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.

Exceptions (2014 Offseason)

(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.