts. All numbers used come from the Pelicans page on spotrac.com. 

1. Anthony Davis – $27,093,019
2. Jrue Holiday – $26,996,111 after incentives
3. Solomon Hill – $12,758,851
4. E’Twaun Moore – $8,664,928

New Orleans has $75,512,909 committed towards a $109 million salary cap. Jahlil Okafor was signed on a minimum deal, and the team holds an option worth $1,702,486. Okafor showed enough potential to be worth 1.4% of the Pelicans cap sheet. For these purposes, let’s assume New Orleans exercises that option in every scenario. The Pelicans have an extra asset, and a cap number of $77,215,395.

One tough to call variable is Julius Randle’s player option, worth $9,073,050. A case could be made for Randle to risk it on the open market, as he could find more money and years. However, should he misjudge his market, he could suffer a Nerlens Noel-type fate and end up making less money.

Randle will wait as long as possible (June 29) to make a decision on his option. Staying in New Orleans behind Davis and Zion would mean limited minutes. If Davis were traded, Randle could be a starter. A good year ending with a playoff appearance would mean a big payday. A mediocre year with average numbers on both ends of the court and his market is likely still the same.

If Randle opts in, the Pelicans’ guaranteed contract salary cap number would be $86,288,445. The Pelicans pros and cons are about equal for whatever choice Randle makes. He is young, and would be on an expiring contract, possibly increasing his trade value. He is also a defensive liability who may not like a reduced role in a contract year, no matter the Pelicans’ long term plans.

If Randle and Davis both elect to stay in New Orleans, that is not a bad Core Six to support Zion’s rookie year. Adding Zion’s rookie contract of approximately $10,000,000 brings the Pelicans’ cap number up to $96,288,445. 

New Orleans’ decisions start getting tougher from this point forward. Welcoming an enthusiastic Randle and drafting Zion are relatively easy decisions. Deciding on the four non-guaranteed contract players begins the true test.

Christian Wood, Frank Jackson, Kenrich Williams, and Dairis Bertans all got some extended run to end this past season. Wood (24), Jackson (21), and Williams (24) will all be welcome back for this exercise. All three come cheap and will help lower the team’s cap and roster spot holds, allowing for more freedom to make moves. Bertans (30) is not a great roster fit going forward for several reasons.

Jackson will earn  $1,618,520, Williams’ cap number is $1,443,842, and Wood’s is at $1,645,357. 

The New Orleans Pelicans now have ten players on the working roster at a cost of $100,996,164, if all cap and roster holds are renounced. The Pelicans will likely move on from Ian Clark ($1,618,486), Darius Miller ($2,866,500) and Troy Williams ($1,443,842). 

Trevon Bluiett ($1,442,842) and Stanley Johnson ($11,821,206) are the biggest unknowns. Johnson is 23, coming off a rookie contract. He has value in the NBA, but not $12 worth for this Pelicans roster. Bluiett is 24 and a known commodity. In most scenarios, his time is given to other developmental prospects.

The only two players with holds that deserve quick negotiations are Elfrid Payton ($3,600,000) and Cheick Diallo ($1,931,189). New Orleans has holds for two unused roster spots, totaling $1,794,316. Asumming Diallo and Payton return on similar salaries, the Pelicans cap number is now $106,527,353 without roster holds.

The working assumption is the New Orleans Pelicans will fill those two roster spots with minimum or 2-way contracts, negating their effect on the cap. New Orleans also has a $3.6 million trade exception from the Nikola Mirotic to Milwaukee transaction.

The Pelicans’ total roster cost, holds and all, presently eclipses $122 million. The good news is the holds will not count against the Pelicans as they try to move forward, as they are over the $109 million limit. New Orleans could stand pat, using only minimum contracts to supplement any bi-annual, mid-level, or trade exception additions.

Would that be enough to appease Anthony Davis? Could the New Orleans Pelicans work out more space?

Renouncing all but Payton and Diallo brings the Pelicans under the salary cap, but limits them even more. Tax payer exceptions would no longer apply, for example. However,  if Randle opts out, the Pelicans have that additional ~$9 million to spend.

According to Basketball Reference, New Orleans has a 2019 cap number of just over $90 million committed, once Bertans is renounced. Sportrac has the Pelicans’ Active Salary Cap at $92 million, with a practical cap space number of $16,587,054 by using the Mirotic trade exception. Using the Basketball Reference numbers, the Pelicans could have closer to $19 million in space.

Effectively, the New Orleans Pelicans can spend $16 million on a difference maker, and fill out the roster with minimum contracts. Would adding any of the players making around $16 million this season lead the playoffs? Tobias Harris is on that list, but is also likely getting a raise this summer.

If Griffin and Langdon cannot find a difference maker to take slightly less than their market value, they’ll have to create a bit more salary cap space. They only real option to do so, is to make a trade.