With the reports flying around that the Hawks have agreed in principle to deals with Thabo Sefolosha and Kent Bazemore, it would be nice to know what this all means. To your regular basketball fan, this means that Thabo and Kent will play for the Hawks next season. For those Hawks fans concerned about the rest of this offseason, these agreements in principle mean so much more.
In a nutshell, the Hawks have options in how they can acquire these two players. It could be through Cap Space, a Sign-and-Trade (S&T), or through a Salary Cap exception like the Non-Taxpayer Mid-Level Exception (NTMLE), Room Mid-Level Exception (RMLE), or the Bi-Annual Exception (BAE).
Let's dive in.
Hawks Current Standing
We have discussed the Hawks Team Salary standing as recently as Friday where we looked at the signing of Thabo. And nothing has really changed since then from a Team Salary perspective. To quickly put together the list of items currently sitting on the Hawks Team Salary docket:
- Al Horford $12,000,000
- Paul Millsap $9,500,000
- Jeff Teague $8,000,000
- Kyle Korver $6,253,521
- DeMarre Carrol $2,442,455
- Dennis Schroder $1,690,680
- John Jenkins $1,312,920
- Pero Antic $1,250,000; fully guaranteed if not waived before July 15th
- Mike Muscala $816,482; $408,241 guaranteed and fully guaranteed if not waived before January 7th
- Adreian Payne $1,546,100 (can sign between 80% and 120% of this amount)
- Shelvin Mack $1,148,163 (caphold for Qualifying Offer)
- Mike Scott $1,115,243 (caphold for Qualifying Offer)
- Gustavo Ayon $1,950,000 (caphold)
- Elton Brand $4,800,000 (caphold)
- Exceptions (do not count for incomplete roster charge):
- Bi-Annual Exception $2,077,000 (A)
- Non-Taxpayer Mid-Level Exception $5,305,000 (B)
- Room Mid-Level Exception $0 (worth $2,732,000 and can only be used if Hawks dropped far enough below Cap that they renounced BAE and NTMLE) (C)
- John Salmons Guaranteed Salary $1,000,000 (Zombie payment, he's not on the team)
With all of the above, that puts the Hawks at $62,207,564 in Team Salary. That implies Cap Space of at least $857,436 for this team, given the Salary Cap of $63.065 million. The Hawks can always clear up Cap Space by renouncing anything from 10 -- 15(B) in the above list.
The Hawks can increase their Cap Space if they waive Pero or Muscala. Keep in mind though, that the Hawks will be charged an incomplete roster charge of $507,336 for each unfilled roster spot below 12. The caphold for a player or 1st round pick count towards this, exceptions do not.
Kent and Thabo Complications
Danny Ferry has options in signing both of these players, which is why there have not been reports of the Hawks officially signing Kent or Thabo.
Hawks have signed Thabo Sefolosha. #ATLHawks— Chris Vivlamore (@ajchawks) July 10, 2014
Minutes later...(presumably after an official with the Hawks was concerned about circumvention and relayed the information)
I have just been informed that the Hawks have NOT signed Thabo Sefolosha. Agreement stands but not official. #ATLHawks— Chris Vivlamore (@ajchawks) July 10, 2014
Keep in mind, the Hawks appear to at least have strong verbal agreements with both Thabo and Kent. Per the CBA, these constitute agreements and imply these moves eat away at Cap Space (loosely described in Larry Coon's CBAFAQ Question 14, sixth bullet point down).
We have not discussed Kent Bazemore and his flexible contract yet. As per reports, Kent has an agreement in place for a 2-year deal worth $4 million:
ESPN sources say Kent Bazemore is headed to the Atlanta Hawks on a two-year, $4 million deal— Marc Stein (@ESPNSteinLine) July 12, 2014
What this likely means is that Kent has a deal that starts at no more than $2,077,000. Why this amount? Because this is the amount for the BAE2.
If the Hawks end up signing Kent with the BAE, then they never had (relevant) Cap Space this offseason. This could be because the Hawks resigned some combination of their current FAs to larger deals than their capholds, the Hawks make a large trade with their current players, or some combination of S&T with their Free Agents and current players. Suffice to say, the Hawks have lots of different ways to never renounce their NTMLE and BAE (i.e. stay above the Cap) in order to use them to sign Thabo and Kent.
I have previously discussed what I call the Hawks realistic scenario. This implies a situation where the Hawks renounce Elton, Gustavo, the BAE, and the NTMLE. The remaining Team Salary is left as is. Under this scenario, the Hawks had $48,075,564 in Team Salary before the Thabo and Kent deals. That implied $14,989,436 in Cap Space. After the news about the Thabo and Kent deals, the amount of Cap Space for the Hawks must decrease. This is where some reporters have been claiming the Hawks have "about $9 million in Cap Space". This may or may not be the case.
Under this scenario, Thabo can only be signed with Cap Space. Because of this, Thabo's starting salary is included in Team Salary even though he has not officially signed. This pushes the Hawks down to around $11,179,914 -- $10,800,954 in Cap Space depending on Thabo's starting salary.
However, Kent Bazemore need not be included in Team Salary at this moment. This is because the Hawks would have the Room Mid-Level Exception available to sign Kent to a contract starting at $2,732,000. Since Kent will have a starting salary less than this amount, he can be signed using the Room MLE instead of Cap Space. So it would not be the case that the Hawks have "around $9 million in Cap Space" under this scenario.
Of course, if the Hawks choose to sign Bazemore with Cap Space and not the Room MLE then the Hawks will have somewhere around $9 million.
Exhaustive List of Options
Instead of going through each possibility the Hawks have for signing Thabo and Kent, I have put together a short table of all the possibilities for signing these two.
|NTMLE||BAE||This move implies that the Hawks never had Cap Space. Either Ayon/Brand/Mack/Scott were resigned to deals that were above their collective capholds, or there was a trade|
|NTMLE||Cap Space||Not possible.|
|NTMLE||Room MLE||Not possible.|
|NTMLE||S&T||Bazemore could be traded before or after, in this scenario timing does not matter. In the background, this scenario implies that the Hawks would have made some large move that kept them over the Salary Cap this entire time. The Hawks would also have their BAE remaining.|
|S&T||BAE||Thabo could be traded before or after, timing would not matter. Here, the Hawks would have remained above the Salary Cap and also retain their NTMLE. The Lakers need to take back some salary in order for the Hawks to acquire Bazemore, approximately $1,266,667 at the minimum.|
|S&T||Cap Space||Strange, but still possible if OKC valued some asset of the Hawks and the moved freed up more space for the Hawks. Practically speaking, this would be a Free Agent of the Hawks that would be attractive to OKC. The Hawks would still have the Room MLE.|
|S&T||Room MLE||Same as above.|
While possible, this is unlikely in that both OKC and LAL would want some assets form the Hawks. Further, this move would not help add any Cap Space to the Hawks as Thabo and Kent would have their starting salaries added to the Hawks Team Salary before the event.
This move would imply the Hawks send back at least $2,473,016 in salary for Thabo and at least $1,266,667 in salary for Kent. The Hawks would still retain NTMLE and BAE, although they would be hard capped at the Apron of $80.829 million.
|Cap Space||BAE||Not possible.|
|Cap Space||Cap Space||This is what people typically think is happening, which may happen but does not mean it will happen. Also not likely to happen if the Hawks make another decently large signing. Leaves Hawks with ~$9 million in Cap Space plus the Room MLE.|
|Cap Space||Room MLE||Increasingly more likely to happen, this is what Danny had in mind last offseason when he signed DeMarre Carrol to a deal equivalent to the Room MLE. This leaves the Hawks with $11,179,914 -- $10,800,954 in Cap Space.|
|Cap Space||S&T||Strange, but still possible if LAL valued some asset of the Hawks and the move freed up more space for the Hawks to make an additional signing. Implies Room MLE is still available|
To close out with a short discussion on the Hawks acquiring Monroe, this is highly unlikely. For one, the requisite Cap Space the Hawks would need to clear in order to acquire his maximum starting salary ($14,746,000) has increased since the signing of Thabo. If Thabo starts at his low-end, then the Hawks need to clear $3,566,086. Rescinding the offer sheets for Mack and Scott, then renouncing their rights would clear up $2,263,406....but add in the incomplete roster charge and it is only $1,756,070 cleared. Waiving Pero could clear up an additional $742,664 but this still leaves the Hawks short $1,067,334 of the maximum.
Suffice to say, the only way for the Hawks to clear the kind of room necessary for Monroe would be through trading away current assets. It is not my place to suggest who should be traded away and what team would accept the trade, so I leave it up to you to completely decide how likely it is that someone like Monroe could join the Hawks.
1. We do know that Thabo should have a caphold between $3,809,524 and $4,188,482 if the Hawks renounce their NTMLE. If the Hawks do not renounce their NTMLE (implying they do not have relevant Cap Space), then no need to include Thabo's caphold since the NTMLE would be a placeholder for that.↩
2. The BAE can only be used once every two seasons, must not have been renounced that season, and should only be used when the team has no Cap Space.↩