Atlanta Hawks have options as trade deadline approaches

[Guest]

Oh yeah, this should help clear up any ideas you have for the Hawks deadline. The link is also here: http://www.peachtreehoops.com/2015/2/16/5898521/atlanta-hawks-salary-cap-trade-deadline

After the surprising move of trading Adreian Payne to the Timberwolves for a future draft pick, the Atlanta Hawks gained both roster flexibility and financial flexibility. I'm here to expand on the financial flexibility that the Hawks gained and the types of cap gymnastics that the Hawks have available to them. In a nutshell, we can note that the Hawks could have $4,882,276 in cap space if they renounce their right's to Gustavo Ayón and this could have profound effects with the proper moves.

First, we need to update the current state of the cap for the Hawks as it relates to the current season:

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
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)	$57,774,483	$37,513,145	$17,089,437	$0	$112,377,065
Total (All inclusive)	$58,182,724	$42,451,846	$26,580,383	$0	$127,214,953
Total w/ Cap Holds	$61,032,724	$68,480,063	---	---	---
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)

Well this information is handy and we can see where the $4,882,276 number comes from the difference between the Salary Cap and the Total (All Inclusive) for this season. So from here, I will outline three types of moves that the Hawks would be able to make now that they have a roster spot open and even more cap space.

Sign a Free Agent

This is the most straightforward of all moves that the Hawks can make. They can sign any free agent for a deal that starts at $4,982,276 or less (the extra $100,000 is not a typo). This amount of money is a huge bargaining chip for the Hawks to attract a current free agent or any players who could potentially be bought out before February 26th at 5:00 p.m. ET. According to Basketball Insiders, only Philadelphia, Orlando, and Milwaukee can offer free agents a higher starting salary at the moment.

Who might the Hawks target? I am unsure, so I will not speculate. Feel free to use the comments below for that.

Acquire (trade for) a Player Using Cap Space

In the event that the Hawks do not want to trade any of their players on the current roster, they would be able to trade a future draft pick in order to acquire a player with a salary of up to $4,982,276 (again, not a typo). If the Hawks want to acquire a player that has a salary larger than this amount, then they would need to send out enough salary so that after the trade the Total Team Salary is no more than the Salary Cap plus $100,000 ($63,165,000). The important point here is that the Hawks are free to do this without the use of any Salary Cap Exception.

To illustrate this with John Jenkins, whose salary is $1,312,920, this means that the Hawks would be able to acquire a player whose salary is no more than $6,295,196.  This is because the Total Team Salary would still be below the Salary Cap in this scenario.

If the Hawks have an ending Total Team Salary in excess of $63,165,000, then they will need to have an Exception. For the Hawks, they have the Traded Player Exception to use, however the Hawks are in a precarious position where use of the Traded Player Exception is limited. This is because of the mathematics hidden behind the Traded Player Exception and the Hawks currently being under the Salary Cap. As a (not so) short refresher per Larry Coon:

84. How do simultaneous trades work? How much salary can a team take back in a simultaneous trade?

A simultaneous trade takes place all at once. The amount of salary a team can take back in a simultaneous trade depends on the outgoing salary and whether the team is a taxpayer. They always use the post-trade team salary when looking at whether a team is a taxpayer, so a team under the tax level would be considered a taxpayer if the trade takes them over the tax level.

For non-taxpaying teams (again, they must be under the tax level

after

the trade), the salaries that can be acquired depend on the total salaries the team is trading away:

Non-Taxpaying Teams

Outgoing salary	Maximum incoming salary
$0 to $9.8 million	150% of the outgoing salary, plus $100,000
$9.8 million to $19.6 million	The outgoing salary plus $5 million
$19.6 million and up	125% of the outgoing salary, plus $100,000

Taxpaying teams can take back up to 125% of their outgoing salaries, plus $100,000, no matter how much salary the team is sending away. For example, a taxpaying team trading away $10 million in salaries can acquire one or more replacement players making up to $12.6 million.

Taxpaying Teams

Outgoing salary	Maximum incoming salary
Any	125% of the outgoing salary, plus $100,000

I shortened the full answer from the FAQ, so click the link above if you want to get the full details.

The practical implication is that the Hawks would only be able to benefit from this exception if the Hawks trade away at least $9,764,552 in salary¹ , which implies the Hawks bring back $14,746,828 in salary. And even then, the benefits to trading away this much in salary and using the Traded Player Exception is marginal.

The Hawks are better off getting creative in their transactions if they wish to acquire a player who earns more than their current cap space.

Creative Flexibility (cool cap tricks)

Back in December I put an article together that indicated the NBA Trade Season began on December 15th. Well, I also mentioned that December 19th was a deadline of sorts. This was because if a player is acquired using the Traded Player Exception, then the NBA team must wait two months before they could aggregate that player's salary in a trade. The NBA trade deadline is February 19th, which is why that date was so important.

As I mentioned in my previous article, this two month waiting period is only valid if:

1. An NBA team wants to aggregate a traded player with another player in order to bring back more salary than they send out.
2. Said player was acquired with the Traded Player Exception.

This second point is crucial for the Hawks because the Adreian Payne trade allows the Hawks the ability to bring back more salary in a potential trade.

So long as the Hawks acquire a player without the use of the Traded Player Exception, they are free to re-trade that player at any point and aggregate that salary with another player on the roster. Depending on how much the Hawks send out in salary, this could be seen as a roughly $5 million bump above the Salary Cap. Which means the Hawks could slyly make two trades that bumps their team's salary up almost $10 million. Potentially more depending on particular players they trade away.

To illustrate with a hypothetical that I have mentioned before, the Hawks could trade away John Jenkins ($1,312,920) in order to bring in a player making up to $6,295,196. The Hawks could then make a subsequent move of packaging the player they just acquired with Shelvin Mack ($2,433,333) to acquire a player making up to $14,092,794. Before the Adreian Payne trade, the most the Hawks could have brought in under this particular hypothetical was around $10.2 million.

I am not suggesting the Hawks make such a trade, but I am presenting how the Hawks gained flexibility with the Adreian Payne trade. Heck, the Hawks do not even need to trade away any of their current players in order to see large gains. The Hawks could send away a conditional 2nd round draft pick for a player making $4,982,276. That player could be shipped out, without any other Hawk so as to not hurt anyone's feelings, in return for a player making up to $7,573,414.

The Hawks trade has increased the potential moves that the Hawks could make. Whether make, or should make, any of these potential moves is a different story.

---

^{1. For those curious as to the number, the Traded Player Exception implies that if a team sends out $X, then they can receive (1.5)*$X + $100,000. Because the Hawks already have Cap Space, then the Hawks would only use the Traded Player Exception if: [(1.5)*$X + $100,000] - $X > $4,982,276 where the $4,982,276 comes from the Hawks being able to acquire a player without the use of an exception. Churning through some algebra, you can see that the point where this inequality is positive would be where $x = $9,764,552. Or in other words, the Hawks would only be rational in using the Traded Player Exception if they trade out more than that in Salary. ↩}

[Jdawgflow]

How does the atom cap hold work? If we "cut" him we would have his 2.85mil added to our cap flexibility? Are we paying him right now? It appears only be a cap hold. Not sure the specifics of his contract. Ty

[DrReality]

I need a Cliff Notes  version of it. 

[Jdawgflow]

Ayón cap hold I meant

[DJlaysitup]

Interesting read...no wonder teams have "capologists".

[Jdawgflow]

So if we did renounce that almost adds 3mil any day we want it? That could be very useful

[sturt]

I get the creative flexibility theory. Of course, historically there's been a few teams in any given season that have had the same circumstance in that way... just curious if you recall any teams who ever did as you demonstrate the Hawks could do to add a significant piece (?).

[rd79]

Hey @Dolfan23, why is it that when I take html code from Peachtree and try to put it into these threads they always come out...well poorly formatted? I thought html was consistent across platforms?

I don't know it for this case but most websites today are formatted by CSS.

At least you should fix relative paths to external CSS files in your HTML and additionally some of your CSS will be overwritten by hawksquawk's CSS...

[bumpyphish1]

Really excellent post.  Thanks for being our resident wonky, capologist.  Much appreciated.

[Admin]

Hey @Dolfan23, why is it that when I take html code from Peachtree and try to put it into these threads they always come out...well poorly formatted? I thought html was consistent across platforms?

 

Because some of the code you're using isn't specific enough CSS to target the content that you're using. It's basic styles that we use on Hawksquawk and are being overridden here. That might not make sense but when you have DIVs and Tables they should have an ID or a class and be exactly targeted in the CSS and that will make them look the same on any site. 

[DrReality]

Now that is fancy!

Very fancy indeed

[coachx]

Great work by hawksfanatic !

[Admin]

Great work by hawksfanatic !

 

Except every time he does one of these articles the Hawks never do a damn thing with the hope he's given us! Ban @hawksfanatic for life!  {/sarcasm}