When the NBA announced its All-NBA teams Thursday afternoon, the Charlotte Hornets’ front office likely released a collective groan.
After averaging a career-best 25.6 points on 43.4 percent shooting, 5.9 assists and 4.4 rebounds, Hornets All-Star point guard Kemba Walker received his first-ever All-NBA nod, joining Russell Westbrook as a third-team guard. As a result, the Hornets will now be allowed to offer him a five-year designated-veteran extension this summer worth more than $221 million. Since other suitors can offer Walker no more than a four-year, $140.6 million contract in free agency, his supermax eligibility should give Charlotte a huge leg up in re-signing him.
But it also presents a thorny question for the small-market, cap-strapped Hornets: Can they build a title contender around Walker if he’s gobbling up 35 percent (or more) of their cap space for the next half-decade?
Therein lies the dilemma with the designated-veteran extension. Unless you already have an All-Star-laden core of talent in place, supermaxes make it prohibitively difficult to assemble a competent supporting cast.
Assuming Marvin Williams ($15 million) and Michael Kidd-Gilchrist ($13 million) pick up their respective player options, the Hornets will have roughly $98.1 million in guaranteed salaries on their books for next season. With the luxury-tax threshold projected to come in at $132 million, that leaves them with $33.9 million to spare before they go into the tax.
If the Hornets offer Walker a full supermax, he’ll have a $38.15 million salary in 2019-20, which would push them above the tax line. (Of note: They have never paid a penny of luxury tax in franchise history.)
Is Hornets owner Michael Jordan willing to pay the tax to run back a core that finished 39-43 this season? If not, he’ll have to either shed salary elsewhere or refuse to extend a full supermax offer to Walker.
The Hornets could waive and stretch Williams, Kidd-Gilchrist or Bismack Biyombo ($17 million), dividing their cap hit over the next three years. They could also seek to salary-dump one of those three, although they’d likely have to give up one of their young prospects and/or a future first-round pick to do so.
None of those options would bring the Hornets closer to championship contention, though.
Charlotte’s cap sheet is relatively clean after the 2019-20 season, which is both a blessing and a curse. While Biyombo, Williams and Kidd-Gilchrist will all come off their books then, Nicolas Batum ($27.1 million player option) and Cody Zeller ($15.4 million) will combine for $42.5 million on their own. If Walker signs a supermax, he’ll be owed $41.2 million that season, too.
That again puts the Hornets within roughly $32.3 million of the projected $116 million salary cap with those three players alone. Throw in team options for Malik Monk ($5.3 million), Miles Bridges ($3.9 million) and their No. 12 overall pick ($4.0 million), and they’ll have less than $20 million in cap space at best to round out their supporting cast.
How did the Hornets get to this point? Blame the summer of 2016.
Fresh off a 48-win season and a playoff berth, Charlotte shelled out huge contracts to Batum (five years, $120 million) and Williams (four years, $54.5 million), while Kidd-Gilchrist’s extension (four years, $52 million) kicked in as well. This past summer, the Hornets traded Dwight Howard for Timofey Mozgov (another 2016 overpay) and spare parts, and they flipped Mozgov in a three-team deal two days later for Biyombo (yet another 2016 overpay).
Unless Monk or Bridges quickly develop into an All-Star-caliber sidekick or the Hornets unearth a draft-day gem at No. 12, they have no easy way of digging out of NBA purgatory when they re-sign Walker.
This isn’t akin to those who called for the Portland Trail Blazers to blow up their core following their first-round sweep last season. At least the Blazers had repeated above-.500 seasons and playoff experience to build upon. The Hornets have one playoff appearance and one .500 campaign in the past five years.
Does that sound like a team that should be allocating at least 35 percent of its salary-cap space every season to a 6’1″ point guard who just turned 29 earlier this month?
In his end-of-season press conference, general manager Mitch Kupchak told reporters the Hornets would “do everything that we can to bring [Walker] back here.”
That was before Walker qualified for the supermax, though. As much as the Hornets may appreciate his culture-setting work ethic and community involvement, are they willing to pony up nearly a quarter-billion dollars over the next half-decade for a likely 45-win ceiling?
Even if they do, will that be enough to retain Walker?
“All I’m about is winning,” he told SB Nation’s Kristian Winfield in February. “[The money] will come. I put my work in throughout my career to become the player I am today. It’s never about the money. I want to win.”
Walker has earned an estimated $58 million over his first eight NBA seasons, so he’s about to walk into life-changing money this summer no matter where he signs. But he’ll be forced to choose between receiving an extra year and $80 million in financial security by staying in Charlotte or signing elsewhere and potentially contending in the remainder of his prime.
The Washington Wizards dodged a similar bullet with Bradley Beal missing out on an All-NBA team, which thus prevented him from becoming supermax-eligible this summer. But whereas Walker is a free agent this summer, Beal is under contract for two more seasons.
Had Beal qualified for a supermax, the Wizards likely would have felt compelled to offer it to him so they could determine their long-term course of action. If he accepted it, they’d have $80-plus million committed to him and John Wall beginning in 2021-22. If he rejected it, they’d likely begin shopping him on the trade market immediately.
The Hornets have no such luxury with Walker. If they don’t offer the full $220-plus million supermax, they run the risk of offending him and watching him walk elsewhere this summer for nothing in return. If they do and he re-signs in Charlotte, they’ll be putting an immediate ceiling on their championship upside.
There’s no easy solution to this supermax dilemma, at least until the NBA and the National Basketball Players Association begin another round of collective bargaining. There are a few ways the two sides could help ease the pain of a supermax in the next CBA, though.
As ESPN’s Tim Bontemps reported Thursday, “Some on the team side have advocated… restricting eligible players to those who win MVP, Defensive Player of the Year or make first-team All-NBA.”
That would help teams avoid “fringe” cases such as Walker or Beal, although it’s difficult to imagine the NBPA accepting this without gaining a concession from the league elsewhere.
The ultimate solution may come down to how supermaxes count against the salary cap. If players could still receive the full 35 percent salary, but only 30 percent counted against the cap (like a normal max for players with seven to nine years of experience), that may provide a happy balance between the two sides. Players wouldn’t be giving up anything with this change, and teams might be more willing to extend such contract offers without fear of devastating salary-cap consequences down the line.
In the meantime, NBA teams must continue navigating the supermax tightrope with no easy solutions. The Hornets may prove to be a test case of why the system needs to be tweaked in the next CBA.
It’s the NBA’s version of a Catch-22: If Walker takes the supermax, the Hornets will be stuck on the treadmill of mediocrity because Walker took the supermax he earned.