Early Offseason Talks (details on FA rights)

[Guest]

Forgot to mention this the other day on this medium, but in case you can't sleep or really want to know about the Hawks in the upcoming offseason then feel free to discuss after reading this:

http://www.peachtreehoops.com/2014/12/15/7384609/nba-trade-rumors-atlanta-hawks

Why are Paul Millsap, DeMarre Carroll, and Pero Antić valuable to the Hawks this offseason?

It was not an accident that Danny Ferry signed Pero Antić, DeMarre Carroll, and Paul Millsap to 2-year contracts in 2013 (note to self: update this article for Kent Bazemore next year). The particular length of these deals might signal to some that the Hawks are preparing to clear lots of cap space for the 2015 offseason. This is likely true and can be seen in the table below. However, it is also the case that these three contracts prove to be uniquely valuable to the Hawks for the 2015 offseason.

Let me explain.

Player	2014--15	2015--16	2016--17	2017--18	Total
Al Horford	$12,000,000	$12,000,000	$18,000,000	---	$24,000,000
Paul Millsap	$9,500,000	$12,350,000	---	---	$9,500,000
Jeff Teague	$8,000,000	$8,000,000	$8,000,000	$12,000,000	$24,000,000
Kyle Korver	$6,253,521	$5,746,479	$5,239,437	$9,954,931	$17,239,437
Thabo Sefolosha	$4,150,000	$4,000,000	$3,850,000	$7,315,000	$12,000,000
Mike Scott	$3,333,333	$3,333,333	$3,333,334NG	$6,333,335	$10,000,000
DeMarre Carroll	$2,442,455	$3,175,192	---	---	$2,442,455
Shelvin Mack	$2,433,333	$2,433,333	$2,433,334NG	$4,623,335	$7,300,000
Kent Bazemore	$2,000,000	$2,000,000	$2,600,000	---	$4,000,000
Elton Brand	$2,000,000	$3,800,000	---	---	$2,000,000
Adreian Payne	$1,855,320	$1,938,840	$2,022,240TO	$3,100,094TO	$8,916,494
Dennis Schröder	$1,690,680	$1,763,400TO	$2,708,582TO	$6,771,455	$6,162,662
John Jenkins	$1,312,920	$2,228,025	---	---	$3,540,945
Pero Antić	$1,250,000	$1,625,000	---	---	$1,250,000
John Salmons	$1,000,000	---	---	---	$1,000,000
Mike Muscala	$816,48250%G	$947,276NG	$1,015,696NG,TO	$1,929,823	$2,779,454
Gustavo Ayón	$2,850,000	$2,850,000	---	---	---
Total (Guaranteed)	$59,629,803	$37,513,145	$17,089,437	$0	$114,232,385
Total (All inclusive)	$60,038,044	$42,162,661	$28,602,623	$3,100,094	$133,903,422
Total w/ Cap Holds	$62,888,044	$68,190,878	$75,230,840	$98,656,190	---
Salary Cap Projections	$63,065,000	$66,500,000	$70,158,000	$74,017,000	---
Notes: TO-Team Option, NG-Nonguaranteed, 50%G-50% guaranteed; red denotes cap hold. Projections are not official.

(Contract data from ShamSports.com and BasketballInsiders.com)

In the NBA, teams are entitled to certain rights over players in contract negotiations. Most casual NBA fans have heard of Bird Rights which allow a team to exceed the cap to resign their own free agent for up to their maximum salary. This is the Holy Grail of exceptions. But neither DeMarre, Paul, or Pero will be afforded this right. Instead, all three of them will have Early Bird Rights this upcoming offseason and this actually makes each of them more valuable than if they had Bird Rights.

Early Bird Rights

You see, every free agent for a team has a corresponding cap hold. It closes a loophole in the Collective Bargaining Agreement (CBA). The actual amount for the cap hold depends on the status of the free agent. For Paul, this means that the Hawks can resign him in excess of the cap for up to $16,625,000. For both DeMarre and Pero, this means the Hawks can resign them in excess of the cap for roughly $5,885,440. Technically, it is for up to 104.5% of the average salary in 2014--15 season, but the current projection is what we shall go with.

Take a moment to look at the amounts that Early Bird Rights allow the Hawks to exceed the cap for each of these players. Then take a glance at their capholds above.

The difference between these two values gives us $4,275,000 for Paul, $2,710,248 for DeMarre, and $4,260,440 for Pero. This is the difference for which each player counts towards a caphold in the offseason and for the maximum amount that Early Bird Rights allow the Hawks to exceed the cap to sign each player. The Hawks could sign these players to higher values by using cap space instead, but that is the case for any free agent. These exceptions hold special value because the Hawks can add on salary in excess of the Salary Cap.

I am not saying that each player will be signed for their respective Early Bird exception values, but each of these values represent a wedge between what the cap states and what the Hawks can sign for. This is the important point.

The 2015 Offseason

The Salary Cap is currently projected to be around $67 million. I use this number because it is round. I do not want to mislead anyone with decimal places and the official projection at the moment ($66.5 million) is not likely to be the actual value. Right now, the Hawks are projected to be right around the salary cap for the 2015 offseason.

If the Hawks stand pat, then the only exceptions available to them for 2015 are the respective exceptions associated with their free agents and some variant of the Mid Level Exception (most likely the Non-Taxpayer MLE which is for $5,464,000). Because the cap holds for Gustavo Ayón, Elton Brand, and John Jenkins seem to be excessive for their potential values to the team, it is unlikely that the Hawks will be capped out. The Hawks are likely to renounce the aforementioned player's cap holds in order to create cap space.

Renouncing Ayón, Brand, and Jenkins clears $8,878,025 from the Hawks cap holds. This puts the Hawks at $59,312,853 heading into the 2015 offseason and under the cap by ~$7.7 million. This implies the Hawks will have cap space to sign a free agent from another team, even if we account for 1st round draft pick the Hawks will have! Right now that draft pick is slotted to be #15 and carries a caphold of $1,600,200.

It is safe to assume, at the moment, that the Hawks will have cap space for the 2015 offseason.

The Value

Now, the timing is crucial but if the Hawks plan to resign DeMarre, Paul, or Pero to a value in excess of their cap holds, the Hawks have a bit of a bonus here. They can go into free agency and sign free agents up to their cap space. Then they can turn to DeMarre, Paul, and Pero to resign them in excess of the cap.

If DeMarre, Paul, or Pero were Bird free agents, then this would not be possible because their capholds would be much larger. DeMarre's would be $7,937,980. Paul's would be $19,000,000. And Pero's would be $3,125,000. These would all but guarantee the Hawks would not have cap space if they planned to resign these players with their Bird rights.

So as it turns out, having these three players as the lesser of the free agent exceptions turns out to be a positive thing. This demonstrates the Hawks had a long-term plan in place as early as 2013 if not sooner.

Analysis

The value of having these three free agents as Early Bird free agents is not necessarily a game changer. It is not some unseen loophole that Danny Ferry was able to figure out from shrewd analysis of the CBA. Every front office knows about this strategy. But at the same time, these contracts were clearly part of some carefully thought out plan to leverage the 2015 offseason in the Hawks favor. And this benefit can only happen if the Hawks resign one of these three players.

I'm not saying the Hawks should resign them. I'm not saying they shouldn't. I'm not saying they will. And I'm not saying they won't. I am saying that, from a Salary Cap perspective, these three players are more valuable to the Hawks in a well thought out long term plan than not.

[TheFuzz]

Cool. I'm not sure if we'll be able to sweep in and find a real game-changer in that price range (~$6-7M), but who knows. I'm more worried about whether or not we'll be able to resign Millsap, he's the stud we need to hold on to.

[Guest]

Cool. I'm not sure if we'll be able to sweep in and find a real game-changer in that price range (~$6-7M), but who knows. I'm more worried about whether or not we'll be able to resign Millsap, he's the stud we need to hold on to.

I'd expect the Salary Cap to rise by more than what the current projection is. I don't want to get people's hopes up, but I wouldn't be surprised if the cap approached $70m. That would swing towards having around $10m in cap space.

Definitely not a game-changer at this point, but if the Hawks move a few pieces then that changes the possibilities.

[TheFuzz]

I'd expect the Salary Cap to rise by more than what the current projection is. I don't want to get people's hopes up, but I wouldn't be surprised if the cap approached $70m. That would swing towards having around $10m in cap space.

Definitely not a game-changer at this point, but if the Hawks move a few pieces then that changes the possibilities.

 

I'm no cap guru, but $10M is much more like it. Either way though, the more cap the better, plus we'll have like 10-12 players already under contract. If we exercise those Early Bird exceptions, then I assume they count towards the minimum players caphold rule thingy?

[Guest]

I'm no cap guru, but $10M is much more like it. Either way though, the more cap the better, plus we'll have like 10-12 players already under contract. If we exercise those Early Bird exceptions, then I assume they count towards the minimum players caphold rule thingy?

The minimum players caphold rule thingy only applies when the team has fewer than 12 players/capholds applied to our cap. We won't be in danger of that so we can ignore the incomplete roster charge as it is technically called.

If we exercise the EB rights, then that means we've signed those guys. Simply holding onto the rights and not signing them are what we're likely to do until we sign FAs up to the cap. So the sequence of events will matter.

[MaceCase]

I can't take this thread seriously without a mention of Almnesty.

[Jdawgflow]

So If we traded Mack and Scott or Thabo and renounced pero we would be looking at 17+ million to use for a big free agent signing

[Guest]

So If we traded Mack and Scott or Thabo and renounced pero we would be looking at 17+ million to use for a big free agent signing

Most likely.

[Guest]

Some bonus information that might be helpful:

Next offseason, Millsap will have played 9 years in the league. That puts his max at 30% of the Cap. For this Season, that would be worth $17,695,200. But clearly, this amount is going to increase.

As of right now, the official projection for the 2015 Cap to rise by approximately 5.5% (from $63.065m to $66.5m). With that percentage, you can adjust the Max for Millsap to be roughly $18.7m. If the Cap increases by more, then so will Millsap's Max and so will the difference between the EB exception's starting salary and Millsap's Max.

It's a bit of a double-edged sword for the Hawks. They want the Cap to rise so they can have more Cap Space. But as the Cap increases, so does the amount that Millsap may leave on the table. If you really think that some team is going to offer Millsap a Max, then this could be bad news. But I've got a hunch that Millsap won't be offered the Max by someone since he couldn't garner an 8-figure offer two years ago. And I'd be willing to bet that Millsap is probably OK with the EB exception.

So all in all, I'd venture the guess that Millsap comes back to the Hawks via EB rights after the Hawks make use of their Cap Space.

[Jdawgflow]

Is there a list of potential FA that might fit in this 10-18 million budget? That would be fun to consider. I, like many here, would love to add to our team rather than replace them.

[Guest]

Is there a list of potential FA that might fit in this 10-18 million budget? That would be fun to consider. I, like many here, would love to add to our team rather than replace them.

http://www.basketballinsiders.com/nba-salaries/nba-free-agents-2015-2016/

I'm not one to be interested in hypothetical situations or discuss particular free agents and whatnot. I like to stick to factual things that we can consider as opposed to conjecture. But by all means, use the list above to pin-point particular free agents. It is the natural progression of what I have been talking about...

[Jdawgflow]

These are guys I am possibly interested in

Sf

Jimmy butler or

Kawhi leonard

C

Mozgov

Marc gasol

Jordan hill

Deandre Jordan

Roy hibbert

Robin Lopez

Enes canter

Tyson chandler

Al jefferson

[hazer]

Kawhi Leonard (can Bud nab him twice?)

Marc Gasol (Hawks drafted wrong brother)

 

Good LAWD can you imagine:

 

Teague

Korver

Leonard

Sap

Horf

 

or

 

Teague

Korver

Sap

Horf

Gasol

[IheartVolt]

Kawhi is the gem that Bud needs to snag up.. I drool thinking of that guy in a Hawks uni but hard imagining Pop letting that guy slip away

[Jdawgflow]

Wasn't bud instrumental in getting kawhi to the Spurs in trade initially? Putting him in carroll's spot would be awesome, especially if we resigned Millsap as hawkfanatic mentioned above is possible.

[skimaskway23]

Jimmy butler would put us over the top

[hazer]

Wasn't bud instrumental in getting kawhi to the Spurs in trade initially? Putting him in carroll's spot would be awesome, especially if we resigned Millsap as hawkfanatic mentioned above is possible.

Yes, Pop was quoted as saying that Bud was relentless in his pursuit of Leonard. That it was essentially Bud's deal and Pop put his faith in Bud's judgement on that trade. I can't find the article, and I'm paraphrasing, but Pop gave the impression that Bud's pursuit of Leonard bordered on obsession. Pretty damn good judgement. Kawhi could possibly be had if Pop and Duncan retire at the end of the season. Especially since it's Bud, making the ECFs wouldn't hurt either.

Edited December 19, 2014 by hazer

[hazer]

A frontcourt of Kawhi Leonard, Paul Milsap, and Al Horford would be downright frightening.

[GameTime]

If Kawhi wants out of SA for any reason ($, wanted a bigger role, etc.) I couldn't see anywhere else he would go.

[Afro]

I could see us looking at Kanter. 33% from 3. Good rebounder. Not the best passer. Depends on his price, but he's a very solid player.