This upcoming off-season for the Atlanta Hawks will revolve around the status of Al Horford. I have previously detailed what his maximum contract would look like and how Atlanta can navigate the off-season both with and without Al. For those veteran Atlanta Hawks fans, the decision of offering Al a 5-year maximum salaried contract may appear to be similar to the decision faced in the 2010 off-season with Joe Johnson.
It's true that Al and Joe have parallels. Al enters this off-season as a 9 year veteran, with Bird Rights, the ability to sign a contract through age 34, and uncertainty surrounding the upcoming CBA, which will be renegotiated in 2017. Joe entered the 2010 off-season as a 9 year veteran, with Bird Rights, the ability to sign a contract through age 34, and a lock-out looming in 2011. This is just about where the similarities end, at least from a contract point of view.
There may be player quality similarities associated with age curves, or their relative pecking order on the team, but I will not dive into that. That's not my cup of tea. So let me give you the contract related differences as well as the team composition differences, all from the perspective of the CBA.
This is a bit of a premature of a discussion since the 2016--17 Salary Cap has not yet been set, but for the sake of argument we are going to run with the current NBA projections. This implies a Salary Cap of around $92 million which would be a maximum starting salary for Al of about $26 million. Al is eligible for a 5-year contract which includes 7.5% raises and can contain a no-trade clause. The 7.5% raises are simple (not compound) and means that Al's yearly salary can increase by $1.95 million. This leads to a total value of just less than $150 million. At the same time though, the current projections for the Salary Cap are to rise from $92 million to $112 million. Again, these are only projections so we don't know what they will be. I've also detailed how the NBA makes their projections and where there are flaws, if you're interested in an extreme level of detail.
|Joe||Joe %||Joe's Cap||Al||Al %||Al's Cap|
Al's contract and the future Salary Caps has uncertainty to it much like Joe's contract, and it's relation to the Salary Cap, had uncertainty to it during the 2010 off-season. But with the benefit of hindsight, we know exactly what Joe's contract looked like and how the Salary Cap increased. The contract was for 6 years totaling $123,658,089. Yes, that is for a full year more and contained 10.5% raises as opposed to 7.5% raises. This was because Joe signed under the 2005 CBA while Al will sign under the 2011 CBA. We also know that the Salary Cap in the Joe contract went from $58.044 million to $70 million. That's right, it has hardly moved until recently because the 2011 CBA revised the player's share of Basketball-Related Income (BRI) from 57% to around 50% and there was a minimum threshold of $58.044 million so as to not have the Salary Cap decrease at the beginning of the 2011 CBA.
From a raw perspective, it's clear that Al would have a higher salary and total compensation. That prices increase over time is nothing new, that's called inflation when looking at the macroeconomy. In the scope of the NBA, contract prices need to be accounted for relative to the amount that a team is able to spend: roughly the Salary Cap. In adjusting this way, it's clear that Al's contract is currently projected to be less expensive than Joe's. And by a large margin.
Unless one believes that the upcoming CBA negotiations are going to leave the players with another significant drop in BRI share and that the growth in BRI slows down, then it's clear Al's hypothetical contract is less expensive than Joe's.
No need to bring up the current cap standing of the Hawks, we know that the Hawks have cap space to sign other free agents no matter if Al is signed to his 5-year maximum or if he leaves. Atlanta has options, which is helpful in negotiations. But this was not the case in the 2010 off-season where Atlanta was actually backed into a corner.
Allow me to dig up an old ShamSports cap sheet for Atlanta:
This was the end of season contract situation for the Atlanta Hawks in 2010, although Bibby ($200,000), Josh ($100,000), and Marvin ($550,000) all hit contract incentives which increased their cap hits for the 2010--11 Season that isn't accurately reflected here.
Atlanta had Joe as a free agent along with Josh Childress and a hodge-podge of veteran minimum players: Randolph Morris, Joe Smith, Jason Collins, Mario West, and Othello Hunter.
Joe had a cap hold of his maximum salary of $16,324,500, Josh Childress had a cap hold of $10,894,350 (and an extended qualifying offer of $4,844,355 that didn't count against the cap) while all of the veteran minimum's each had a cap hold of $854,389. That off-season, the Mid-Level Exception (MLE) was slated at $5.765 million and the Bi-Annual Exception (BAE) was for $2.08 million. Both of which were available to Atlanta and carried a cap hold.
The team also had the 24th pick in the NBA Draft. The Hawks did an all-too familiar move of trading down from the 24th pick in the draft ($963,600) to the 27th pick ($868,600) which ended up freeing a cool $95,000 and netted the 31st pick in the draft, which they immediately sold to Oklahoma City for a rumored $3 million.
The Salary Cap was $58,044,000 for that off-season and the team started over the cap. Unless the team made some major trades, it simply was not possible to ever be below the cap that off-season and also re-sign Joe. The team did have the MLE, BAE, and a potential Josh Childress sign-and-trade1 as ways to build the team outside of veteran minimum contracts. As it turns out, veteran minimum contracts were the preferred method for previous ownership. This was possibly to avoid the Luxury Tax, which they had the ability to exceed in 2011 through 2014 but only did so in 2012.
If Atlanta renounced all of their free agents, including Joe, then there would be 9 players under contract totaling $49,348,814. But the Hawks would not have cap space in this scenario because there would be 3 incomplete roster charges ($473,604 each) and the MLE plus BAE cap holds. The incomplete roster charges bring the total to $50,769,626 while the MLE and BAE bring the total to $58,614,626, which was $570,626 over the cap.2
So this was the corner the team backed themselves into: pay Joe and keep his services or do not pay Joe and be left with the same tools (MLE, BAE, Chill s-n-t) that you'd have in the scenario of paying him. To make matters worse, the team had 0 leverage with Joe in contract talks because Joe knew this. Joe next-best alternative on the open market was a 5-year contract with 8% raises, which would total $94,682,100 over 5 years. Joe fooled around with other teams to create just enough of a threat that he may leave and triggered Atlanta to toss the house at him. And it worked.
Atlanta had only one option to remain a high-caliber team through the 2010 off-season, and that was to pay Joe Johnson. If the team had another viable option, then it would have reduced the amount of leverage that Joe would have in negotiations. This would have decreased the total compensation in Joe's contract, but by how much? I'm not sure. It may have still made it a poor decision to give Joe a large contract. But here's the rub: that option didn't exist. If it did, then Atlanta very well might have taken that path in 2010 instead.
There are more dissimilarities between the Al and Joe contract situations than there are similarities. It is difficult for me to understand why it is the case that there are people who would like to draw the comparison. Surely, there are some people who were unaware of the 2010 off-season circumstances for Atlanta. These are the people I hope to reach with this article. There's certainly people out there that want to be reckless in understanding and attempt to have shock-jock type opinions on the state of the franchise. Those are people that will either ignore this article or won't take the time to digest it, c'est la vie.
1. Josh Childress was indeed used in a sign-and-trade with the Phoenix Suns for a 2nd round pick that turned out to be The Threegional Manager. The move also created a Traded Player Exception, which Atlanta never utilized.↩
2. Technically, Atlanta could renounce the MLE and BAE and have $7,274,374 in cap space. This might have been helpful if a player would not accept the MLE of $5.765 million but would accept a contract starting above $6 million. But the overarching point that the team had limited ability to sign free agents as compared to the 2016 off-season stands whether or not you want to point out the Hawks could have had cap space.↩