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.
|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.
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.
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.