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The New Orleans Pelicans paid a steep price for their newfound cap flexibility. They moved down from No. 10 to No. 17 in a strong 2021 NBA Draft and gave up an extra first-round pick in the process, but it was well worth it to wipe the two worst contracts on the team off their books. With Steven Adams and Eric Bledsoe in New Orleans, the Pelicans were looking at no more than $13 million or so in cap space. After Monday's trade with the Memphis Grizzlies, they are closer to $37 million. Aside from Kawhi Leonard, they should have the spending power to sign any free agent in this class. 

They seem to have their heart set on one in particular: Toronto Raptors point guard Kyle Lowry. They'll have plenty of competition for his services. The Heat, Lakers, 76ers and Mavericks are all expected to pursue him, and it's not hard to see why. Lowry is the very definition of plug-and-play. The fact that he shoots, defends and passes at a high level makes him a fit for practically any lineup construction. He's a former NBA champion whose locker room presence would have an enormous impact on any young group looking to break through into contention. 

Other teams want to get there. The Pelicans might need to. Rumblings about Zion Williamson's unhappiness in New Orleans have persisted for months. NBA history suggests that he will sign a maximum salary contract extension when he becomes eligible next offseason, but eventually, a young superstar is going to be desperate enough to escape his first team to deny such an extension, take the one-year qualifying offer and become an unrestricted free agent after his fifth season. Everything New Orleans does for the next year will, to some extent, be geared toward ensuring that Williamson won't be that star. Lowry is a step in that direction. He is a signal to Zion that the Pelicans are serious about winning right away. 

But there's danger in winning right away, at least where Lowry is concerned. He is 35 years old. After this trade, the Pelicans don't have a single player on their roster in their 30s. By the time most of this group is ready to win championships, Lowry's window to do so might be closed. The best-case scenario for New Orleans is something resembling what happened to the young Phoenix Suns after they traded for Chris Paul

The Pelicans have seen the worst-case scenario firsthand. They tried to rush through a rebuild after drafting Anthony Davis by immediately spending money and assets on every veteran they could get their hands on. Jrue Holiday was the lone success in that endeavor. Tyreke Evans, Omer Asik, Solomon Hill and E'Twaun Moore are just some of the failures. Between 2014 and 2018, the Pelicans didn't have a single first-round pick that finished his rookie season in New Orleans. Those veterans weren't good enough to win with Davis early on. By the time Davis hit his prime, most of them were well beyond theirs. Eventually, Davis sought greener pastures. 

The hauls Davis and Holiday returned in their trades insulate the Pelicans from such an extreme outcome this time around, but similar principles apply. Signing any 35-year-old to a multi-year deal creates a significant degree of risk. So before the Pelicans commit to that path, it's worth exploring what alternatives exist for them in this post-Bledsoe and Adams world.

Where do the Pelicans stand right now?

Before we dive into specifics, let's take stock of where the Pelicans are after Monday's trade, which was included the following players and draft picks:

Pelicans receive: 

  • Jonas Valanciunas
  • No. 17 pick in 2021 draft
  • No. 51 pick in 2021 draft

Grizzlies receive:

  • Steven Adams
  • Eric Bledsoe
  • No. 10 pick in 2021 draft
  • No. 40 pick in 2021 draft
  • 2022 first-round pick via Los Angeles Lakers (top-10 protected)

The deal's primary purpose was to create cap space. With their first-round pick included, the Pelicans have 11 players under contract for next season. Nine of those 11 players have guaranteed contracts. Here's how their cap sheet looks before considering any possible free-agent additions, be they internal or external. 

Pelicans Player

Salary

Brandon Ingram

$29,467,800

Jonas Valanciunas

$14,000,000

Zion Williamson

$10,733,400

Jaxson Hayes

$5,348,280

Kira Lewis Jr.

$3,822,240

Nickeil Alexander-Walker

$3,261,480

Wes Iwundu

$1,824,003

Wenyen Gabriel*

$1,762,796

Didi Louzada*

$1,517,981

Naji Marshall

$1,517,981

No. 17 overall pick

$3,053,760

Incomplete roster charge (one)

$925,258

Projected salary cap

$112,414,200

Committed salary salary

$76,309,721

Projected cap space (with non-guaranteed players)

$35,179,221

Maximum cap space (without non-guaranteed players)

$36,609,482

*Non-guaranteed

That is a snapshot of New Orleans' finances at this moment, but there are some other numbers we need to address to get a more complete picture.

  • The Pelicans have five internal free agents to consider. Three of them are mostly irrelevant. Willy Hernangomez and James Nunnally will be available for the minimum, so their cap holds aren't important for our purposes. There is one scenario in which the Pelicans could choose to keep James Johnson's hefty cap hold on the books (which we'll get to), but if he does return, it will be at a substantially lower price. The two numbers that matter here are the cap holds for Lonzo Ball ($27,509,455, via Spotrac) and Josh Hart ($10,473,477). If the Pelicans want to get to that $36.6 million in cap space, they'd have to renounce the two of them. If they want to keep Ball, they are operating above the salary cap, so they'd have no reason to renounce Hart in the process. If they want to keep Hart, they can still renounce Ball and generate around $27 million in space.
  • The trade with Memphis will generate two trade exceptions. One will be worth $3.1 million, the difference in salary between Adams and Valanciunas. The other will be worth $18.1 million and will be generated by Memphis absorbing Bledsoe's salary into cap space (which it will create by declining its team option on Justise Winslow). The Pelicans already had a $3.9 million trade exception, thanks to their deadline trade with Dallas. All three could be used to absorb players that make up to the value of the exception, though they cannot be aggregated, and more importantly, any team using cap space must renounce its trade exceptions. Therefore, these exceptions will only be available to the Pelicans if they operate above the cap.

Now that we're through the nitty-gritty, let's delve into the three possibilities in front of New Orleans as free agency approaches.

Scenario 1: Pursue Kyle Lowry at all costs

If the Pelicans maximize their cap space, there are only four teams in the NBA that would be able to pay Lowry more than they would without resorting to a sign-and-trade. The Spurs and Thunder have more cap space than the Pelicans, but won't be interested. The Raptors have Lowry's Bird rights, but all indications to this point suggest that they will let him go. And then there are the Knicks, who have enough cap space to offer Lowry his $39.3 million max. The Heat and Mavericks won't have that much cap space barring surprising moves. The Lakers and 76ers would need a sign-and-trade to top New Orleans, and that creates hard-cap complications. 

It probably won't take that much cap space to sign Lowry. Reports at the moment suggest he is looking for something in the neighborhood of $90 million over three years. A team would only need around $29 million in space to get there, but having that extra space has some value for both sides. If the Pelicans did want to exhaust their cap space for Lowry, they could guarantee him $75 million over two years with their current cap space, and then make the third season only partially guaranteed for the remaining $15 million if $90 million is indeed the figure they'd need to reach. 

YearSalaryGuarantee

2021-22

$36,609,482

$36,609,482

2022-23

$38,439,956

$38,439,956

2023-24

$40,270,430

$14,950,562

Total

$115,319,868

$90,000,000

This approach provides a measure of protection in both directions. If Lowry doesn't age well, the Pelicans don't need to commit to paying him $30 million during the season in which he will turn 38. Lowry, in turn, guarantees himself the same amount of total money while potentially giving himself a chance to escape New Orleans after only two years if the partnership isn't working. He could then try to make more money on top of that guarantee as a 2023 free agent. The non-guaranteed portion doesn't need to be that high in the 2023-24 season. It could remain flat or even decline. The same could be true of the deal as a whole. The Pelicans don't have to front-load this contract. They have the space to give Lowry a flat $30 million for three consecutive years, or even start him higher and bring the salary down each season. 

Regardless, if the Pelicans do get into a bidding war for Lowry, there is a very good chance that they can land him, but in the process, they might have to renounce Hart and Ball. New Orleans isn't exactly hurting for young talent. Reports have even indicated that the Pelicans would prefer to start their other set of young guards, Lewis and Alexander-Walker. But giving away two starting-caliber youngsters for nothing is never easy. All that would remain of the Davis trade would be Ingram and draft picks. Williamson himself has advocated for Ball's return.

But adding Lowry would be done for Williamson's sake. The idea would be to use that addition to vault themselves into the playoffs and keep him happy. Their top four would indeed be formidable. Lowry, Williamson and Ingram have all made All-Star Games in the past two seasons. Valanciunas hasn't, but he played with Lowry in Toronto and is an easier fit with Zion than Adams was due to his slowly-developing 3-point shot. In his entire career, Adams has attempted 13 3-pointers. Valanciunas matched that in February of 2021 alone. He's a far better defensive rebounder as well, pulling in 31.9 percent of available boards on that end of the floor last season compared to 20.4 percent for Adams. Williamson is not a particularly effective defensive rebounder yet (though his transition exploits partially explain that), so upgrading there matters as well.

The roster beyond that would be fairly young and inexperienced. Alexander-Walker would presumably be the fifth starter at shooting guard. The Pelicans would have the cap room mid-level exception, starting at less than $5 million, to add another reserve. Beyond that? They'd have to trust either veterans on minimum-salary deals or youngsters like Lewis and Hayes to play key bench roles.

If New Orleans wants to try to go the Phoenix route, it should be noted that the Suns had one of the most productive benches in the NBA last season. Phoenix outscored opponents by 3.6 points per 100 possessions when Chris Paul was off the floor last season, thanks in large part to its excellent Dario Saric-at-center bench lineups. The Pelicans would have the raw talent to match that productivity, but their youth might make it hard to actually do so in practice. 

The opportunity cost of a big Lowry deal would begin to present itself next offseason. With Ingram already locked up and new deals for Williamson and Alexander-Walker set to kick in for the 2023-24 season, the summer of 2022 is the Pelicans' last easy chance at significant cap space. An extension for Ball and/or Hart would've taken that space off the table anyway, but in all likelihood, Ball would be easier to trade if necessary next offseason than Lowry would just given their respective ages. 

The advantage of having Lowry on such a big contract even as he gets older, though, is that gives the Pelicans consolidated matching salary for a possible star trade. That is especially true if the final season of his contract is only partially guaranteed, as any team trading New Orleans a star would likely love the idea of saving tens of millions of dollars in the deal. This, aside from Lowry's credentials as a future Hall of Famer, is the difference between New Orleans rushing to build a contender around Davis and what it would be doing now. The Pelicans still have all of their own future draft picks. They have picks from the Lakers and Bucks as well, plus their own young players. Lowry will make them better now, but in two years, when his value has likely dipped, the Pelicans can use him and all of the assets they didn't have during the Davis era to trade for Lowry's eventual replacement. 

The fear in planning for such a scenario is that the Pelicans aren't quite as asset-rich as some of the other teams playing that same game. Remember, they gave up a first-round pick to get Adams and another to dump him in addition to moving down seven slots. The Hayes pick doesn't look great right now. Alexander-Walker and Lewis have shown promise, but neither are surefire starters let alone stars. If the Thunder want the same player that they do in two years, the Thunder are probably going to get that player. That won't prevent the Pelicans from making a major trade, but their path to a younger replacement at Lowry's level isn't as obstacle-free as it might appear.

Still, barring an immediate age-related collapse, Lowry would make the Pelicans a better team next season. Though swapping him in for Ball would hurt New Orleans in transition, the gains in half-court offense and on defense would be well worth it in the short term. It probably wouldn't put the Pelicans in immediate contention for the championship, but provides some immediate relief to Williamson's possible unhappiness without costing them the pieces they would need to alter the roster down the line. It's not a home run, but it's a pretty solid foundation for an offseason with room for improvement in the years to come. 

Scenario 2: Pursue Kyle Lowry without sacrificing Josh Hart

The Pelicans don't have to make a firm decision on Hart right away. When a restricted free agent signs an offer sheet, their original team has a 48-hour window to match the deal. That window doesn't start until the moratorium ends, giving the Pelicans several days to settle any business with Lowry before they would need to consider renouncing Hart (or Ball for that matter). But, for the sake of this exercise, let's say the Pelicans have decided that keeping Hart is a priority and that they would not make Lowry any offer that would require renouncing him. 

That would artificially limit their offer to Lowry to just over $27 million next season. That would still allow them to pay him over $85 million on a three-year deal, but if this turns into a bidding war, that might not be enough to get him. The Over-38 rule effectively prevents them from offering a fourth year, so short of a sign-and-trade, the Pelicans might not have the space to sign Lowry if they are committed to keeping Hart. 

Of course, Lowry isn't the only high-level point guard available. If his market gets out of control, New Orleans could turn its attention to one of the point guards that last played for capped-out teams. Utah and Brooklyn both have serious luxury tax concerns. The Jazz are still likely to do everything in their power to retain Mike Conley, but the Pelicans could make them sweat with a big long-term offer, and unlike Lowry, he's too young for the Over-38 rule to apply, so a four-year offer would be possible. The Nets appear likely to move on from Spencer Dinwiddie given their star-studded backcourt, so he'd make for a gettable third choice. Heck, Dennis Schroder appears very available as well as a consolation prize, and if the Lakers hard-cap themselves through a sign-and-trade elsewhere, they won't be able to come close to what New Orleans could bid.

The Pelicans could split their cap space across multiple players. They could use it in trades. They could even sign one-year deals and punt their cap space away until next offseason, when Valanciunas will come off their books and they will have even more space to potentially throw at targets like Bradley Beal or Zach LaVine. The point here is that Lowry isn't necessarily the be-all and end-all of free agency for New Orleans. If the Pelicans want to move on from Ball, there are several other ways they can re-shape their roster. Some of them are far less risky than signing an aging Lowry but don't come with the same upside, but that doesn't appear to be their preferred path. Teams don't surrender major draft capital for cap space in order to play it safe in free agency, so expect a major push. Lowry just doesn't have to be the only target.

Scenario 3: Keep last year's core intact by operating above the cap

The magic number for the Pelicans if they want to use cap space is that $36.6 million figure we've spent this entire story discussing. If they want to operate above the cap? Plenty of other interesting possibilities open up. New Orleans would have almost $61 million in room beneath the luxury tax line to work with, and if it was willing to spend every last dime, it would have to spend another $6 million or so on top of that to reach the hard cap it'd likely trigger by taking this path. 

The Pelicans would trigger that hard cap by using the non-taxpayer mid-level exception, which should start at around $9.5 million this offseason and pay over $41 million on a four-year deal. That's enough to get another starting-caliber player. If the Pelicans are set on a point guard that could shoot, such an offer would surely be enough to land Patty Mills or Goran Dragic. If they'd prefer to spend that mid-level exception on someone at another position, they could pursue a different point guard with that $18.1 million trade exception we mentioned earlier. 

That is the crux of this approach. Rather than pursuing the most expensive players on the free-agent market, operating above the cap would allow the Pelicans to keep Ball and Hart while also adding two significant players through cap exceptions. If the Pelicans set the tax line as their artificial limit and spent the entirety of their mid-level and biggest trade exception, they'd still have over $33 million to pay Ball and Hart before hitting the tax. Depending on what sort of player they target with that trade exception, they might even be able to go above the minimum to retain James Johnson through his cap hold as well.

This isn't the sexy path. New Orleans almost certainly wouldn't be adding a singular talent like Lowry this way. But you could easily argue that, through internal improvement alone, the Pelicans already have enough in the building to make the playoffs. Remember that this is an exceedingly young roster, one that not only stands to get better through the typical age curve, but that also should benefit from the stability of a more typical NBA calendar. New Orleans has already improved at center by turning Adams into Valanciunas. We have no idea how well Willie Green will do as a head coach, but it's hard to imagine him struggling as much as Stan Van Gundy did in his lone season at the helm. 

Adding three valuable players to last year's roster probably isn't going to get it into immediate championship contention, but the Pelicans finished only two games out of the play-in round last season. Barring injuries, this route would practically make New Orleans a lock for the top 10 in the Western Conference next season, and perhaps a good deal higher. It would preserve more youth on a young team, aligning as many players as possible with Williamson so that, in theory, the entire core can reach its prime at the same time. If neither pathway is going to get the Pelicans into the championship picture right away, then you could argue that the one with more long-term potential is preferable. 

Rarely do rebuilds work out so smoothly, though. That is the argument against patience. The Pelicans have a chance to add an All-Star right now. There's no telling when such an opportunity will present itself again. There are pros and cons to each of these approaches, but ultimately, the answer New Orleans comes up with will depend on its tolerance for risk. It paid a hefty price for the chance to take that risk, so until Lowry takes himself off the table, it seems likely that the Pelicans will at least try to take that swing.