The Atlanta Hawks will be entering an underwhelming season of basketball from a wins-losses perspective. While there is certainly a possibility that they could make the playoffs, it is not likely at the moment and probably not preferable to the front office of the team.
The team appears to be more concerned with their draft position and cap space for the 2019 NBA offseason than the current 2018-19 season. Or maybe even the 2020 offseason ahead of the 2019-20 season. Honestly, no clue when the team is concerned about being competitive, but there are still issues with the current team that need to be addressed from a salary cap perspective for this season that will affect future seasons. So let’s dive in!
Currently Not Available For Trade
As of right now, the team only has 6 players that are not trade eligible: Alex Len, Vince Carter, Thomas Robinson, Cole Aldrich, RJ Hunter, and Daniel Hamilton. That is because each of them signed this offseason as a free agent and free agent signings are not tradable until December 15th at the earliest. (It’s technically the later of three months and December 15th for all free agents that were not signed with Bird or Early Bird Rights -- those guys have to wait until January 15th).
But we know that Atlanta will need to trim their roster down to 15 players on the NBA roster plus the two-ways of Adams and Poythress. The most likely candidates to be waived are Aldrich, Hunter, and Robinson as they were the last to sign and have non-guaranteed contracts. They will have to play exceedingly well for Schlenk to make roster changes to keep them and eat guaranteed salary, which is unlikely at the moment so we’ll just assume those are the ones to be waived.
Looking at the current cap sheet, we know that Atlanta currently has dead salary that will finally leave the cap sheet at the start of the 2019 offseason: Carmelo Anthony’s $25,534,253 and Jamal Crawford’s $2,304,226, both of which were the result of buyouts. Unless Atlanta reaches some extensions with players, we are certain that Atlanta will have cap space even after accounting for cap holds of all free agents, as long as the salary cap is around $109 million. In the extreme situation where Atlanta renounces the rights to all their free agents, their cap space can reach north of $50 million this offseason. But the Salary Cap will not be set until late June of 2019, so we won’t know for certain the amount of cap space until the Salary Cap is set.
While it is a near certainty that Atlanta is punting on this season, they will have an obvious trade asset in Dewayne Dedmon that they might shop at some point. Whatever team acquiring Dewayne will hold his Early Bird Rights, which are substantial enough that a team acquiring him will be able to exceed the salary cap to re-sign him starting at between $11.025 million and $12.6 million — depending on if his $900K performance bonuses are met in 2018-19. These rights will prove to make Dedmon more than a rental as he would probably garner interest around the mid-level exception.
There are less obvious trade assets in Kent Bazemore and Jeremy Lin, in that reasonable people may disagree if they are net positives or negatives on their current contracts. They are certainly movable contracts if Atlanta is so inclined to; however, this is where the team’s timeline of competitiveness comes into play.
If Atlanta is intent on jumping into the 2019 offseason with as much cap space as possible, then moving Bazemore (and Miles Plumlee) for expiring contracts may become a priority for the team. But if Atlanta thinks they should punt their space in the 2019 offseason to the 2020 offseason, then they may be willing to move Jeremy Lin to take on some guaranteed salary in 2019-2020 with an asset attached as well.
As far as creative approaches to salary cap management that Atlanta can take on this current season, there really isn’t much. The team cannot get to a position of having cap space this season — so they won’t have the option to do a renegotiation of a current contract or be able to creatively use cap space in order to re-aggregate salaries in multiple trades. They are limited to mostly straight-forward trades where they may be swapping out future salary for cap space or vice-versa. The team will not have to worry about any luxury tax issues as they are too far away from a payroll that high — although there may very well be internal budgetary restrictions that limit Schlenk’s ability to add on salary.
About the only current-season Salary Cap issues we will need to keep tabs on is the number of days Jaylen Adams and Alex Poythress have remaining on their Two Way contracts. However, there are a few issues we can address related to future cap sheets involving Atlanta.
Rookie contracts are an interesting beast thanks to former Hawks Legend Glenn “Big Dog” Robinson, who spurred the Rookie Scale to be a thing with the 1995 Collective Bargaining Agreement (CBA). A first-round draft pick will sign a contract worth a predetermined amount based on their draft position. Beginning with the 2005 CBA, these contracts are four years in length with only the first two years are fully guaranteed as the latter two years are team options. The team options are unique because they must be invoked the October 31st prior to the year in question, whereas all other types of options (player or team) are typically due in the June before a potential July free agency.
By way of example, John Collins is entering his second season and yet his third year is not yet guaranteed. The Atlanta Hawks have until the 31st of October 2018 to guarantee his third year -- which there is little uncertainty that they will exercise the option. He will also have this fourth and final year option due the 31st of October in 2019, which also seems like a certainty at this point.
The Hawks have the fourth year options on Taurean Prince and DeAndre’ Bembry due October 31st. Prince’s is for $3,481,986 while Bembry’s is at $2,603,982. Usually, it is big news when a team option is not picked up, as it rarely happens even when teams may be frustrated with a players progression.
The last Hawks draft pick to not have a team option picked up was Adreian Payne -- but he was traded during his rookie season to Minnesota so does he really count? The last time the Hawks officially declined a team option on a rookie contract was John Jenkins in 2014. Other notable declined options for the Hawks were Jared Cunningham in 2013 (they didn’t draft him though and was always salary fodder), Acie Law (actually declined by Golden State), and Shelden Williams (actually declined by Sacramento). All of this is to say, we shouldn’t expect either player to have their team option declined but it will be big news if either is.
Rookie extensions can only occur for players on the fourth year of their rookie scale contracts (i.e. first round draft picks) and must be completed before the start of the regular season on their fourth year. Currently, Atlanta only has one player in this category and that is Justin Anderson who is on a $2,516,048 contract this season.
This offseason, Anderson will carry a cap hold of $7,548,144 in the event that the team wants to re-sign him to a contract in excess of this amount. However, if the team wants to additionally make him a restricted free agent they’ll need to tender him a qualifying offer of at least $3,625,625 (it will be $5,173,130 if he starts more than 40 games or plays at least 2,000 minutes this season).
Signing a player on their rookie scale contract to an extension has two large issues. For one, there is cost-certainty for the 2019-20 and beyond seasons since those salaries will be agreed upon at the time of the extension. A hypothetical extension with Anderson would replace his cap hold in 2019-20 with the actual salary, which might give Atlanta more cap space or less depending on what you think the salary would be.
The other issue with a rookie scale extension is that the “Poison-Pill Provision” (not an actual term, it was coined by Larry Coon) kicks upon signing. The provision is an added complication for any trade involving Anderson between the time he signs the extension and when the extension kicks in on July 1, 2019. For most trades, the current salary for a player is used in verifying if the salaries “match” for a trade based on the CBA’s traded player exception.
This is not the case for rookie-scale extensions because the extension will typically result in a large increase in salary which could potentially be a loophole for teams to rapidly increase their team salary well above the cap. Because of this, Anderson would count at his average salary over his current salary and extension for any team receiving him, but Atlanta would consider his outgoing salary at his current $2,516,048 salary. This makes trading Anderson after an extension difficult, but not impossible.
All of this to say that there is really no reason to expect Anderson to agree to an extension or Atlanta to offer one at this moment. Atlanta would want to sign him to an extension to avoid any upside risk where Anderson becomes much more costly than what they could currently sign him to. But the upside risk for Atlanta is mitigated as they will hold Bird rights on him with the cost being his $7.5 million cap hold on their books.
Even if Atlanta thought Anderson would be worth a contract in excess of $8 million, they can simply wait and sign him last after making offseason transactions. And all of this talk assumes that Schlenk and Pierce know how well Anderson fits with the team, which is probably be the biggest reason as to why Anderson likely will not come to an agreement on an extension.
In the NBA, a non-rookie scale contract which is for at least three seasons can be extended in certain circumstances: after the second anniversary of its signing if it is for fewer than five seasons or after the third anniversary of its signing if it is for five or more seasons. An extension can start at up to the higher of 120 percent of the previous season’s salary or 120 percent of the average NBA salary and can only make it so the entire contract lasts for the next four seasons (including the current).
There is no bottom limit to the salary except the minimum salary. An extension cannot reduce a currently agreed upon season’s salary — even if it is technically an option — although a team can increase a current salary if the team has salary cap space. There’s a couple of other caveats, but for our purposes we know that there are three players eligible for an extension at the moment: Kent Bazemore, Jeremy Lin, and Miles Plumlee.
Lin is currently eligible for an extension to start at $16,522,105 in 2019-20 and last until 2022-2023 for a total of a little more than $74 million. Plumlee can have an extension start at $15 million in 2020-21 and last until 2022-2023 for a total of $48.6 million. Bazemore has two options: if he declines his player option he can sign an extension starting at $21,707,864 in 2019-20 and last until 2022-23 for a total of $97.25 million; or if he exercises his player option he can sign an extension starting at $23,123,594 in 2020-21 and last until 2022-23 for a total of almost $75 million.
An extension agreement can be reached at anytime up until June 30, 2019 for Lin; for Plumlee it is June 30, 2020; and for Bazemore, it depends on his he exercises his player option — June 30, 2019 if he does not or June 30, 2020 if he does. So we may have a long period of time to toss around ideas related to extensions and we’re not likely to hear about extension talk at the moment. But it is good to at least know it’s a conversation that could be had for the season.