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Report: Josh Hart’s $38M contract with Pelicans just $12M guaranteed

Pelicans guard Josh Hart

NEW ORLEANS, LOUISIANA - MARCH 01: Josh Hart #3 of the New Orleans Pelicans reacts against the Utah Jazz during a game at the Smoothie King Center on March 01, 2021 in New Orleans, Louisiana. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this Photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Jonathan Bachman/Getty Images)

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Josh Hart’s three-year, $38 million contract with the Pelicans looked surprisingly large, especially considering how much cap space had dwindled throughout the NBA.

The catch: Only Hart’s $12 million salary this season is guaranteed.

Will Guillory of The Athletic:

The Pelicans are effectively paying Hart – who held a $5,236,739 qualifying offer – more this season in order to gain more team control.

Because he’s not on a one-year contract, New Orleans can trade him without his consent. The Pelicans also aren’t on the hook for any money beyond this season.

The third year is a clever way to create a de facto mutual option, which isn’t directly allowed. If Hart plays well enough to have his second-year salary guaranteed, he can choose to hit unrestricted free agency in 2023 rather than wait until 2024. But the Pelicans aren’t obligated to pay him in that third year, either.