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Atlanta Hawks Salary Cap Explained

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Buckle up.

Kevin Liles-USA TODAY Sports

Well that was a fun season. As we look forward to the 2015-16 NBA Season, there are lots of potential changes to the Atlanta Hawks. This is the first of many articles to keep you informed for this upcoming offseason. A big reason for having so many spaced out articles is that we have to wait on the July Moratorium when the NBA calculates the Salary Cap (and other relevant capology numbers) for the 2015--2016 Season.  The latest that we will hear the results are July 8th.

This particular post is not intended to give any analysis, suggest moves, evaluate scenarios, etc. This is intended to be descriptive and give a bare-minimum assessment of the Hawks standing going into the offseason. Later on in this offseason, I will evaluate the options for the Hawks' free agents and discuss potential effects due to a rising Salary Cap.

First things first, we need to update the current state of the cap for the Hawks:

Player 2015--2016 2016--2017 2017--2018 2018--2019 Total
Al Horford $12,000,000 $18,000,000 --- --- $12,000,000
Jeff Teague $8,000,000 $8,000,000 $12,000,000 --- $16,000,000
Kyle Korver $5,746,479 $5,239,437 $9,954,931 --- $10,985,916
Thabo Sefolosha $4,000,000 $3,850,000 $7,315,000 --- $7,850,000
Mike Scott $3,333,333 $3,333,334NG $6,333,335 --- $6,666,667
Shelvin Mack $2,433,333 $2,433,334NG $4,623,335 --- $4,866,667
Kent Bazemore $2,000,000 $2,600,000 --- --- $2,000,000
Dennis Schröder $1,763,400 $2,708,582TO $6,771,455 --- $4,471,982
#15 Draft Pick $1,600,200 $1,672,200 $1,744,200TO $2,673,859TO $5,016,600
Austin Daye $947,276NG $980,431 --- --- $947,276
Mike Muscala $947,276NG $980,431NG,TO $1,014,746 --- $1,927,707
Total (Guaranteed) $40,876,745 $18,761,637 $0 $0 $57,874,982
Only Guaranteed (Roster Charges added) $42,452,024 $23,109,405 $6,749,916 $6,986,160 ---
Total (Under Contract) $42,771,297 $28,217,318 $1,744,200 $2,673,859 $72,732,815
Only Under Contract (Roster Charges added) $43,296,390 $30,391,202 $7,931,623 $9,077,839 ---
Free Agents: Rights held by Hawks:
Paul Millsap $12,350,000 (Early Bird) up to $16,625,000
DeMarre Carroll $3,175,192 (Early Bird) up to 104.5% of Average Salary
Elton Brand $2,600,000 (Early Bird) up to 104.5% of Average Salary
John Jenkins $2,228,025 (*Other) up to $2,228,025
Pero Antić $1,625,000 (Early Bird) up to 104.5% of Average Salary
Gustavo Ayón $1,950,000 / $2,850,000 *(Early Bird / Bird) up to 104.5% of Average Salary / Max with Bird
Total w/ Cap Holds $66,699,514 / $67,599,514 --- --- --- ---
Salary Cap Projections $67,100,000 $89,000,000 $108,000,000 $100,000,000 ---
Luxury Tax Projections $81,600,000 $108,000,000 $127,000,000 $121,000,000 ---

Notes: Red denotes cap hold; TO-Team Option; NG-Nonguaranteed.

Mike Muscala and Austin Daye are minimum salaried players, their salaries count as 2-year vet minimum but are paid more based on years experience (except for Mike in 2015-16 when he is a 2-year vet).

There are conflicting interpretations of the waiver wire process and how it relates to the rights that the Hawks hold for Gustavo Ayón. This is why I list two different cap holds for him.

(Contract data from ShamSports.com and BasketballInsiders.com)

Guaranteed Contracts

Going into this offseason, the only players on the Hawks roster that are guaranteed to be paid by an NBA team for 2015-16 are: Al Horford, Jeff Teague, Kyle Korver, Thabo Sefolosha, Mike Scott, Shelvin Mack, Kent Bazemore, Dennis Schröder, and the #15 selection in the NBA draft. This amounts to 9 contracts totaling $40,876,745 in value.

If the Hawks want to go into the offseason with the most amount of Cap Space available to them (barring trades), then the above value is needed to calculate the amount of cap room the Hawks can create by renouncing all of their free agents and non-guaranteed contracts. Again, we need to know the actual Salary Cap in order to determine the amount of cap space for the Hawks. As of right now, the best we can do is use the projected Salary Cap which is $67.1 million. However, it is not correct to think that the amount of Cap Space created would be $67,100,000 less the $40,876,745 in guaranteed contracts. This is due to incomplete roster charges because the Hawks would have fewer than 12 players (or rights to free agents) on their cap sheet. To correct for this, we add in a charge for each roster spot below 12 on the cap sheet at the value of a minimum salaried rookie for 2015--2016, which is $525,093. The Hawks would have three of these charges because they would need to sign player #10, #11, and #12 to avoid having an incomplete roster.

So if you want an estimate on the amount of Cap Space the Hawks could potentially open up by renouncing all free agents and non-guaranteed contracts, then a value of $42,452,024 is what you should subtract from the Salary Cap. With a Salary Cap of $67.1 million, the Hawks would have roughly $24.6 million in Cap Space.

Renouncing Players

The previous figure of $24.6 million in Cap Space can only happen if the Hawks renounce: Austin Daye, Mike Muscala, Paul Millsap, Elton Brand, DeMarre Carroll, John Jenkins, Pero Antić, and Gustavo Ayón. Coincidentally, this also implies that the Hawks would renounce the rights to use the Non-Taxpayer Mid-Level Exception, Taxpayer Mid-Level Exception, and the Bi-annual Exception as they also carry cap hits.

Renouncing a player does not mean that you cannot re-sign them, but it limits a team's options to re-signing a player with either Cap Space or an exception. In the scenario that the Hawks gain ~$24.6 million in Cap Space, the only exception available to the Hawks would be the Room Mid-Level Exception that is valued at $2.814 million in 2015-2016.

As I have detailed previously with Paul, DeMarre, and Pero, the amount that the Hawks can re-sign those players is much higher than their cap holds with Early Bird Rights. So in the event that the Hawks want to re-sign any of those players, then they would be wise to not renounce them since renouncing the players limits how the Hawks can re-sign them.

Realistically

To finish this article off, I will leave the most obvious path to the offseason for the Hawks. That is to renounce: Brand, Jenkins, and Ayón. This would leave the Hawks with cap holds and player contracts that total $59,921,489. With a projected Salary Cap at $67.1 million, the Hawks would be projected to have ~$7.1 million in Cap Space. At this point, you would need to consider what this means.

Yes, the Hawks would be able to sign approximately $7.1 million worth of free agents with their Cap Space. But then, they are limited in what the starting value of contracts are for Paul, DeMarre, and Pero because the Hawks would have Early Bird Rights. For Paul, this is $16,625,000. For DeMarre and Pero, we won't know this value until the July Moratorium. The technical value is 104.5% of the average player salary in 2014-2015. An educated guess would put this value somewhere south of $6 million. So if you think DeMarre is going to sign a contract that starts at more than $6 million this season, then the Hawks will need to turn to Cap Space to re-sign him.

There are more avenues to consider for how the Hawks can approach their free agents this offseason, and we will get to those later in the offseason. But it's still best to take some time to decompress from the long season.

Edit: Brain fart. Elton Brand's cap hold is $2,600,000 and not $3,800,000. For some reason, I  counted Elton Brand as a player that would have Larry Bird Rights. This has been corrected.