Reggie Jackson Trade: Ripple Effect on Charlotte's Free Agency

The Hornets now project to have less spending power in free agency

Dec 23, 2023; Charlotte, North Carolina, USA; Denver Nuggets guard Reggie Jackson (7) in a timeout during the second half against the Charlotte Hornets at the Spectrum Center. Mandatory Credit: Sam Sharpe-USA TODAY Sports / Sam Sharpe-USA TODAY Sports

During the second round of the 2024 draft the Charlotte Hornets agreed to a trade, they took on Reggie Jackson's 1-year $5.25M contract in exchange for three 2nd round picks. The Hornets sent nothing to Denver in return, which under the old CBA was against the rules, but that has now changed.

Under the new CBA, teams are able to absorb player contracts into their bi-annual ($4.6) or room ($7.6)/non-tax payer ($12.5) mid-level exception. The latter exception changes in amount depending on if a team have cap space team or not, which for Charlotte is tied to Bridges' future. As Jackson's salary is larger than the bi-annual, it will have to be absorbed into the mid-level exception. This is how the Hornets plan to execute the Jackson trade.

Put simply, if Miles Bridges re-signs, the Hornets will only have $7.25 million of the non-tax payer MLE left to sign free agents. The idea of adding free agents like DeAnthony Melton or Naji Marshall, who will likely garner the full $12.5 million MLE would be gone. In this scenario, it wouldn't surprise me to see Charlotte bypass adding any notable free agents altogether.

If Bridges leaves, then Charlotte would have access to the room exception, but that would shrink down to $2.3 million after absorbing Jackson's contract. This wouldn't matter, as the Hornets would open up between $25-30 million in cap space they could use to sign free agents instead.

There is a small chance the Hornets could look to fold the Jackson trade into a larger deal, which would then change things again. However the scenario plays out, the trade can't be completed until the new league year which starts next week.So, don't expect any official announcement or comments from the team until then.