HawksFanatic's Guide to the Hawks Salary Cap 2014

[Admin]

Our own @hawksfanatic has put together some great articles over at Peachtree Hoops to prime us the off-season.  Click on the links at the bottom of each article here for all the discussion over there and to get any updates he might post. 

 

Hawks' salary cap situation heading into the offseason

Mark Deeks is an amazing human being. I say this because all of the following data on salaries have been blatantly lifted from his website ShamSports.com. Seriously, I cannot give him or his website enough praise.
 

Moving forward with an analysis of the offseason, one component that we know for certain is the contract status of all the player's related to the Hawks (i.e. those under contract, our Free Agents, and our draft picks). This will not change when current Basketball Related Income (BRI) is updated and the Salary Cap becomes official. So let's take a look.

Committed Salaries (10 players, 8 guaranteed contracts):

• Al Horford $12,000,000
• Paul Millsap $9,500,000
• Jeff Teague $8,000,000
• Kyle Korver $6,253,521
• Lou Williams $5,450,000
• DeMarre Carroll $2,442,455
• Dennis Schröder $1,690,680
• John Jenkins $1,312,920
• Pero Antić $1,250,000 (non-guaranteed, guaranteed if not waived before July 15, 2014)
• Mike Muscala $816,482 (50% guaranteed, the full guarantee occurs if not waived before January 10th)

Total Committed: $48,716,058.
 

It is tempting to say that the Hawks could have ($63,200,000 - $48,716,058 =) $14,483,942 in Cap Space. This is not right for a couple of reasons. For one, this does not account for the unsigned 1st round draft picks of the Atlanta Hawks. This amount also ignores Cap Holds for the Hawks' current Free Agents. And even if we wanted to get silly and assume that the Hawks renounce the rights to all said before, we would still need to account for Cap Holds associated with minimum roster size.
 

For each unfilled roster spot below 12, a team is charged the rookie minimum salary ($507,336 for next season). Keeping all players listed above on the team (10), the Hawks could have $13,469,270 in Cap Space given the current projections for BRI. This is not likely to ever occur because draft picks are valuable as well as the rights' to Free Agents.

Let's run down the other information we know right now.

Draft Picks (2 Cap Holds):

While we do not know who the Hawks will draft this season, we do know that they are selecting 15th in this draft. In order to retain the rights to the draft picks, the Hawks will have a Cap Hold for both Lucas and the #15 draft pick at their rookie scale contract. This means we need to account for these values when discussing the Hawks Cap Space:

• 2014 NBA Draft #15 of $1,546,100
• Lucas Noguiera (drafted #16) of $1,468,900

While these are the Cap Holds associated with the draft picks, they will have some leeway in their starting salary. Lucas and the #15 can sign a contract between 80 to 120% of their rookie scale. Last year, Dennis Schröder signed for 100% of his rookie scale for the first year, and then 120% of his rookie scale for subsequent years. There is an added twist of paying a buyout, but that does not affect the Salary Cap so we will omit that discussion in this article.
 

If Atlanta was to renounce all Free Agents but keep their draft picks, then the Hawks would have $51,731,058 in Team Salary (the draft picks act as a placeholder for the incomplete roster charge). This would be approximately $11,468,942 in Cap Space. You can be the judge if this is enough to entice a player to sign with Atlanta.

Let's not forget about our Free Agents though.

Free Agents (5):

In order to close a loophole in the Collective Bargaining Agreement (CBA), all Free Agents have a Cap Hold that is defined by their previous contracts. We will elaborate on this with the next article, so for right now we ask you take our word on Cap Hold values.
 

The NBA has two different types of Free Agents: Restricted and Unrestricted. The latter is the norm, the former is a unique situation.  A Free Agent can be a Restricted Free Agent (RFA) if their previous team tenders a Qualifying Offer (QO) to said Free Agent.
 

The Hawks players eligible for a Qualifying Offer are: Gustavo Ayón, Shelvin Mack, and Mike Scott. Provided that the Hawks make an offer (they did not with Ivan Johnson last Summer), then that could change their Cap Hold. Currently, the Free Agent Cap Holds for the Hawks are as follows:

• Elton Brand $4,800,000 (120% of previous $4,000,000 Salary)
• Gustavo Ayón $2,850,000 $1,950,000 (190% 120% of previous $1,500,000 Salary)
  • RFA with QO of $1,875,000, this does not change his Cap Hold
• Shelvin Mack $915,243 (previously a minimum salaried player)
  • RFA with a QO of $1,148,163 which is greater than Cap Hold, so if QO offered this will replace
• Mike Scott $915,243 (previously a minimum salaried player)
  • RFA with a QO of $1,115,243 which is greater than Cap Hold, so if QO offered this will replace
• Cartier Martin $915,243 (previously a minimum salaried player)

Once accounting for all of these Cap Holds, the Hawks have between $61,226,787 and$61,659,707 in Team Salary to start the offseason. This depends on if the Hawks make Qualifying Offers, but one can do some simple math to figure out scenarios when the Hawks do not make Qualifying Offers.
 

This also implies that the Hawks will not actually have any Cap Space as they would prefer to retain a Mid-Level Exception, which would push them over the Cap.

 

• Edit (4:33 PM ET May 20, 2014): Incorrect Cap Hold calculated for Gustavo Ayón
• Edit (12:24 PM ET May 23, 2014): Updated for Mike Muscala.
• Edit (4:09 PM ET June 21, 2014): Updated for typo in 2014 #15 Draft Pick Cap Hold.

​Keep updated on this article here - http://www.peachtreehoops.com/2014/5/8/5688226/atlanta-hawks-salary-cap-2014-offseason

 

Salary Cap Exceptions and Moves Available to the Atlanta Hawks

Continuing with the overview of the Hawks options for this offseason, we will move into looking at a few scenarios the Hawks can pursue this offseason and any implications that arise from them.

As of right now, the Hawks will have between $61,226,787 and $61,659,707 in Team Salary to start the offseason (detailed in this previous article). This assumes that no Free Agents are renounced. The range is because we do not know if Danny Ferry will extend Qualifying Offers to Shelvin Mack and/or Mike Scott. With a projected Salary Cap set at $63.2 million (to be updated around the July Moratorium), it would look like the Hawks have Cap Space. This is not the case.
 

Last article, I mentioned that Cap Holds refer to free agent amounts, unsigned draft picks, and incomplete roster charges. This is correct and I only mentioned those because that article dealt with the Hawks' free agents. However, there are a few Salary Cap Exceptions that also carry Cap Holds. These include the Non-Taxpayer and Taxpayer Mid-Level Exceptions as well as the Bi-Annual Exception. A Disabled Player Exception and Traded Player Exception would also have Cap Holds, but the Hawks do not currently possess these, so we will ignore this for the time being.



(Loosely taken from Larry Coon's cbafaq.com)
 

Current Scenario

At this moment, the Hawks are projected to have the Bi-Annual Exception (BAE) and Non-Taxpayer Mid-Level Exception (NTMLE) because they are currently below the Apron ($4 million above the Luxury Tax Threshold, both to be determined in July). As you can see from the table above, these will add on $7.382 million in Cap Holds and push the Hawks over the Salary Cap if they do not renounce any free agents. This does not mean the Hawks can sign someone to a contract starting at $7.382 million as exceptions cannot be combined. Pretty much all exceptions in the CBA can be split up, so the Hawks would be able to spread out their NTMLE over multiple contracts so long as they do not exceed $5.305 million in starting salary (Disabled Player and Veteran Minimum Exceptions are the ones that cannot be split).
 

If the Hawks choose to use the NTMLE, then they will be hardcapped at the Apron. Under no circumstances can the Hawks exceed this amount during the 2014-15 Season. This sounds harsher than its effects would likely be. Under the Atlanta Spirit, the Hawks have always been conscious of their spending. So spending $4 million more than the Luxury Tax does not seem like an option for the Hawks at this moment from a business perspective but also from a Salary Cap perspective. Simply put, the Hawks are so far from this threshold that there would need to be major trades in the work for this to be a concern.
 

If the Hawks choose to use the BAE, they will be hardcapped at the Apron just like with the NTMLE. Everything in the preceding paragraph applies to the Hawks if they use the BAE with one addition: the Hawks would be barred from using the BAE in the 2015-16 Season. Hence, the name of "Bi-Annual" implies this is available once every two years. This Exception does not alternate years as Bi-Annual would imply, so it may be more appropriately named the "Can Only Be Used In Non-Consecutive Seasons" Exception.
 

Likely Scenario

Although the Hawks at this moment will have the NTMLE and BAE available, a more likely scenario is that the Hawks move far enough under the Salary Cap that it makes sense for them to renounce the NTMLE and BAE in favor of more Cap Space. Renouncing these will leave the Hawks waiting until the 2015 offseason to potentially use those exceptions again. The advantage to the Hawks of renouncing these is that they can offer a contract that starts at a higher salary than the $5.305 million that the NTMLE is limited to, assuming the cap space is greater than $5.305 million.
 

If the Hawks move far enough under the Salary Cap, then the only exception available to them would be the Room Mid-Level Exception (RMLE). Unlike the NTMLE or BAE, the RMLE does not carry a Cap Hold. This may seem strange, but the Collective Bargaining Agreement (CBA) is a complex legal doctrine that defines its own terms within itself. The lawyers drafting the CBA decided to write in that the RMLE will not carry a Cap Hold and so, it does not.

The RMLE will only be available to the Hawks if:

1. they have not used the NTML or BAE; and
2. they had Cap Space at some point in time this offseason.

In addition, it becomes available to the Hawks when they would like to sign a contract that takes them above the Salary Cap. This cannot be combined with Cap Space, so the RMLE only allows for a contract that starts at a maximum of $2.732 million and for up to 2 years.
 

The Hawks have never used this exception, but it was widely thought last season Demarre Carroll was signed with the RMLE. In fact, he was not signed via that exception even though his contract fits in identically with the maximum value that the RMLE allowed for last year.
 

Unlikely Scenario

If the Hawks are somehow able to pull off enough trades and move above the Apron (without ever having Cap Space), then they would be in a position where they would be left with only the Taxpayer Mid-Level Exception. This is the only scenario that the TMLE could be used, and this implies that the Hawks:

1. never renounced the TMLE;
2. did not use either the RMLE, NTMLE, or BAE; and
3. did not receive a player in a sign-and-trade transaction.

The use of the TMLE implies that the Hawks are above the Apron. Because of the Apron, this would imply that the Hawks cannot receive a player in a sign-and-trade transaction. Using the TMLE is not actually the mechanism that causes this restriction, but you cannot use the TMLE without being over the Apron. One common misconception about being over the Apron is that a team cannot sign-and-trade away a player. This is not actually the case, the restriction only applies to a team receiving a player via sign-and-trade if they are above the Apron.
 

Sign-And-Trades

The mechanism from which sign-and-trade transactions occur from is the Traded Player Exception. This implies that if the Hawks want to receive a player in a sign-and-trade, then they:

• need to either have Cap Space to acquire the player; or
• need to send back enough salary via the Traded Player Exception.

This exception depends on how much salary the Hawks are trading away and if they are a above the Luxury Tax:



(Again, loosely from Larry Coon's cbafaq.com)
 

For the Hawks, trading away a player in a sign-and-trade transaction does not require the Hawks to take back any salary or place any restrictions on the team. Although the Hawks are not required to take back any salary, for practical purposes this is not likely to ever happen. The typical reason for a sign-and-trade transaction is because a team cannot outright sign a Free Agent because they do not have the requisite Cap Space or Exception. Because of this, the team engaging in acquiring a player in a sign-and-trade need to send away enough salary to fit in the above Traded Player Exception.
 

Now if the Hawks go down the path of acquiring a player via sign-and-trade, then they will have the added restriction of being hardcapped for the 2014-15 Season at the Apron.

http://www.peachtreehoops.com/2014/6/8/5774268/salary-cap-exceptions-and-moves-available-to-the-hawks

[Guest]

Hey, I don't do this stuff for free! {/sarcasm}

Well that isn't really true. But while it is free to read and post on this board, it isn't costless. Behind the scenes, *someone* has to pay for this stuff and it certainly is not from advertisers. So if you have read this far and benefited in some way from the 'Squawk, then throw a few bones towards the site (under @Dolfan23's signature).

[sturt]

So, one thing I'm gleaning... it's not pronounced "hocks-fin-attic"... it's "hocks-fin-antique"... sorta like Pero, correct? I accepted the Tony DOOR-sit change to Tony Door-SET so I think I'll be fine with this, too. ;)

[coachx]

The 2 annual editions I look forward to every year are:

1. Lyndsy's annual Southeastern College Football projections.

2. Hawksfanatic's salary cap break down for our Atlanta Hawks.

[DrReality]

5 mil for Lou Will. Ship him out

[coachx]

Summary to be sure my pee brain comprehends:

 

If Atlanta was to renounce all Free Agents but keep their draft picks, then the Hawks would have $51,731,058 in Team Salary (the draft picks act as a placeholder for the incomplete roster charge). This would be approximately $11,468,942 in Cap Space. You can be the judge if this is enough to entice a player to sign with Atlanta.

Let's not forget about our Free Agents though.

 

$11,468,942 Cap space if we renounce all of our free agents.

+ $915,243 cap hold for Scott to keep his FA rights to match other teams offers.

+ $915,243 cap hold for Mack to keep his FA right to match other teams offers.

- $4,800,000 renounce Brand losing his cap hold

-  $915,243 renounce Martin losing his cap hold

-  $915,243 renounce Ayón losing his cap hold

 

= $6,668,942 of projected salary cap space (projected b/c the actual salary cap will not be known until July)

Then we can renounce our rights to the NTMLE or BAE exception to gain another $5,305,000 under the cap.

 

$6,668,942 + 5,305,000 = $11,973.942 of possible cap room but we must subtract $507,336 for 1 empty roster spot.

= $11,466,606 of possible cap space

 

We could also waive Antić for about $1 mill of additional cap room.

 

Ok @hawksfanatic ..............tell me what I'm missing please.

Edited June 27, 2014 by Dolfan23

[Guest]

Well, in the article referencing $51,731,058 in Team Salary, I did not discuss exceptions. So that Team Salary does not include the exceptions in there. It is only Team Salary coming from the players under contract (which is 10 plus the two draft picks). I think when you added the NTMLE and BAE you get to a number similar to our cap space, but I think that is by luck. I'm also not sure why you are adding/subtracting cap holds to the hypothetical cap space, so maybe that is a bit of cause for confusion?

 

Waiving Pero would take away $1,250,000 in Team Salary but you're right to note the added roster charge. So waiving Pero gives us $742,664 (=$1,250,000 - $507,336) in Cap Space.