Atlanta Hawks State of the Cap, July 7th

With a lull in the Free Agency period right now, it might be a good time to see where the Hawks stand in relation to this offseason. As a bit of a refresher, we know the current group of Hawks on guaranteed contracts for the upcoming season:

1. Al Horford $12,000,000
2. Paul Millsap $9,500,000
3. Jeff Teague $8,000,000
4. Kyle Korver $6,253,521
5. DeMarre Carrol $2,442,455
6. Dennis Schroder $1,690,680
7. John Jenkins $1,312,920

This is a total of $41,199,576 committed to 7 contracts. In addition, the Hawks have three non-guaranteed contracts to play around with:

8. John Salmons $7,000,000; with $1,000,000 guaranteed and fully guaranteed if not waived by July 10th
9. Pero Antic $1,250,000; fully guaranteed if not waived before July 15th
10. Mike Muscala $816,482; $408,241 guaranteed and fully guaranteed if not waived before January 7th

Before capholds, this would be a total of between $42,607,817 - $50,266,058. While this is the range, it is of my opinion that we should be realistic in our assessment of the Hawks standing and assume that John Salmons will be waived and Pero and Muscala will remain on the roster. So for this purpose, the Hawks realistically have$44,266,058 committed to salaries for this upcoming season.

Of note, the Hawks have only given us an indication that they have extended qualifying offers to Shelvin Mack and Mike Scott. This implies that Gustavo likely did not receive a qualifying offer. So to now add in the rest of the capholds (ordered in terms of least likely to be renounced to most likely):

11. Adreian Payne $1,546,100 (can sign between 80% and 120% of this amount)
12. Shelvin Mack $1,148,163
13. Mike Scott $1,115,243
14. Gustavo Ayon $1,950,000
15. Elton Brand $4,800,000
16. Bi-Annual Exception $2,077,000
17. Non-Taxpayer Mid-Level Exception $5,305,000

Accounting for all of these capholds (up to $17,941,506 in total) puts the Hawks somewhere between $45,045,402 - $68,207,564 in Team Salary. The low end is the max cap space scenario, which involves waiving Salmons and Pero but keeping Muscala. Then renouncing all of the capholds, which may or may not involve stashing Adreian Payne in Europe.

Realistically, the Hawks would have $48,075,564 committed to Team Salary. Under the realistic scenario, the Hawks would waive John Salmons, keep Pero and Muscala, and have the capholds of Payne, Mack, and Scott still on the books.

Thabo Sefolosha Signing

The reports of Thabo signing indicate a 3 year deal worth $12 million. The total value is of semi-importance, but the first year salary is the most important for the rest of this offseason.

Contracts in the NBA can be flat, declining, or increasing in base compensation. For Thabo, the Hawks are allowed to sign him to a contract that can increase or decrease by at most 4.5% of his first season's salary. Each subsequent year can increase/decrease by this same amount. In finance parlance, the raises/declines are simple and not compound.

If the $12 million is to be believed, then the range of values for Thabo's first year salary is fairly wide. In particular, his contract could start as low as $3,809,524 and as high as $4,188,482. So there is a considerable range of $378,958 that we cannot pin down from reports. Realistically, the Hawks could have between $51,885,088 - $52,264,046 committed to Team Salary. So reports of $11 million in cap space are right in this range.

Furthermore, this signing does not definitively give us reason to claim the Hawks have cap space. As outlined above, the Hawks could still be operating above the Cap and chose to sign Thabo with their Non-Taxpayer Mid-Level Exception. Although I still stand by this as a highly unlikely possibility, we cannot rule this out.