The Indiana Pacers must find a way to replace Lance Stephenson midway through the offseason. Stephenson has agreed to a three-year, $27.5 million contract with the Charlotte Hornets. The third season is a team option.
As my RealGM colleague Shams Charania reported, Stephenson met with Michael Jordan and other team officials in Las Vegas on Tuesday night when the offer was presented. The Pacers offered Stephenson a five-year, $44 million deal shortly after free agency opened on July 1, but the two sides were not on the same page as time progressed. The Detroit Pistons, Milwaukee Bucks, Los Angeles Lakers, Chicago Bulls and Dallas Mavericks all had varying degrees of interest in Stephenson as well.
Stephenson’s agent, Al Ebanks, told Candace Buckner of the Indianapolis Star that his client was seeking a short-term deal, which explains why he wasn’t quick to take more guaranteed money from the Pacers with an additional two years of security. Stephenson will make $1.5 million more in Charlotte this coming season than he would have under the reported Indiana offer. The total value of the Pacers’ offer was $16.5 million greater.
Four years after Larry Bird gambled on Stephenson in the second round of the 2010 NBA Draft, Stephenson is gambling on himself. Even if the Hornets exercise the third-year option on his contract, Stephenson will be an unrestricted free agent once again at just 26 years old.
Grade for Stephenson: B-
There are two reasons why Stephenson is taking a calculated risk. There will be a larger offensive role for Stephenson in Charlotte, which could increase his value down the line. In addition, the NBA’s current television rights agreement ends after the 2015-16 season. Reports have indicated that the league will look to double the current fee, which would have a huge impact on future salary cap numbers and contract figures.
With that said, Stephenson is taking a chance. If he doesn’t continue to develop, which most expect him to do on a young, emerging team, he may not earn back the money he left on the table over the 2017-18 and 2018-19 seasons (the back end of the initial Indiana offer). He also loses some the shine that comes from playing for a contender, which the Pacers may no longer be without him.
Ebanks stressed Stephenson’s desire for a shorter term deal than the Pacers offered, but the elephant in the room is the fact that he didn’t get that much more money. The average annual value of the Charlotte deal is just $300,000 greater than he have earned with Indiana. That leaves us to decide whether Stephenson was left hanging when the market died up and the Pacers moved on, or he truly valued hitting the market again in three years over waiting until his late 20s.
The Pacers will undoubtedly miss Stephenson, who provided much of their edge during the 2014 postseason, but it seems plausible that one of two things happened during negotiations. They pulled $44M offer off the table when Stephenson hesitated, or they offered him a five-year deal knowing full well that he wasn’t going to sign a contract of that length. Either way, Bird made a decision on how he valued Lance and didn’t budge.
I reached out to both sides asking if Indiana’s initial offer was still on the table up until the Hornets agreement, but both declined to comment.
Grade for Pacers: D+
Indiana deserves some credit for standing firm with their offer, especially in team’s NBA, but this loss cannot be looked at solely in a vacuum.
The Miami Heat took a step back with the loss of LeBron James, opening up the short-term window for the Pacers to contend. When LeBron left for the Cleveland Cavaliers, who will need some seasoning before reaching an elite level, Bird and Co. should have seen it as an opportunity to finally get back to the NBA Finals. The Eastern Conference is no longer top-heavy, but with Stephenson re-signed the Pacers would have been the favorite among a number of possible contenders -- including Miami, Cleveland, Chicago, Washington and Toronto.
Chemistry will often be mentioned as a positive for the Pacers with Stephenson gone, but that’s overstated. He may have cost himself a few million with his antics against the Heat in the Eastern Conference Finals, but Indiana will severely miss his offensive tools and competitive nature.
The Pacers had the best defense in the NBA in 2013-14, but they scored just 104.1 points per 100 possessions, which ranked 23rd. Stephenson was often the only player on the roster capable of jumpstarting Frank Vogel’s offense when it stalled. He is volatile, and at times selfish, but can be a creative and willing passer. He led the Pacers in assists this past season.
Indiana needed help on the offensive end, even after signing C.J. Miles and Damjan Rudez earlier this month, and the loss of Stephenson compounds the issue. Bird will almost certainly have to address the need via trade, unless the club is able to shed salary in a deal and sign a free agent outright. The market isn’t exactly flush with options at this point and if a cash-saving trade was easy, one might have already been made to free up space for a larger Stephenson offer or to target someone that is already signed.
Rodney Stuckey and O.J. Mayo have been mentioned in the past and present as options. Stuckey is a free agent, while Mayo would have to be acquired from the Bucks via trade.
Adding Stephenson looks like an odd move for the Hornets on the surface, but considering the current state of the Eastern Conference it helps their chances of making the playoffs for the second-straight season. Charlotte has Gerald Henderson and Gary Neal at shooting guard, which may mean a trade is forthcoming.
Signing Stephenson for roughly $9 million annually is good value, even if it carries risk as he becomes the second option on a good team after being the fourth option on a very good team.
Grade for Hornets: B
Kemba Walker, who will be a restricted free agent next summer, stands to lose the most. Stephenson is at his best with the ball in his hands, which will reduce opportunities for the third-year guard. Stephenson was Plan B for the Hornets, who signed Gordon Hayward to a four-year, $63 million offer sheet and then watched the Utah Jazz match it over the weekend. If the Jazz let Hayward go to the Hornets, Stephenson might have been forced to re-sign with the Pacers.
Like the Pacers, the Bobcats tend to struggle offensively. That means more latitude for Stephenson, but how will he handle himself without as much veteran leadership, fewer meaningful games and suddenly flush with cash remains to be seen.