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Atlanta Hawks pre-trade deadline cap update

Everything you need to know about the Hawks’ salary cap situation as the trade deadline approaches.

NBA: Los Angeles Clippers at Atlanta Hawks Jason Getz-USA TODAY Sports

Last time I had anything substantial to write up for Peachtree Hoops was a recap of the 2016 off-season. Since then: Dennis Schröder reached an agreement for an extension; Tim Hardaway Jr did not; Edy Tavares was waived; Ryan Kelly was signed; the NBA and Player’s Association reached a verbal agreement on a new Collective Bargaining Agreement (CBA); Ryan Kelly was waived before his contract’s guarantee date; Kyle Korver was traded for Mike Dunleavy Jr, Mo Williams, a 2019 1st round draft pick, and $750,000 cash; the remaining half of Mike Muscala’s contract became guaranteed; Mo Williams plus $650,000 cash was traded to Denver for former Billy Knight 2005 draft pick Cenk Akyol; Gary Neal signed a 10-day contract; and the new CBA was officially ratified (and apparently written).

None of these events were significant enough to sit down and write up an article, but jointly there’s enough here that I should give a recap and talk about the current cap standing of the Hawks. I will largely omit the new CBA details because 1) the CBA details are still cloudy, 2) it does not directly affect the current season, 3) the new CBA is not yet available and 4) new CBA details deserves its own article.

So let’s dig in.

Updated Cap Sheet

Pre-Trade Deadline Atlanta Cap Sheet

Player 2016-17 2017-18 2018-19 2019-20 2020-21 Notes
Player 2016-17 2017-18 2018-19 2019-20 2020-21 Notes
Dwight Howard $23,180,275 $23,500,000 $23,819,725 - -
Paul Millsap $20,072,033 $21,472,407 - - - 17-18 Player Option
Kent Bazemore $15,730,338 $16,910,113 $18,089,887 $19,269,662 -
Tiago Splitter $8,550,000 - - - -
Mike Dunleavy $4,837,500 $5,175,000 - - - 17-18 partially gt'd
Kris Humphries $4,000,000 - - - -
Thabo Sefolosha $3,850,000 - - - -
Mike Scott $3,333,333 - - - -
Dennis Schroder $2,708,582 $15,500,000 $15,500,000 $15,500,000 $15,500,000
Malcolm Delaney $2,500,000 $2,500,000 - - -
Taurean Prince $2,318,280 $2,422,560 $2,526,840 $3,481,986 - 18-19 and 19-20 Team Option
Tim Hardaway Jr. $2,281,605 - - - -
Mo Williams (TPE) $2,194,500 - - - - expires 2018-1-18
DeAndre' Bembry $1,499,760 $1,567,200 $1,634,640 $2,603,982 - 18-19 and 19-20 Team Option
Mike Muscala $1,015,696 - - - -
Jarrett Jack (waived) $980,431 - - - -
Ryan Kelly (waived) $418,228 - - - -
Gary Neal (10-day) $57,672 - - - -
Matt Costello (waived) $50,000 - - - -
Total $99,578,233 $89,047,280 $61,571,092 $40,855,630 $15,500,000
Total (Guaranteed) $99,578,233 $65,912,373 $57,409,612 $34,769,662 $15,500,000
Salary info from The Vertical

As of right now, Atlanta has $99,578,233 on their cap sheet (the salary cap is $94,143,000) with $2,850,000 available to send in a trade and able to receive up to $2,750,000 in a trade. This does not represent their payroll (ie the cash outlay for player costs), which is substantially less as explained later. Payroll issues do not directly affect the moves that Atlanta can make, so I will ignore these. Of note on the sheet, Jack, Kelly, Costello, and Neal are dead money and cannot be removed. All else could potentially be shifted around.

The Mo Williams traded player exception (TPE) is not actually paid to anyone, it is more or less a coupon for a future transaction within the next year. The exception, which does count against the cap, can be used to acquire an existing contract through either a trade or a waiver claim. It cannot be combined with any other exceptions or players, so Atlanta is limited to acquire a contract(s) of no more than $2,294,500 with the TPE (the CBA allows a $100,000 buffer). A TPE can be fairly valuable as Cleveland technically acquired Kyle Korver through a TPE from an Anderson Varejao trade. Cleveland also generated two additional TPEs: one for Mike Dunleavy Jr and one for Mo Williams. Oh and Kyle Korver was originally acquired by Atlanta through a TPE that stemmed from the Joe Johnson trade.

A nice succinct explanation of the subsequent Mo Williams trades can be summarized with one tweet from Albert Nahmad, an excellent salary cap resource:

Trade Issues

As Atlanta possibly looks toward making more trades, there are a few restrictions to discuss of varying complexity. One of the simplest restrictions is that a player cannot be traded for at least 3 months after signing as a free agent. Gary Neal, or any subsequent signings, cannot be traded during this season since the trade deadline is February 23rd.

Next, there’s a section in the CBA which allows a player on a one-year contract, that would attain Early Bird or Bird Rights at the end of the contract, to have veto rights. This is because of a strange quirk where said player would lose Early Bird or Bird Rights if traded while on a one-year contract. Pragmatically this implies Kris Humphries has a no-trade clause in his contract. Any trades involving his $4 million expiring contract needs the approval of Kris, so keep this in mind if you are playing arm-chair GM.

Dennis Schröder

Dennis Schröder is off the trade market and that’s because he signed his 4-year contract extension on October 26th. I detailed this possibility way back in before the 2016 off-season began and Dennis is under a 6 month trade restriction, which pushes beyond the trade deadline to April. Technically, Atlanta can still trade Dennis before the Cap Year turns over in July. As soon as the Atlanta season ends, Atlanta can begin making trades of any non-expiring[1] contracts which creates the possibility that Dennis is traded. This is a slim chance because Dennis is currently “Poison Pilled” and his outgoing salary for Atlanta would be $2,708,582 while any team receiving him counts his salary as $12,941,717 (the annual average of his future salaries, ignoring unlikely bonuses). This extra complication makes it extremely unlikely that Dennis is traded -- if ever -- until at least the 2017 off-season.

Please keep in mind that I am only referencing contracts and not player quality/fit. I aim to inform the Atlanta fans to allow them to supplement their opinions on team building to reach a conclusion on what the team should do. In no way am I suggesting a trade or discouraging a trade.

Mike Dunleavy Jr

Dunleavy can be traded, but his contract can only be used in a one-for-some trade which brings back at most $7,356,250 in salaries. Generally, contracts can be aggregated/combined in a trade which allows a team to acquire the total outgoing salary plus somewhere between 125% and 150% of this amount. An exception to this is if a contract has been acquired via trade within the past two months. For Mike, this means he cannot be aggregated until after the Atlanta season ends.

There’s an added complication with Mike as it relates to the new CBA. When the 2017 begins, his 2017-18 salary is only guaranteed for $1,662,500 of his $5,175,000 salary — it becomes fully guaranteed on July 1st. This might imply that Mike would only count as a $1,662,500 contract once the Atlanta season ends, thus restricting the trade options. I say might because the new CBA description on this issue is slightly ambiguous:

The new CBA does not go into effect until July 1st, so Atlanta will likely avoid this added complication. But it’s still interesting to keep an eye on for any future transactions.

Tiago Splitter

There are no trade restrictions on Tiago, but he does pose a bit of an interesting issue that I should explain. You see, Tiago hasn’t played since January 31, 2016 which entailed the remaining 33 regular season games. As of today, he’s missed 78 consecutive regular season games. This isn’t ideal for basketball purposes, but it does mean that Atlanta’s budget is a bit healthier because of insurance -- under the likely assumption that Tiago’s contract is insured. You see, after 41 consecutive regular season games missed due to injury, insurance begins to pay for 80% of the associated salary for all remaining games missed (this isn’t in the CBA, so we must take Larry Coon’s description as our reference point):

To date, Atlanta has paid $1,549,390 on Tiago’s base salary of $8,250,00. Insurance has covered $2,978,049 while $3,722,561 remains to be paid. Tiago’s game salary is $100,610, so until Tiago returns Atlanta pays $20,122 per game and insurance covers the rest ($80,488). Once Tiago steps onto the court, the counter resets and Atlanta no longer recovers insurance payments. Might this partially explain the cautious approach from the organization in bringing Tiago back?

Regardless, I bring this up because Tiago’s contract -- with insurance coverage -- might be valuable to a team in danger of not reaching the salary floor. The penalty for not reaching the floor is to pay the balance to the rest of the team, but Tiago would count $8,550,000 (there’s a caphit of $300,000 added due to a trade kicker already paid by San Antonio) but his cost is only $20,122 per remaining game he misses. Financially speaking, he’s a great contract to have if he fails to play.

As a small closing note, Tiago is hardly the first time Atlanta has encountered insurance on a contract. This most recently happened when Al Horford tore his other pectoral muscle which left him sidelined for 53 games in the 2013--14 Season. Before that there was Craig Claxton[2], Jason Collier (Rest In Peace), Chris Mills, possibly Chris Crawford in 2001-02 and/or 2002-03, and Terrell Brandon. The team is well-versed in insurance claims. Who’s the official insurance provider of the Atlanta Hawks? I think I just gave you a free advertisement.

[1]: Option years do not count unless exercised. As an example, Paul Millsap cannot be traded after the season because his 2017--18 season is an option. If Paul exercises his $21,472,407 option, then he could be traded because his contract is no longer able to expire during the 2017--18 season. This is what happened with the Jamal Crawford back in 2010, Jamal opted-in which allowed him to be traded for Acie and Craig.

[2]: Also known as Speedy Claxton, which wasn’t really the case in Atlanta. Injuries suck and in no way am I blaming a player for this. But I cannot reference him with his nickname when referencing his tenure in Atlanta.