Rick Bonnell of the Charlotte Observer tweeted the news that Pacer fans have been dreading early Wednesday morning: Lance Stephenson will no longer be a Pacer.
The Charlotte Hornets will sign Lance Stephenson to a 3-year contract, the last season a team option, the Observer has learned.
— Rick Bonnell (@rick_bonnell) July 16, 2014
Under terms of the deal Stephenson will make $9 million next season and in 2015-16, with a slight raise in the 2016-17 team option.
— Rick Bonnell (@rick_bonnell) July 16, 2014
The $9 million Charlotte offers for next season is roughly $1.3 million more than Stephenson stood to make in the first year of the reported five-year, $44-million offer. The full deal will pay Lance about $3 million more over its three years than the Pacer offer.
We’ve documented the struggle facing Indiana in their efforts to re-sign for most of the past year. As expected, the biggest obstacle to re-signing Lance proved to be the luxury tax and the limited amount of money the Pacers could offer at the start of the contract. The starting salary of Charlotte’s offer is about a half million dollars higher than we identified in June as the practical peak the Pacers could offer as a starting salary.
In a league where billions of dollars are paid to players, a few million dollars can feel like a very small amount to interested third parties. However, it remains a lot of money in real terms – and to the situations of both Lance Stephenson and the Pacers.
For the player, the $3-million difference over the next three years is almost equal to what he was paid in the first four years of his career. Stephenson’s rookie contract paid him just over $3.4 million over its length. Last season, Lance was paid just over $1 million to start all 116 of the regular season and playoff games he played in for the Pacers. Contrast that with Evan Turner, who was paid more than twice that (over $2.2 million) for the 39 games (regular season and playoffs) he took the floor for Indiana.
For the team, the $1.3-million first year difference meant that Indiana would have had to find a way to reduce their payroll by almost $6-and-a-half million to get back under the tax. Further, even spending up to the tax threshold of $76.829 million would have represented a $7-million increase in their payroll from last season.
Further complicating matters is the conundrum that is Lance Stephenson. This is a player who has made massive improvements over the last two years. He is extremely talented and exciting and plays with unquestioned effort – at both ends of the floor. Yet those things get obscured by what has come to be described as “Lance’s antics.”
And these “antics” – real or perceived – have apparently cost Lance millions of dollars on this contract. The reported three-year deal with the Hornets will pay him less than 60% of Gordon Hayward and Chandler Parsons will take home during that time. Further, the third year is purportedly a team option for Charlotte, while Hayward’s is guaranteed (he has a four-year deal) and Parsons has a player option.
The Pacers have been accused of low-balling Stephenson, and in the context of the Hayward and Parsons deals, that looks true. However, that market was simply not there for Lance. Several teams had no interest in him at all, and even Charlotte waited out all of their other options, before making a deal very much on their terms. The Pacers tried to trade commitment – five years – for money, and they didn’t succeed.
Now, the Pacers must move forward. They currently have 14 players under contract and are about
$3.5 million correction: $2.5 million under the tax threshold. They are out of exceptions with which to sign free agents above the minimum contract. Standing pat – at least for now – is certainly a possibility. However, C.J. Miles is now #1 on their depth chart at shooting guard, so there may be moves to come.
Indiana stands about
$3.5 million below the luxury tax threshold, correction: $2.5 million and they have two trade exceptions they could use to wrangle a low-level sign-and-trade to fill that gap. Luis Scola’s partially unguaranteed deal could also be an attractive trading chip that could potentially bring back a player making roughly $7 million.
Also, I believe the Pacers could try to turn Lance’s signing into a sign-and-trade in hopes of bringing back Gerald Henderson, who had been a Bird target a few years ago. However, there’s no indication Charlotte would be interested in any such deal.
Regardless, the work now begins for Larry Bird and his brain trust.
Tags: Lance Stephenson