DeMarre Carroll has been an integral piece for the Atlanta Hawks from 2013--15. Even though he was the lone non-All-Star for the 2014--15 starting lineup, he was undoubtedly the best defender and top hustle guy. Over his two seasons in Atlanta, he averaged 11.8 ppg, 5.4 rpg, 1.0 spg, and 1.8 apg for the Hawks. He will command a higher salary than the $2,442,455 he was paid this past season.
To reiterate DeMarre's free agent status, I remind everyone that DeMarre's value to the Hawks from a contract standpoint was discussed back in December on this site. Because DeMarre has played in Atlanta for two seasons, he has the status of an Early Bird Free Agent and carries a cap hold of $3,175,192. However, it has appears that DeMarre has outplayed his maximum starting salary from Early Bird Rights of approximately $5.8 million, which would make his Early Bird Rights practically useless. For DeMarre, he has 6 years of experience in the NBA which means that his maximum salary can start at a predicted $15,528,613 with 4.5% raises over 4 seasons. This would lead to the following contract structure:
This can serve as a CBA lesson. The "Max" is a player dependent term. If you recall from our Paul Millsap article, you'll notice that DeMarre's "Max" is less than Paul's "Max" and even less than what the Early Bird Rights would afford Paul Millsap. And further, DeMarre's Early Bird Rights are not as valuable than Paul's. This highlights why it is difficult to give a simple answer when discussing the CBA. The concepts contained in the CBA are rarely complicated, but there are so many concepts and conditions in the CBA that its length is the most difficult aspect of it.
But let's get into the options for Atlanta as well as DeMarre as they relate to this upcoming off-season.
DeMarre's Agent: Mark Bartelstein
This guy is a big time agent with lots of creative ideas for maximizing his free agents value. For instance, he was the mastermind behind David Lee signing a one-year contract above his qualifying offer as a restricted free agent. This then led to David Lee being signed-and-traded to the Golden State Warriors for $80 million over 6 years. This situation was unique, so you know that DeMarre's agent is the kind of guy who is willing to get creative as opposed to holding onto a particular stance and not budging.
I do not think think Mark Bartelstein is necessarily in the charity business, so I would severely doubt that DeMarre takes a large pay-cut in order to stay with the Hawks based upon the previous transactions of Mark. However, that is not to say that DeMarre may value winning and a stable situation in Atlanta over some other teams. This may induce DeMarre to sign with Atlanta at a value less than what other teams may offer.
Perusing through the Bartelstein clients, a few names that piques interest are Cliff Alexander, Sam Dekker, Jonathan Holmes, RJ Hunter, Larry Nance Jr., Kevin Pangos, and Bobby Portis. Also of note, last season's draft pick, Adreian Payne, is also a client of Bartelstein. So this is something to keep in mind with the upcoming draft if the Hawks make a play for any of these draftees.
Keeping DeMarre in Atlanta
With DeMarre's performance throughout the year, he has pushed his starting salary above what the Early Bird Rights would allow for Atlanta. With Atlanta's current Salary Cap set-up, we would need to envision what free agents rights the Hawks would need to renounce in order to retain DeMarre at a particular starting salary:
|Under Contract:||$42,771,297||# of Holds: 11|
|Free Agent||Cap Holds||(Rights)||(Reason)|
|Paul Millsap||$12,350,000||Early Bird||130% of previous salary|
|Elton Brand||$2,600,000||Early Bird||130% of previous salary|
|DeMarre Carroll||$3,175,192||Early Bird||130% of previous salary|
|John Jenkins||$2,228,025||*Other||What his contract would have been were his fourth year option exercised|
|Pero Antic||$1,625,000||Early Bird||130% of previous salary|
|Gustavo Ayon||$1,950,000 / $2,850,000||*Other||Conflicting reports if he receives Early Bird or Bird Rights|
|Total (Ayon EB):||$66,699,514|
|Total (Ayon B):||$67,599,514||Rookie Minimum:||$525,093|
You can pretty much mark off Ayon from the table above and recognize that the Hawks will have $64,749,514 in committed cap holds to begin the off-season. With an anticipated salary cap of around $67.1 million, this does not leave any cap space for the Hawks when you account for the cap holds associated with the Bi-Annual Exception and Mid-Level Exception. However, the Hawks would be able to renounce their exceptions along with Jenkins and Brand in order to get down to $59,921,489 in committed cap holds. This would be around ~$7.1 million in cap space.
With ~$7.1 million in cap space, the Hawks would be able to offer DeMarre a contract which begins around ~$10.3 million. This is because DeMarre's cap hold can be renounced to clear up more cap space in offering DeMarre a contract. The Hawks could clear up more space by renouncing Pero, which would increase DeMarre's starting salary up to ~$12 million. The Hawks also have non-guaranteed contracts for Mike Muscala and Austin Daye which are for the veteran minimum ($947,276). If the Hawks were to waive one of those players to clear up more cap space, then the Hawks would only free up $422,183 in cap space because they would have fewer than 12 players and cap holds. But it is possible for the Hawks to waive Muscala and Daye to get DeMarre a contract starting around ~$13 million while keeping the Early Bird Rights to Paul Millsap.
Another route to go about clearing cap space in order to sign DeMarre would be to renounce Paul and his associated $12,350,000 cap hold. Simply renouncing Paul would clear up enough cap space for the Hawks to give DeMarre a maximum value contract.
DeMarre Goes Elsewhere
In pretty much every conceivable scenario, DeMarre will need to be signed via cap space. Eric Pincus of BasketballInsiders.com put together an article which detailed the best case scenario for cap space of teams going into this offseason back in December 2014. From that article, we can see a listing of teams that could potentially have over $10 million in cap space: Utah, Phoenix, Minnesota, Toronto, Charlotte, Milwaukee, Miami, Memphis, Orlando, New Orleans, Indiana, New York, LAL, San Antonio, Boston, Detroit, Cleveland, Dallas, Portland, and Philadelphia. With all of the NBA moves since December, this list has changed. However, the main takeaway is that there are numerous teams that could offer DeMarre a contract starting at $10 million.
For DeMarre, he benefits from more teams with cap space. The more teams that can bid for his services, then the better as that will increase his contract offers. This is also bad news for Atlanta as they would need to increase their offer in order to retain DeMarre. So if we start to see teams make cap clearing moves at the start of this off-season, then we can be sure that DeMarre's likelihood of leaving the Hawks increases as the starting salary for his contract starts to rise. The Hawks will only be able to sign DeMarre with cap space and there are only so many ways the Hawks can clear salary for DeMarre without also giving up other assets.
Sign-and-Trade of DeMarre
The likelihood of a sign-and-trade transaction involving DeMarre are fairly low. For one, a sign-and-trade would only make sense for a team that does not have available cap space to sign DeMarre. Said team would also need to appeal to DeMarre in some way and further have some assets to trade away to the Hawks that would appeal to the Hawks. Said team would also be hard capped at the Apron1. This would appear to be too many conditions that need to be met, thus making the situation unlikely. However, I will note that if DeMarre does seek a sign-and-trade that he will not be subject to Base Year Compensation rules because he will have been signed via cap space. So it makes this scenario slightly less complicated.
A Gamble from DeMarre?
DeMarre's projected maximum contract for this off-season is around $15.5 million. This is because of the salary cap and because DeMarre only has 6 years of experience. If DeMarre attempts to reenter free agency in the 2016 off-season, then he will move up a maximum contract slot (due to 7 years of service) and there will be a bump in the salary cap. DeMarre's max is predicted to be $23,803,032. This is an increase of over $8 million in salary. I remind you that just because a player's maximum increases does not imply that the player will be paid more. Pay is still determined through market dynamics, so available alternatives and cap space will be the main drivers for DeMarre's pay. Still, if DeMarre wants to take a gamble then he has a few options.
One scenario is that the Hawks operate the entire off-season above the cap, and thus never renounce their Non-Taxpayer Mid-Level Exception. This would allow the Hawks to sign DeMarre to a one-year contract for the full NTMLE which is $5.464 million. This would give DeMarre a substantial raise and provide him with veto-rights for the 2015--16 Season. DeMarre may prefer a two-year contract with the second year as a player option for the NTMLE, this would also give DeMarre veto rights as the contract would be technically viewed as a 1-year contract plus an option for a second year. Either of these would give DeMarre a way to reenter free agency in 2016.
Another option for the Hawks and DeMarre is to renounce his Early Bird Rights and retain his Non-Bird Rights. This would reduce his cap hold to $2,930,946 and save the Hawks $244,246 in cap space. The downside to this is that DeMarre would only be able to secure a contract starting at up to $2,930,946. This is a significant pay-cut and is surely an unnecessary risk for DeMarre with limited benefit for the Hawks. If there is a potential free agent willing to sign with the Hawks but the selling point is that they desire that extra $244,246 in cap space, then the Hawks likely do not want that type of player.
The more likely scenario that DeMarre might take is to sign with the Hawks through cap space, but only have a one or two year deal, presumably with the second year as a player option. This would give DeMarre the ability to go back to free agency with Bird Rights and an increased salary cap. DeMarre could also see a substantial raise if the Hawks clear enough cap space and are willing to go into a one-year contract with DeMarre. Both sides take some risk under this scenario though. The Hawks risk that they may have to pay DeMarre an even larger amount in the 2016 off-season than if they were able to secure DeMarre to a multi-year deal. And DeMarre also takes on the risk that he may get injured or his play deteriorates in some way that he cannot secure a large contract in the 2016 off-season. Still, both sides may benefit from such a scenario and we would see a hypothetical difference in contracts of the following form:
|Season||Max Salary||1- year then Bird Max||Difference|
As a point of reference and emphasis, the current CBA only allows for a player option in the final year of a contract. So any hypothetical contracts with multiple player options cannot happen. Further, a player cannot have a player option for the 2nd season of a 3+ season contract. So any suggestions of this would also be pointless. The story does not change much if I replace player option with early termination option. An early termination option can only be for the fifth season of a 5 year contract. DeMarre does not have any rights that would allow him a 5 year contract, so again this would be pointless to discuss.
DeMarre's free agency tour will arguably be more interesting than any other Hawk. He is clearly the Hawk who will see the largest increase in salary and deservedly so. If DeMarre decides to hold a hard line in negotiations, then he may force the Hawks to have to decide between signing him or Paul unless the Hawks can clear salary by trading away players under contract.
Whatever route DeMarre and the Hawks decide to go with will likely serve as a reminder to all that the NBA is a business where players seek to maximize their value and teams attempt to maneuver the salary cap in order to put the best team in place. Many times the salary cap forces a team to spend less on one aspect of the team in order to efficiently use their cap space. While I imagine that the Hawks front office and coaching staff have a strong personal relationship with DeMarre, all sides likely recognize that they have tough business decisions to make. This will be an interesting story-line to follow for the off-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.
1. The Apron is defined as $4 million more than the Luxury Tax for a given year.↩