New Orleans Pelicans

Southwest Notes: Rockets, Moore, Long, Cunningham

The Rockets enter the 2017/18 campaign with last season’s Most Valuable Player runner-up in James Harden and offseason acquisition Chris Paul, widely viewed as one of the greatest point guards ever. A deal for Carmelo Anthony has not materialized but Houston is still an improved team, David Aldridge of NBA.com writes.

Aside from the acquisition of Paul, the Rockets have been in headlines all offseason. Tilman Fertitta purchased the Rockets for $2.2 billion, Hurricane Harvey hit the city of Houston hard, and even to this point, Anthony to Houston rumors persist. Nonetheless, head coach Mike D’Antoni believes his team is in prime position for success.

“The biggest advantage is for 48 minutes we have a Hall of Fame point guard (either Harden or Paul) on the floor. That’s huge,” D’Antoni said. “And both of them can play off the ball real well, they’re both great shooters, and both can exploit the defense when the ball is kicked … whoever initiates it would normally finish it, but if they have to kick the ball over to the other guy, they’ll finish it.”

Aldridge also breaks down the team chemistry heading into the season and expectations for a team that won 55 games last season.

Below you can read additional notes around the Southwest Division:

Pelicans To Re-Sign Dante Cunningham

Free agent forward Dante Cunningham has made a decision on where he’ll play in 2017/18, according to Shams Charania of The Vertical, who reports that Cunningham has agreed to re-sign with the Pelicans.Dante Cunningham vertical

According to Charania, Cunningham will get a one-year, $2.3MM deal from New Orleans. The minimum salary for a player with Cunningham’s NBA experience is $2,106,470, so if his salary exceeds that, the Pelicans would have to use a different exception — they also wouldn’t get any help from the NBA to cover the full amount, like they would for a one-year, minimum salary deal.

Either way, Cunningham is set to return to the franchise with which he spent the last three seasons. In 2016/17, the 30-year-old forward averaged 6.6 PPG and 4.2 RPG in a rotation role for New Orleans, and also added a reliable three-point shot to his arsenal — Cunningham’s 1.1 3PG and .392 3PT% were both career highs by a wide margin.

While it looked initially like Cunningham’s improved outside shot might make him a more coveted target on the free agent market, he didn’t draw as much interest as expected. A handful of teams – including the Timberwolves, Bucks, and Raptors, per Charania – were said to be in the running for him, but his new 2017/18 salary will be worth less than the $3.1MM player option he turned down in June.

Still, the Pelicans are likely happy to get Cunningham back at a reduced rate, particularly with Solomon Hill expected to miss a significant portion of the 2017/18 season with a torn hamstring. While New Orleans has an All-NBA caliber duo up front in Anthony Davis and DeMarcus Cousins, the club doesn’t have a ton of depth at forward and could use more shooting help. Cunningham’s ability to play at both forward spots and his improved three-point shot should be valuable.

Once they finalize their reported agreements with Cunningham and Martell Webster, the Pelicans will have 19 players under contract. Cunningham’s deal would represent the club’s 14th fully guaranteed salary.

Photo courtesy of USA Today Sports Images.

NBA’s Board Of Governors To Examine Revenue Sharing System

ESPN’s Zach Lowe and Brian Windhorst have published an expansive and well-researched report on NBA teams’ finances, providing details on the league’s revenue sharing system, the impact from national and local television deals, and how a lack of net income for NBA franchises could push the league toward considering relocation or expansion.

The report is wide-ranging and detailed, so we’re going to tackle it by dividing it up into several sections, but it’s certainly worth reading in full to get a better picture of whether things stand in the NBA. Let’s dive in…

Which teams are losing money?

  • Nine teams reportedly lost money last season, even after revenue sharing. Those clubs were the Hawks, Nets, Pistons, Grizzlies, Magic, Wizards, Bucks, Cavaliers, and Spurs. The latter two teams – Cleveland and San Antonio – initially came out ahead, but paid into the league’s revenue sharing program, pushing them into the red.
  • Meanwhile, the Hornets, Kings, Pacers, Pelicans, Suns, Timberwolves, and Trail Blazers also would have lost money based on net income if not for revenue sharing, according to Lowe and Windhorst.
  • As a league, the NBA is still doing very well — the overall net income for the 30 teams combined was $530MM, per ESPN. That number also only takes into account basketball income, and doesn’t include income generated via non-basketball events for teams that own their arenas.
  • The players’ union and its economists have long been skeptical of NBA teams’ bookkeeping, alleging that clubs are using techniques to make themselves appear less profitable than they actually are, Windhorst and Lowe note. The union has the power to conduct its own audit of several teams per season, and it has begun to take advantage of that power — according to ESPN, the union audited five teams last season, and the new CBA will allow up to 10 teams to be audited going forward.

How does the gap between large and small market teams impact income?

  • Even after paying $49MM in revenue sharing, the Lakers finished the 2016/17 with a $115MM profit in terms of net income, per ESPN. That was the highest profit in the NBA, ahead of the second-place Warriors, and could be attributed in large part to the $149MM the Lakers received from their huge local media rights deals.
  • On the other end of the spectrum, the Grizzlies earned a league-low $9.4MM in local media rights, which significantly affected their bottom line — even after receiving $32MM in revenue sharing, Memphis lost money for the season. The Grizzlies will start a new TV deal this year that should help boost their revenue, but it still won’t come anywhere close to matching deals like the Lakers‘.
  • The biggest local TV deals help drive up the NBA’s salary cap, with teams like the Lakers and Knicks earning in excess of $100MM from their media agreements. According to the ESPN report, the Knicks made $10MM more on their TV deal than the six lowest-earning teams combined.
  • As one owner explained to ESPN, “National revenues drive up the cap, but local revenues are needed to keep up with player salaries. If a team can’t generate enough local revenues, they lose money.”
  • Playoff revenue from a big-market team like the Warriors also helps push up the salary cap. Sources tell Lowe and Windhorst that Golden State made about $44.3MM in net income from just nine home playoff games last season, more than doubling the playoff revenue of the next-best team (the Cavaliers at about $20MM).

How is revenue sharing affecting teams’ earnings?

  • Ten teams paid into the NBA’s revenue sharing system in 2016/17, with 15 teams receiving that money. The Sixers, Raptors, Nets, Heat, and Mavericks neither paid nor received any revenue sharing money. Four teams – the Warriors, Lakers, Bulls, and Knicks – accounted for $144MM of the total $201MM paid in revenue sharing.
  • While there’s general agreement throughout the NBA that revenue sharing is working as intended, some teams have “bristled about the current scale of monetary redistribution,” according to ESPN. “The need for revenue sharing was supposed to be for special circumstances, not permanent subsidies,” one large-market team owner said.
  • The Grizzlies, Hornets, Pacers, Bucks, and Jazz have each received at least $15MM apiece in each of the last four years via revenue sharing.
  • However, not all small-market teams receive revenue-sharing money — if a team outperforms its expectations based on market size, it forfeits its right to that money. For instance, the Thunder and Spurs have each paid into revenue sharing for the last six years.

Why might league-wide income issues lead to relocation or expansion?

  • At least one team owner has raised the idea of expansion, since an expansion fee for a new franchise could exceed $1 billion and it wouldn’t be subject to splitting 50/50 with players. A $1 billion expansion fee split 30 ways would work out to $33MM+ per team.
  • Meanwhile, larger-market teams who aren’t thrilled about their revenue-sharing fees have suggested that small-market clubs losing money every year should consider relocating to bigger markets, sources tell ESPN.
  • As Lowe and Windhorst observe, the Pistons – who lost more money than any other team last season – are undergoing a relocation of sorts, moving from the suburbs to downtown Detroit, in the hopes that the move will help boost revenue.

What are the next steps? Are changes coming?

  • The gap between the most and least profitable NBA teams is expected to be addressed at the NBA’s Board of Governors meeting next week, per Lowe and Windhorst. Team owners have scheduled a half-day review of the league’s revenue sharing system.
  • Obviously, large- and small-market teams view the issue differently. While some large-market teams have complained about the revenue sharing system, they’re outnumbered, with smaller-market teams pushing those more successful clubs to share more of their profits, according to ESPN.
  • Trail Blazers owner Paul Allen is one of the loudest voices pushing for more “robust” revenue sharing, sources tell ESPN. Some team owners have argued that the system should ensure all teams make a profit, while one even suggested every team should be guaranteed a $20MM profit. There will be “pushback” on those ideas, Lowe and Windhorst note. “This is a club where everyone knows the rules when they buy in,” one owner said.
  • On the other end of the spectrum, some teams have floated the idea of limiting the amount of revenue sharing money a team can receive if it has been taking payments for several consecutive years.
  • Any change to the revenue sharing system that is formally proposed at the NBA’s Board of Governors meeting would require a simple majority (16 votes to 14) to pass.

Dante Cunningham Decision Expected Soon

The Timberwolves should know in the next day or two whether their pursuit of free agent Dante Cunningham has been successful, tweets Jerry Zgoda of 5 Eyewitness News. A source tells him the team expects Cunningham’s decision in the “next 24-48 hours.”

An eight-year veteran, the 30-year-old forward has spent the past three seasons with the Pelicans. He appeared in 66 games last year, starting 35, and averaged 6.6 points and 4.2 rebounds in 25 minutes per night.

Cunningham has received interest from several other organizations, with the Bucks reportedly becoming the latest team to join the chase. He became a free agent in April when he opted out of a $3.1MM salary for next season.

A second-round pick by the Trail Blazers in 2009, Cunningham spent a year and a half in Portland before being traded to Charlotte. He also played for the Grizzlies and Wolves before signing with New Orleans in 2014.

With just 15 players under contract and 12 with guaranteed money, Minnesota has more flexibility than any other team heading into camp. The Wolves re-signed Shabazz Muhammad over the weekend, but are still looking for veteran help at the wing to improve their bench.

Details On Jrue Holiday's Incentives

  • Jrue Holiday‘s potential likely and unlikely incentives for 2017/18 on his new contract with the Pelicans total $4.7MM. Playing in 66 games and totaling at least 2,075 minutes this season would result in an extra $510K bonus for Holiday, for instance.
  • As Marks notes, unlikely incentives don’t count against a team’s cap hit right now, but they’re considered when taking into account a club’s hard cap. For instance, the Pelicans have $5.4MM in total unlikely bonuses, which reduces their room below the hard cap from about $9.25MM to just $3.85MM.

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Pelicans Reach Deal With Martell Webster

Martell Webster has agreed to a non-guaranteed training camp contract with the Pelicans, tweets Brett Martel of The Associated Press.

The 30-year-old small forward hasn’t played in the NBA since being waived by the Wizards in November of 2015 following surgery on his right hip to fix the labrum and damaged cartilage. The injury was feared to be career ending, but the Pelicans believe he has recovered enough to earn another shot.

The sixth player taken in the 2005 draft, Webster played for Portland, Minnesota and Washington in a 10-year career. His best season came in 2012/13 when he started 62 games for the Wizards and averaged 11.4 points per night.

The agreement with Webster was part of a busy weekend for the Pelicans, who reached a similar deal with Perry Jones and signed veteran free agent Tony Allen.

Darius Miller Could Start At Three

With a vacancy in their starting lineup, the Pelicans could look to trot out Darius Miller in their first five, Will Guillory of The Times-Picayune writes. Miller was acquired after seasoning his game abroad over the last two seasons.

Pelicans Sign Tony Allen To One-Year Deal

SEPTEMBER 15: The Pelicans have officially signed Allen, announcing their deal today in a press release.

SEPTEMBER 11: The Pelicans are finalizing a one-year contract with veteran swingman Tony Allen, Shams Charania of The Vertical tweets.

Barring a late breakdown in negotiations, this ends a prolonged free agent odyssey for the 35-year-old defensive stalwart. Early in the process, the Clippers were reportedly interested in working out a sign-and-trade deal for Allen until their roster got overloaded with newcomers. The Timberwolves were also interested, as Tim MacMahon of ESPN.com reported.

It was apparent that the Grizzlies were moving on from Allen when one of the free agents they signed, shooting guard Ben McLemore, broke his foot and they still didn’t show any serious interest in Allen.

New Orleans needed another small forward after Solomon Hill suffered a torn hamstring, an injury that is expected to sideline him for most of the upcoming season.

Allen has only played for two teams in his NBA career. He spent his first six seasons with the Celtics before joining Memphis for the 2010/11 season. He was a rotation player for the Grizzlies over the past seven seasons and started 66 games for them last year. Overall, he appeared in 71 games and averaged 9.1 PPG, 5.5 RPG and 1.6 SPG in 27.0 MPG. He’s a career 28% shooter from long range, which has made him an increasing offensive liability in a league that has become heavily reliant on 3-point shooting.

Allen should still see quite a bit of action at both small forward and shooting guard, where Jrue Holiday is expected to start with the addition of point guard Rajon Rondo. With the offensive firepower provided by Holiday, Anthony Davis and DeMarcus Cousins, the Pelicans can afford to have a defensive specialist at the wing spot.

As for the terms of Allen’s one-year deal, those haven’t yet been reported, but the Pelicans still have their bi-annual exception ($3.29MM) available and have a bit more breathing room below the luxury tax line after trading Quincy Pondexter earlier this month.

Pelicans Had Interest In Anthony Morrow

Perry Jones Signs Camp Deal With Pelicans

SEPTEMBER 14: Jones’ deal with the Pelicans has been finalized, per RealGM’s official log of NBA transactions.

SEPTEMBER 11: Forward Perry Jones has agreed to a training camp deal with the Pelicans, league sources told Adrian Wojnarowski of ESPN (Twitter link).

Jones, 25, has not appeared in an NBA game since the 2014/15 season. The Thunder used a late 2012 first-round selection on him and he remained on their roster for three seasons. He played 143 games for Oklahoma City, averaging 3.4 PPG and 1.8 RPG in 14.7 MPG.

He played in Russia and the G-League last season. He appeared in 24 games with the Iowa Energy, posting averages of 6.9 PPG, 3.0 RPG and 1.8 APG in 21.8 MPG while shooting just 31.3% from the field.

Jones faces an uphill battle in making the roster, even though forward Solomon Hill could miss most of the season with a hamstring tear. The Pelicans are reportedly finalizing a contract with veteran swingman Tony Allen.

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