Spotrac: Krejci deal leaves ATL $1,786,723 under the tax line

[sturt]

2 hours ago, JayBirdHawk said:

7 paragraphs

Nah. I counted. It was 23. You missed a few.

[sturt]

2 hours ago, JayBirdHawk said:

Not sure how you surmised this? I only added a 4th option to your 3.

Not sure how you missed this... as explained earlier, rather, you added two extra moves to what was an existing option, and... hehe... called that a 4th option.

But whatever. All good.

[AHF]

20 hours ago, sturt said:

It is to suggest, though, that the lack of any insight into the near 100% purpose of the trade to achieve the greatest possible benefit to our tax line situation... and thus, the fact that we were going to take whichever OKC option would result in the greatest payroll deduction, and it happened to be Vit... is a glaring void in his comments.

I don't follow this.  Once you are $1 under the tax line, there is no additional benefit for tax purposes to getting a player with a lower salary.  So if you are passing on a player who will actually compete for you for one with a lower salary that really doesn't make any sense if both get you under the tax line.  Getting the lower salary player does open up a bit more space where you could add salary under the tax line but if that comes with having to cut Krejci and eat his guaranteed salary then it would make more sense to trade for a player you actually want. The alternative of trading for someone you plan to cut is much more cumbersome with the need to cut him and add an additional player to the roster with the reduced cap space remaining after taking the hit from cutting Krejci.   (Unless there is not any player of interest could have been had instead).  There was no time pressure on getting a deal like this done since you just have do it before the tax numbers finalize.  

That set of incentives and timing requirements doesn't guarantee to me that the Hawks are genuinely interested in Krejci, but it certainly suggests that is a real possibility.

[Diesel]

15 minutes ago, AHF said:

I don't follow this.  Once you are $1 under the tax line, there is no additional benefit for tax purposes to getting a player with a lower salary.  So if you are passing on a player who will actually compete for you for one with a lower salary that really doesn't make any sense if both get you under the tax line.  Getting the lower salary player does open up a bit more space where you could add salary under the tax line but if that comes with having to cut Krejci and eat his guaranteed salary then it would make more sense to trade for a player you actually want. The alternative of trading for someone you plan to cut is much more cumbersome with the need to cut him and add an additional player to the roster with the reduced cap space remaining after taking the hit from cutting Krejci.   (Unless there is not any player of interest could have been had instead).  There was no time pressure on getting a deal like this done since you just have do it before the tax numbers finalize.  

That set of incentives and timing requirements doesn't guarantee to me that the Hawks are genuinely interested in Krejci, but it certainly suggests that is a real possibility.

[Gray Mule]

Krejci made the trip!  He gets this adventure as the newest Hawk.  What a way to get to know your newest team-mate.  He may really be part of the team by the time they return to the USA.

All of us here on the Squawk get super excited every time the slightest move is made by the front office.  This is a prime example.  Maybe this move is nothing.  Maybe it all works.  We will see.

[sturt]

1 hour ago, AHF said:

I don't follow this. 

Maybe I could have worded it better or explained better... what I should have said that I didn't say... (but you know, I do try to be concise... ... )

 

There were these options with OKC (which became a team of interest specifically b/c they had a new $4.5m exception at their disposal, but already having 18 players on the roster, their objective became to turn that exception into a deferred asset, aka, draft pick)...

- Krejci ($780m commitment)

- Maledon ($1.9m commitment)

- Jerome ($4.2m commitment)

Those were the three most widely considered to be OKC's intended cuts, and it turns out that that's essentially been validated by the fact that OKC dispatched all three (plus Favors, as well as the asset received for Krejci) in the past week.

Only one of the three served ATL's primary purpose, if the trade was going to be Harkless for X... only if the trade was for, say, Justin (and his $6.3m salary) would Maledon or Jerome have been a consideration.

So... when I said... "we were going to take whichever OKC option would result in the greatest payroll deduction"... I should have said we were going to take which ever OKC option would result in the greatest "net" payroll deduction "... because that gets us farther beneath the tax line."

[AHF]

25 minutes ago, sturt said:

 

So... when I said... "we were going to take whichever OKC option would result in the greatest payroll deduction"... I should have said we were going to take which ever OKC option would result in the greatest "net" payroll deduction "... because that gets us farther beneath the tax line."

Thanks, sturt.  I think all that mattered from a finance perspective was getting under the line and that there would have been a variety of players from a variety of teams that could get us there whether the deal was made pre-season, in December, in February, etc. all the way to the trade deadline so if the Hawks didn't have any real interest in Krejci then they could have waited to see if anyone came available that they were legit interested in.  So the fact that they attached a 2nd round pick and made the deal now suggests at least the possibility they are legitimately interested in Krejci.

37 minutes ago, Gray Mule said:

Krejci made the trip!  He gets this adventure as the newest Hawk.  What a way to get to know your newest team-mate.  He may really be part of the team by the time they return to the USA.

All of us here on the Squawk get super excited every time the slightest move is made by the front office.  This is a prime example.  Maybe this move is nothing.  Maybe it all works.  We will see.

The fact that they would take him on the trip certainly suggests they aren't considering an imminent cut.  Hope he turns out to show some promise and has a future.  Certainly would not be the first young man we've had on the roster who didn't work out but we can cheer him and on and wait and see.

[sturt]

1 minute ago, AHF said:

there would have been a variety of players from a variety of teams that could get us there whether the deal was made pre-season, in December, in February, etc. all the way to the trade deadline

Was saying this myself... why so important to make a deal now rather than later?... you're not that far off the tax line that it seems it should be so urgent. Surely there would be something better than this that would emerge.

 

4 minutes ago, AHF said:

so if the Hawks didn't have any real interest in Krejci then they could have waited to see if anyone came available that they were legit interested in.

Yes, I think they could have waited.

Inherently, a healthy vet who isn't yet 30 and has some track record of average performance would seem to be more valuable to a team expecting to contend than a player whose performance has been so lacking that even a team in the thick of developing players has given up on him and his comparatively puny salary ahead of giving up on 17 other players (ie, per OKC writers).

Clearly it seems they felt they'd turned over enough rocks and their sense was they didn't want to risk it... when OKC got the disabled player exception, it appears a light bulb appeared over Schlenk's (or Fields') head... knowing that OKC wasn't likely going to want to add another player to their roster of 18 anyhow, and knowing that they wanted to get their payroll under the line... opportunity knocked.

So but, your theory is they made the deal for Krejci, and theoretically even if it hadn't gotten them under the tax line, they still would have made the deal for Krejci... ?

See, I don't think they were picky about what they were getting back. And contrary to what you and I would argue (why not wait?), the other side might argue that OKC is one of not-many-teams that were in a position to take on additional salary, whether a result of managing the salary cap line or managing the luxury tax line. And that wouldn't be wrong.

And the reason I'm so sure of myself (again) is Krejci would have cost them not even a 2nd rounder to obtain in the open market (... which, again, OKC was on the verge of cutting him by all accounts) ... and and and signing him as a min vet FA wouldn't even have put them beyond their then-current tier in terms of the tax tiers.

"Beyond a reasonable doubt?"

No. Beyond a reasonable doubt, to me, translates to 90% certain, fwiw.

"Preponderance of the evidence?"

Yes. And well beyond the 51% certain from where I sit.

[sturt]

1 hour ago, AHF said:

So the fact that they attached a 2nd round pick and made the deal now suggests at least the possibility they are legitimately interested in Krejci.

Nah.

It's common in the modern NBA... and you know this... that sometimes you have to attach draft picks to get a team to take on the salary you're trying to rid yourself of.

[sturt]

1 hour ago, AHF said:

The fact that they would take him on the trip certainly suggests they aren't considering an imminent cut.

It's a free (relatively speaking) look-see. Teams want 20 bodies for training camp... to cut him before training camp is done or nearly done does no one any good.

HAVING SAID THAT... you may have missed that I've evolved to be content with keeping him, since that's practically the only way you can get to have 15 players on the roster... and as you say, who knows, perhaps we catch lightning in a bottle... though, also, I'm fine with @JayBirdHawk's suggestion that they cut him so that they have the additional room beneath the line necessary to add a name-brand vet.

[AHF]

1 hour ago, sturt said:

Was saying this myself... why so important to make a deal now rather than later?... you're not that far off the tax line that it seems it should be so urgent. Surely there would be something better than this that would emerge.

 

Yes, I think they could have waited.

Inherently, a healthy vet who isn't yet 30 and has some track record of average performance would seem to be more valuable to a team expecting to contend than a player whose performance has been so lacking that even a team in the thick of developing players has given up on him and his comparatively puny salary ahead of giving up on 17 other players (ie, per OKC writers).

Clearly it seems they felt they'd turned over enough rocks and their sense was they didn't want to risk it... when OKC got the disabled player exception, it appears a light bulb appeared over Schlenk's (or Fields') head... knowing that OKC wasn't likely going to want to add another player to their roster of 18 anyhow, and knowing that they wanted to get their payroll under the line... opportunity knocked.

So but, your theory is they made the deal for Krejci, and theoretically even if it hadn't gotten them under the tax line, they still would have made the deal for Krejci... ?

See, I don't think they were picky about what they were getting back. And contrary to what you and I would argue (why not wait?), the other side might argue that OKC is one of not-many-teams that were in a position to take on additional salary, whether a result of managing the salary cap line or managing the luxury tax line. And that wouldn't be wrong.

And the reason I'm so sure of myself (again) is Krejci would have cost them not even a 2nd rounder to obtain in the open market (... which, again, OKC was on the verge of cutting him by all accounts) ... and and and signing him as a min vet FA wouldn't even have put them beyond their then-current tier in terms of the tax tiers.

"Beyond a reasonable doubt?"

No. Beyond a reasonable doubt, to me, translates to 90% certain, fwiw.

"Preponderance of the evidence?"

Yes. And well beyond the 51% certain from where I sit.

My view is that the most likely scenario is they have some legit interest in him as a player.  Signing him as a min vet FA would make no sense since the team needed to cut salary, not add it.  The financial objective was not to avoid going up a level as a tax paying team it was to avoid being a tax paying team altogether.  But we could have done that a lot of ways so for me the preponderance of evidence is that they chose to do it with him because they think he has some potential and want to check him out.

I don't disagree that the financial part was the most important.  Why would I?  I told you over a month ago that I thought we would absolutely get under the tax line so I've always thought that was going to happen.  You were the one who didn't think that was going to happen.

But when I ask "why now", "why give up a 2nd round pick for a player that would otherwise have become an UFA", and "why not target someone else" the best answer I see is "the team has some interest in adding him to the roster to see if he can be part of the future."  That was always going to be the sought-after outcome for TS & Fields: swing a deal that got us under the tax line and acquire someone of interest in the process.  The fallback position would be to acquire someone who didn't interest you just to get under the tax line.  The only reason you do this now is if you are interested or you think the cost of trading for someone like him later on would be more expensive (like if TS/Fields thought they would have to move a first round pick to shed salary at the deadline).  I think a second round pick is on par for this kind of cost shedding so that makes me think they actually are interested.

Note that Krijci being "of interest" does not mean that we are long-term committed to him.  You kick the tires and go from there depending on what he shows in this kind of context.  But "of interest" is different than him being a pure cost reduction (i.e., someone who TS/Fields don't care whether we get his rights or not).

[Gray Mule]

Krejci, whether he was wanted or not, is now a Hawk!  True, Atlanta did not have to make the deal that was made right now.  They could have waited.  Whatever the reason that the deal was made doesn't matter now.  It's done.  It's history.

Is the current Hawk roster the final one?  We don't know.  Another deal or even two are still a possibility.  We may have wanted to take a look at Krejci and see what he had.  Oklahoma writers have told us that they believe that he is no good.  Has no talent.  Someone once thought he was OK or he wouldn't have been on their roster.

Krejci may soon be released or traded again to another NBA team.  Until this happens, he's an Atlanta Hawk.  Because he's a Hawk, i'm rooting for him to do well !!

 

[Diesel]

1 hour ago, AHF said:

My view is that the most likely scenario is they have some legit interest in him as a player.  Signing him as a min vet FA would make no sense since the team needed to cut salary, not add it.  The financial objective was not to avoid going up a level as a tax paying team it was to avoid being a tax paying team altogether.  But we could have done that a lot of ways so for me the preponderance of evidence is that they chose to do it with him because they think he has some potential and want to check him out.

I don't disagree that the financial part was the most important.  Why would I?  I told you over a month ago that I thought we would absolutely get under the tax line so I've always thought that was going to happen.  You were the one who didn't think that was going to happen.

But when I ask "why now", "why give up a 2nd round pick for a player that would otherwise have become an UFA", and "why not target someone else" the best answer I see is "the team has some interest in adding him to the roster to see if he can be part of the future."  That was always going to be the sought-after outcome for TS & Fields: swing a deal that got us under the tax line and acquire someone of interest in the process.  The fallback position would be to acquire someone who didn't interest you just to get under the tax line.  The only reason you do this now is if you are interested or you think the cost of trading for someone like him later on would be more expensive (like if TS/Fields thought they would have to move a first round pick to shed salary at the deadline).  I think a second round pick is on par for this kind of cost shedding so that makes me think they actually are interested.

Note that Krijci being "of interest" does not mean that we are long-term committed to him.  You kick the tires and go from there depending on what he shows in this kind of context.  But "of interest" is different than him being a pure cost reduction (i.e., someone who TS/Fields don't care whether we get his rights or not).

[JayBirdHawk]

3 hours ago, sturt said:

Nah.

It's common in the modern NBA... and you know this... that sometimes you have to attach draft picks to get a team to take on the salary you're trying to rid yourself of.

True but for $4.5 million, if the Hawks were not interested in taking back any salary (meaning a player) they could have reached a deal with team with capspace and paid them a fake 2nd to take that salary.

[JayBirdHawk]

2 hours ago, AHF said:

But when I ask "why now",

Why now? - you have now removed the limitations of making in season trades as a Luxury  team in how much salary you can take back.

Over the tax - 125% of the outgoing salary + $100,000

Under the tax:

 

Outgoing Salary	Incoming Salary Allowed
$0 - $6,533,333	175% of the outgoing salary, plus $100,000
$6,533,334 - $19.6 million	Outgoing salary + $5,000,000
>$19.6 million	125% of the outgoing salary + $100,000

 

So if we want to trade @sturt favorite whipping boy JHoli who is making $6.2 million we can take back a player worth $10.85 million.  If we had remained above the tax we could only take back $7.75 million. 

Another option - combine JHoli and Krejci we can take back $12.9 million.

[AHF]

3 hours ago, JayBirdHawk said:

True but for $4.5 million, if the Hawks were not interested in taking back any salary (meaning a player) they could have reached a deal with team with capspace and paid them a fake 2nd to take that salary.

Exactly.  The price we paid is the going price for a negative value contract that isn’t that large.  We could pretty much always do a deal like this unless you think the going rate for absorbing a few million in salary is a first round pick.  (In which case I would remind you that this was the price for the Hawks absorbing 4-5 times that amount of salary.)

2 hours ago, JayBirdHawk said:

Why now? - you have now removed the limitations of making in season trades as a Luxury  team in how much salary you can take back.

Over the tax - 125% of the outgoing salary + $100,000

Under the tax:

 

Outgoing Salary	Incoming Salary Allowed
$0 - $6,533,333	175% of the outgoing salary, plus $100,000
$6,533,334 - $19.6 million	Outgoing salary + $5,000,000
>$19.6 million	125% of the outgoing salary + $100,000

 

So if we want to trade @sturt favorite whipping boy JHoli who is making $6.2 million we can take back a player worth $10.85 million.  If we had remained above the tax we could only take back $7.75 million. 

Another option - combine JHoli and Krejci we can take back $12.9 million.

This is plausible as well, although I remain highly skeptical that this team will go over the tax line later on.  But it does give us a baseline of staying out of the tax and the flexibility to add more salary if we went a different direction.  And if you are going to do that you need to keep Krejci so you are able to trade him at a later date for the higher potential return.

That is a good explanation for why you might do the deal now even if you don’t care about Krejci at all.  I guess we’ll see how it plays out.

[JayBirdHawk]

43 minutes ago, AHF said:

although I remain highly skeptical that this team will go over the tax line later on.

I agree it's less than likely the Hawks go into Luxury Tax this season.

Just noting it's better to be under in case "One of Those trades' no one expects becomes available- it's the flexibility it offers being under.

[Diesel]

10 hours ago, JayBirdHawk said:

Why now? - you have now removed the limitations of making in season trades as a Luxury  team in how much salary you can take back.

Over the tax - 125% of the outgoing salary + $100,000

Under the tax:

 

Outgoing Salary	Incoming Salary Allowed
$0 - $6,533,333	175% of the outgoing salary, plus $100,000
$6,533,334 - $19.6 million	Outgoing salary + $5,000,000
>$19.6 million	125% of the outgoing salary + $100,000

 

So if we want to trade @sturt favorite whipping boy JHoli who is making $6.2 million we can take back a player worth $10.85 million.  If we had remained above the tax we could only take back $7.75 million. 

Another option - combine JHoli and Krejci we can take back $12.9 million.

[sturt]

15 hours ago, JayBirdHawk said:

they could have reached a deal with team with capspace and paid them a fake 2nd to take that salary.

Nope. Apparently not.

Apparently, OKC had their limits in terms of how much salary they wanted to take back, in addition to having an interest in turning the player they were evidently going to cut into some usable asset.

 

18 hours ago, AHF said:

You were the one who didn't think that was going to happen.

You were right. I was wrong. (In case that didn't already come through in what I'd already said .)

And yet, you spend a lot of time distracting from my central question... was the priority on getting below the tax, or was the priority to obtain Krejci?... or, let me try it this way... is it your opinion that had the disabled player exception not happened that ATL would have pursued a deal for Krejci one way or another?

(Because, of course, I don't. This was a money deal... a deal for a contract, and the player could have been anyone, and Schlields still would have pursued it. It didn't matter who the player was.)

 

14 hours ago, JayBirdHawk said:

So if we want to trade @sturt favorite whipping boy JHoli who is making $6.2 million we can take back a player worth $10.85 million.  If we had remained above the tax we could only take back $7.75 million. 

Another option - combine JHoli and Krejci we can take back $12.9 million.

This is a very good point, Jay. Kudos.

And.

All the more reason they really didn't care who the was coming back in the deal... it was about the contract. There is no evidence they were hot for Krejci... moreover there is evidence that the head coach didn't even know enough about the new guy to realize he's been regarded as a point guard commonly and almost never as a power forward. His words, not mine (paraphrasing... "he can play 2 through 4").

This is not someone our braintrust studied.

If it turns out, great, but that's icing... very thin layer of icing... on that cake. It's all about the contract.

C'mon. It's not like I'm the only one saying this. Practically every NBA writer with any regard suggests as much.

 

(And it appears I've made my friend Diesel extremely upset. Didn't realize. My bad. I apologize, man. You're okay with me.)

 

[JayBirdHawk]

18 hours ago, JayBirdHawk said:

......they could have reached a deal with team with capspace and paid them a fake 2nd to take that salary.

 

3 hours ago, sturt said:

Nope. Apparently not.

Pacers and Spurs are two teams with capspace that could take Harkless's deal without having to send out salary. OKC doesn't have capspace.