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What a Paul Millsap max contract would look like for the Atlanta Hawks

Here is how a max contract offer for Paul Millsap would affect the Atlanta Hawks' salary cap picture for next season.

Oklahoma City Thunder v Atlanta Hawks Photo by Kevin C. Cox/Getty Images

This trade-deadline appears to have been one of the busier ones for the Atlanta Hawks in recent memory. Not since they traded for Kirk Hinrich the first time, in 2011, have we seen a rotation player join this team. I don’t know if this is a good or a bad thing, but it’s something.

The team first traded away Tiago Splitter, Miami’s 2017 second round pick (top 40 protected, which then is unprotected in 2018), and swap rights for Atlanta’s 2017 second round pick (Atlanta will end up with Golden State’s 2nd round pick) for Ersan Ilyasova and a $150,000 trade exception. The team followed this up by trading Mike Scott, the rights to Cenk Akyol, and $500,000 to the Phoenix Suns for a top 55 protected 2nd round pick from Phoenix that is mathematically impossible to convey at this point. It’s important to note that Atlanta will avoid paying the remaining $960,785 on Mike Scott’s contract, so the move saves the team $460,785.

In addition to these trades, the Atlanta Hawks announced that they agreed to “multi-year deals” with Ryan Kelly and Lamar Patterson. Atlanta, currently over the cap, only had the veteran minimum exception available to use for these transactions and this exception has a limit of 2-years per contract. This kind of wordplay reminds me of a Flight of the Conchords discussion on the minimum number of people needed to form a gang, which is technically two.

So where does this leave the team currently? Let’s go to the cap sheet:

Atlanta’s Cap Sheet Post-Trade Deadline

Player 2016-17 2017-18 2018-19 2019-20 2020-21 Notes Cap Hold
Player 2016-17 2017-18 2018-19 2019-20 2020-21 Notes Cap Hold
Dwight Howard $23,180,275 $23,500,000 $23,819,725 - - $35,729,588
Paul Millsap $20,072,033 $21,472,407 - - - 17-18 player option $30,108,050
Kent Bazemore $15,730,338 $16,910,113 $18,089,887 $19,269,662 - 18-19 player option $27,134,831
Ersan Ilyasova $8,400,000 - - - - $12,600,000
Mike Dunleavy $4,837,500 $5,175,000 - - - 17-18 gt'd $1,662,500 $9,832,500
Kris Humphries $4,000,000 - - - - $5,200,000
Thabo Sefolosha $3,850,000 - - - - $7,315,000
Mike Scott (TPE) $3,333,334 $3,333,334 - - - expires 2018-02-23
Dennis Schroder $2,708,582 $15,500,000 $15,500,000 $15,500,000 $15,500,000 performance bonuses $23,250,000
Malcolm Delaney $2,500,000 $2,500,000 - - - restricted FA $3,250,000
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 - - - - restricted FA $5,704,013
Mo Williams (TPE) $2,194,500 $2,194,500 - - - expires 2018-01-18
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 - - - - $1,471,382
Ryan Kelly $286,785 $1,577,230 - - - 17-18 team option $1,471,382
Lamar Patterson $246,956 $1,471,382 - - - 17-18 team option, restricted FA $1,471,382
Tiago Splitter (TPE) $150,000 $150,000 expires 2018-02-22
Jarrett Jack (waived) $980,431 - - - -
Ryan Kelly (waived) $418,228 - - - -
Lamar Patterson (two 10-day) $102,900 - - - -
Gary Neal (10-day) $57,672 - - - -
Matt Costello (waived) $50,000 - - - -
Total $100,214,875 $97,773,726 $61,571,092 $40,855,630 $15,500,000
Total (Guaranteed) $100,214,875 $74,638,819 $57,409,612 $34,769,662 $15,500,000

The far right column is the cap hold for the earliest date said player can be a free agent with the exceptions of Bembry and Prince, who are the only players on Rookie Scale contracts. The simple reason for this is because I have yet to fully digest the new Collective Bargaining Agreement (CBA) to say with enough certainty what their capholds will be if they complete their rookie contracts. It’s almost a 600 page legal document, so bear with me on this but I promise to have something solely related to the new CBA within the next year.

Although there is a lot of basketball to be played this season, let’s move on to a quick glance at the 2017 off-season with an emphasis on Paul Millsap.

Atlanta’s Upcoming Off-Season

With respect to the new CBA and this off-season for Atlanta, there’s surprisingly little difference from what was anticipated. Part of this is because the caphold changes won’t go into effect until the following off-season (2018) but also because there is no Atlanta Hawk which would be eligible for the new Designated Veteran Player Exception. So that’s nice to know.

This off-season has two basic options with respect to the salary cap: they can stay above it the whole time or they can try to operate below it for some portion of the off-season. Much of this decision hinges on Paul Millsap because he is the most prominently featured free agent on the team.

Paul’s Next Contract

Paul has accumulated over 10 years of NBA service (11 to be exact), which entails that he is now eligible for a maximum salary of 35% of the Salary Cap per the new CBA. Assuming a $102 million salary cap, we can expect Paul to have a maximum starting salary of around $35.7 million.

Paul’s Assumed Max Offers

Season Bird Rights Non-Bird Est. Salary Cap Est. Luxury Tax
Season Bird Rights Non-Bird Est. Salary Cap Est. Luxury Tax
2017--18 $35,700,000 $35,700,000 $102,000,000 $122,000,000
2018--19 $38,556,000 $37,485,000 $103,000,000 $125,000,000
2019--20 $41,412,000 $39,270,000 --- ---
2020--21 $44,268,000 $41,055,000 --- ---
2021--22 $47,124,000 --- --- ---
Total: $207,060,000 $153,510,000 --- ---

(Derived using values from Albert Nahmad)

As of right now, we’re talking about a maximum contract for Paul which totals $207 million over 5 years for Atlanta and $154 million over 4 years for any other team.[1] In addition, we know that the NBA has projected a salary cap of $103 million for the next season. As a bit of a note, the prudent thing to do for salary caps beyond the 2018-19 season should be set at 5% growth, which is the amount that I estimated for what the National TV Deal’s annual growth. The 5% value won’t be right, but it’s the best guess for the public.

The most important issues to discuss here is leverage and negotiations. There’s undoubtedly going to be a team in the NBA which offers Paul a max contract totaling $154 million over 4 years, although it’s unclear who will be offering and what non-pecuniary benefits they can afford to Paul. If Paul is offered this kind of a contract, it should also be built in that there’s a pretty good chance that Paul would be able to sign some sort of a contract in a potential 5th year although it’s unclear what this value would be. Pau Gasol was offered approximately $15.5 million for an aged 36 season with a player option around $16 million from the San Antonio Spurs. So there’s a decent argument that Paul might have an offer upwards of $20 million for an aged 37 year season. So Paul might have a built in idea that the competition for his services outside of Atlanta total about $175 million over 5 years.

Atlanta management knows this is the minimum offer they must match (bearing any non-financial characteristics that some team might be able to use to entice Paul or that Atlanta can leverage against him). They also know that they can offer up to $207 million over 5 years to Paul. So there’s some bounds set in negotiations. If Paul returns to Atlanta, it’s likely to be between $175 million and $207 million across 5 years. What the literal value will be is undetermined because this is a negotiation and Atlanta clearly doesn’t want to pay the full maximum value that they can pay. Hell, they just traded away the Mike Scott (and his Bird Rights) to save less than half a million and didn’t play Tiago Splitter all year in order to acquire insurance payments of $3,863,415. Atlanta is conscious of their bottom line and it’s possible that cost them Al Horford last year (and might have subsequently led to them firing their lead negotiator, but maybe he left on his own volition?).

Either way, this is a cat and mouse game that we’ll eventually see play out. Paul wants a lot of money because he’s great at basketball. Atlanta wants Paul to play basketball for them but doesn’t want to spend too much money especially in respect to their potential revenues. This will eventually play out, but let me table this issue for a bit of time and talk about the team as a whole.

Staying Above The Cap

Atlanta has the choice to stay above the projected $102 million salary cap for the entirety of the 2017 off-season. This is a costly measure financially speaking, but it may be the most fruitful from a talent perspective.

If Atlanta operates above the cap, that means they are using some-or-all of their rights on: Paul (Bird), Ersan (Bird), Dunleavy (Bird), MLE (up to $8.406 million), Thabo (Bird), Tim (Bird), Kris (Early Bird), Scott TPE ($3.333 million), Bi-Annual Exception ($3.290 million), Mo TPE ($2.194 million), and Muscala (Bird). That’s a lot of cool things they can do, and I’m not even going to try to touch sign-and-trades.

This is a topic I’ll get back to later on in the year when it gets closer to the off-season, but there’s some things which can be done.

Using Cap Space

If Atlanta ends up using cap space this off-season, then it likely means that Paul Millsap has left. I guess it could also mean that one of the Dwight/Kent/Dennis combo has been traded away for about nothing, but just crunching the numbers it doesn’t seem feasible that Atlanta can retain Paul and have cap space ... this says nothing about Thabo or Tim.

I always find discussions of cap space to be a bit pointless, which is not to say that cap space is pointless. It isn’t! It’s actually a very valuable resource in the NBA and is one reason why Atlanta did not lose Al Horford for “nothing” since they gained cap space, which turned into Dwight Howard.

In conclusion, well I don’t really have a conclusion for you. This is an ongoing topic that I’ll try to add on to in the future. It’s my goal to educate the Atlanta Hawks Fans, I don’t have any opinions to impart on you. I just want to let you know the options available — which is greatly under-covered within this market — and let you form your own opinion.

[1]: Two comments: 1) I’ve already railed against how “maximum contract” is a player and team dependent term, which is extremely misleading to the casual fan and 2) if you’ve heard of a 5-year $180 million contract for Paul, then it’s probably an honest mistake because the 30% max criteria category (which is not Paul) would have a contract totaling $177 million over 5 years.