Building a true contender around Anthony Davis has been the New Orleans Pelicans’ goal since he was drafted in 2012, but it took until his sixth season to finally advance past the first round. Their first Western Conference Semifinals appearance since 2008, the Pelicans were perhaps the biggest surprise of this year’s playoffs with their 4-0 victory over the favored Portland Trail Blazers. Just a few months ago, it was widely thought that Davis might try to force his way out this season before he becomes a free agent in 2020, but instead there’s more optimism than ever around the organization that they’ve got the beginnings of a consistent high-end playoff contender around Davis and Jrue Holiday.
The third member of a prospective Big 3 is still up in the air going into the offseason, though the favorite has to be incumbent center DeMarcus Cousins, who spent the past year and a half with New Orleans but is still recovering from an Achilles tendon tear suffered in late January. To make matters more complicated, the Pelicans went on their late-season and playoff run without Cousins, who has had the idea that his teams might be better off without him follow him around his entire career. He’ll be an unrestricted free agent this summer and though it seemed like a given that he would re-sign with the Pelicans for the full max, his ill-timed injury could throw a wrench in those plans. The understanding around the league at this point is that if the Pelicans come with the full max, he’d sign it, but should they? That will be the big question in New Orleans this summer and only they know how well he’s recovering from his injury and what, if any, discount he’d take to remain with the Pelicans.
Financially, locking themselves into Cousins would likely push them into the tax for at least the next two years, a venture unfamiliar to the Pelicans since the NBA instituted luxury tax penalties in 2002-03—the year that doubled as the team’s first in New Orleans after relocating from Charlotte. Like George Shinn before him, Tom Benson was previously unwilling to go into the tax for a Pelicans team that routinely ranks near the bottom in attendance and local TV ratings. Despite the acquisition of Cousins and playoff expectations, New Orleans ranked 25th in attendance in 2017-18 and hasn’t beaten the NBA average since 2007-08. Now under the ownership of his wife Gayle after Benson’s death in March, the Pelicans are one of the NBA’s up-and-coming contenders and Benson, general manager Dell Demps, and head coach Alvin Gentry have said all the right things publicly about a potential luxury tax bill, should Cousins re-sign.
$22.6 million separates the Pelicans from the 2018-19 projected luxury tax line of $123 million at the beginning of the offseason, but that number can quickly change in one direction or the other based on their upcoming transactions. They have four non-guaranteed contracts this offseason that add up to another $7.5 million, which could lessen or even eliminate their 2019 tax burden, if they were to cut all four guys in favor of Cousins and saving cash. At the very least, I expect that Emeka Okafor and Darius Miller will not be retained, which puts another $4.6 million between them and the tax. Adding $30.3 million for Cousins’ max contract would nudge them just over the tax, to say nothing of potentially re-signing Rajon Rondo, who bounced back from a poor regular season in Chicago in 2016-17 and recaptured his finishing around the basket, even if he’s still a total non-shooter and thus commands the ball be in his hands the majority of the time he’s on the court.
Some reports out of New Orleans speculate that Demps may go in a different direction altogether, eschewing the opportunity to re-sign Cousins in favor of cap space and some future flexibility. Given the fact that Davis is just two years from the end of his contract (he holds an option for 2020-21, but nobody expects him to pick it up), any free agent signings would have to be absolute home runs for a New Orleans’ front office that hasn’t always excelled in that area. After a taste of playoff success, perhaps the Pelicans are more attractive to outside free agents, but replacing Cousins and plugging other holes with cap space that doesn’t even add up to the mid-level exception makes no sense cap-wise. Getting to significant space wouldn’t just require renouncing their four free agents and cutting their four non-guaranteed contracts, but would also need a trade of another significant rotation player, whether it’s E’Twaun Moore or Solomon Hill. Moore had a fantastic season for the Pelicans and fits around a potential Holiday/Davis/Cousins core perfectly as a low-usage, high-efficiency shooter who can be a secondary perimeter defender behind Holiday. The theory of what Hill brings to the table is more potent than his actual production after a hamstring injury zapped his 2017-18 season almost completely. He did return for a handful of regular season games and their playoff run, but was clearly still hampered and was unable to make much of a positive impact. Long story short, the Pelicans COULD move on from about half their roster to get to $20 million in cap space, but unless Cousins decides to leave on his own, actively going that route would be inadvisable.
Assuming Cousins is back in the fold at a number near the max, whether it’s for the long-term or short-term, the Pelicans will have to brace themselves for at least a couple of luxury tax years. They’ve never been in that position in the past, but this also looks to be the best team of the team’s era in New Orleans and with Gayle Benson giving every indication that she’s willing to spend to compete, the old days of cutting costs at every turn might be over in the Big Easy.
30 Teams in 30 Days takes you through every team’s thinking heading into the offseason, from evaluating their own personnel to dealing with their cap situation. This is the sixth installment, covering the New Orleans Pelicans. You can find New Orleans’ full cap sheet here.