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Next moves for the Charlotte Hornets: How to build this young core

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A year ago, you could make the argument that there was no foundation in place with the Charlotte Hornets. All-Star Kemba Walker was off to the Boston Celtics, replaced by sixth man Terry Rozier. 2018 second-round pick Devonte' Graham was coming off a season in which he spent more time in the G League than with the parent club.

Now, a year later, Graham is one of the candidates for Most Improved, Rozier is a bona fide starter and the Hornets have a core of young players featuring Miles Bridges and PJ Washington.

Let's look ahead to the draft, free-agency and trade questions facing the Hornets this season.

Note: The financials in here are based on the salary cap and luxury tax holding at the 2019-20 levels, as expected.

MORE: Biggest trade, free agency and draft decisions for every eliminated NBA team


The patience with cap space

These circumstances are different from the last time Charlotte had cap flexibility, back in 2016. The Hornets were coming off a first-round loss to the Miami Heat then and were intent on keeping their core players -- Nicolas Batum and Marvin Williams -- on long-term contracts.

Now, they have a projected $20 million in room, but it appears they are content to sit and wait for the right opportunity to spend.

"The primary way we're going to look to build this team is through the draft and savvy trades," GM Mitch Kupchak told The Charlotte Observer after the 2020 trade deadline. "I don't anticipate us being one of those teams that is in the running for those big free agents."

Since arriving in 2017, Kupchak has drafted Graham, Bridges and Washington. He also arranged a sign-and-trade to acquire Rozier from Boston. There are two ways the Hornets can go about using cap space from here:

  • One-year contracts with an emphasis on bench depth, but in a way that doesn't impede player development

  • Use cap space to take back unwanted contracts with a draft pick attached

If the Hornets play the waiting game and allow their young players to continue their development, they could be looking at close to $80 million in cap space in 2021.


Extension options with Graham

A year ago, it would have been shocking to claim that Graham is worthy of a four-year, $50 million extension. The second-round pick was coming off a rookie season in 2018-19 in which he recorded 18 DNPs.

But after averaging a team-high 18.2 PPG with 53 starts, Graham is in contention for Most Improved Player. The point guard also ranks No. 7 among all point guards in defensive real-plus-minus. Graham still has plenty of room to improve, as evidenced by his 38.2% shooting and high turnover rate, but his play thus far has been encouraging.

There are two factors that will decide whether there is an extension in place starting on Oct. 18.

  • Do the Hornets prioritize the $10 million in cap space they would lose in 2021 by signing Graham now?

  • Does Graham feel that he can sign for a more lucrative contract next summer?

The Hornets project to have a league-high $70 million in room next offseason even if you include a Graham extension.

Yes, Graham is a restricted free agent and the Hornets have the right to match any offers. However, playing the conservative card could see the Hornets dealing with a lucrative offer sheet from another team for a salary significantly higher than the $11 million it would likely take to sign Graham immediately.


The $27 million Batum contract

Batum is entering the final year of his massive contract on a team that has switched its focus to player development. That large expiring deal leaves the Hornets with a few important questions to ask:

  • What is the value of taking back salary that stretches into 2021-22 if there is a first-round pick attached?

Charlotte could look to stock up on draft assets if the right deal comes along and the team determines it won't be a real player in free agency for the next couple of years.

  • Split the Batum contract into two players?

Instead of trying to trade the large Batum salary at the 2021 deadline, the Hornets could acquire two players on $13 million contracts now and potentially have an easier time flipping them later on.

  • Does using the stretch provision make sense?

The Hornets would create an additional $20 million in savings for the offseason, but remember what Kupchak said about building the roster through the draft and trades. There's not a lot of upside to sacrificing future cap space for a deal that's about to expire.

  • Entertain a buyout?

Once you go the buyout route with such a contract, that money just sits on your books with no real value. That's why the Thunder elected not to eat the Carmelo Anthony contract and instead traded him for Dennis Schroder.

Of course, that philosophy will change if Batum is not moved in a deal at the 2021 deadline and a buyout makes more sense financially.


Offseason cap breakdown

  • The Hornets are projected to have $20 million in room in 2020-21 based on a projected $109 million cap. If Charlotte stays under the cap, it will have the $4.8 million midlevel exception.

  • The Hornets are projected to have the room midlevel exception.

  • Taking a conservative approach with future projections leaves Charlotte with $70 million in room for the summer of 2021.

Resources available to build the roster

  • Three draft selections: one lottery and two in the second round

  • $20 million in cap space

  • $4.8 million room midlevel exception

  • Internal development of the roster

  • $5.6 million cash to send out or receive in a trade


Dates to watch

• Graham will need to wait past Oct. 24 to see his $1.66 million contract guaranteed for next season.

Caleb Martin and Jalen McDaniels have $1.5 million contracts that are non-guaranteed. Martin spent 28 games in the G League before finishing on the Hornets' active roster. His contract becomes guaranteed if he is on the roster past Nov. 1. McDaniels has followed the same path as Martin. His contract has $100,000 in protection if he's on the roster past Nov. 18. The remaining $1.4 million is non-guaranteed.

• Former second-round pick Dwayne Bacon failed to meet the starter criteria and is now eligible to receive a $2.0 million qualifying offer (instead of $3.1 million). The Hornets have until Oct. 17 to offer Bacon the one-year deal.


Restrictions

• Because the salaries of Graham, McDaniels and Martin are non-guaranteed, each contract would count as zero dollars in outgoing salary if traded.

• Batum cannot be traded until his $27.2 million player option is exercised.


Extension candidates

• Along with Graham, Batum, Malik Monk and Cody Zeller are also extension eligible, although those three are not expected to sign new deals.


The draft assets

The Hornets have three picks in the October draft, including two in the top 32.

Here's how ESPN's Jonathan Givony and Mike Schmitz have Charlotte selecting in June:

  • No. 3 (own): James Wiseman | C | Memphis

  • No. 32 (via CLE): Vernon Carey | C | Duke

  • No. 56 (via BOS): Paul Eboua | PF/C | Pesaro

The Hornets own all their future first-round picks.