The salary cap-related moves for the 2018-19 NBA Season for the Atlanta Hawks have been underwhelming to those of us who like them to make bigger, splashier moves, and that has likely been by design. The last time I updated the cap situation for Atlanta was in October and there has not been a compelling reason to update the situation for the 2018-19 NBA season. Through the trade deadline, the Hawks didn’t make any particularly large moves from a future-facing financial perspective, but we can reasonably start to look towards the 2019 NBA offseason to better understand what moves Travis Schlenk and company can make and some insight into what they might make.
As always, let’s take a look at the current cap sheet which is generously provided by Early Bird Rights and point out that we are currently estimating the Salary Cap to be $109,000,000 for the 2019-20 NBA Season. I want to emphasize that the Salary Cap will likely not be exactly $109,000,000 but we do not know if it will be higher or lower and by how much.
At this point, though, $109,000,000 is the most current estimate the NBA has released. The actual cap space for the team and associated salary cap exceptions will depend on where the Salary Cap settles, but we do not have a better projection at this point.
Going into the 2019 off-season, Atlanta will have 9 guaranteed contracts (Kent Bazemore, Miles Plumlee, Trae Young, Alex Len, Taurean Prince, John Collins, Kevin Huerter, DeAndre’ Bembry, and Omari Spellman) that will take up $55,609,270 in team salary. Add in the non-guaranteed salary of Jaylen Adams and the team has $56,926,122 in team salary over 10 contracts. If we were to start with hypothetical salary cap situations here, then we would need to add in two roster charges which would be at $897,158 a piece ($1,794,316 total), based on a $109 million Salary Cap.
If Atlanta goes into the offseason with only their current salaries, that will leave them with $50,279,562 in cap space. However, there is almost no way that the team will go in with that amount because this ignores the draft picks that the team is likely to have.
We will not know the draft picks that the Atlanta Hawks will hold for the 2019 NBA Draft until the lottery happens on May 14. We won’t even know what the odds are for the Atlanta Hawks’ picks until the end of the regular season on April 10. What we do know is that the team will have at least 1 draft pick inside the top 10 and possibly two. Keep in mind that Atlanta will receive Dallas’ pick if it lands outside of the top five.
We do need to slot in potential first round picks because they take up cap space. However, the contract value of first round picks vary based on the Salary Cap which means we have to assume the $109 million cap in our best guess to the cap space for Atlanta:
Lottery Picks Off $109M Cap
As of this writing, Atlanta is expected to finish with the fifth-worst record and Dallas with the sixth-worst. If that ends up being the picks that Atlanta receives, then the two roster charges would be replaced with $12,198,840 worth of draft picks. That would bump the team up to $69,124,962 in salaries going into the 2019 off-season.
Our best guess, including waiving Adams and paying his $100,000 guarantee, would leave the Hawks with $41,191,890 in cap space. For a bit of context, the best outcome for the Hawks would be to land the 1st and 6th draft picks which would total $15,551,040 cap hits for the draft picks and reducing cap space to $36,942,532. On the other extreme, Dallas could jump into the top 5 in the draft and Atlanta fall to as far as 9th, leaving the team with only a $4,463,640 in cap hit for the 9th draft pick but raising their cap space to $47,132,775. Given the unknowns surrounding the draft picks and any moves the team makes between now and the end of the year, this number can change significantly.
While Atlanta has had cap space in the past and utilized it as recently as last offseason, it is not typically the case that any team can go into an offseason with certainty of cap space, because free agents have cap holds which will eat up cap space. Since Atlanta will be a cap space team, we do not have to discuss the Taxpayer or Non-Taxpayer Mid-Level Exception or the Biannual Exception. The only Exception we have to point out is the Room Mid-Level Exception which should be around $4.761 million based on the $109 million cap but does not count against the team’s cap space at the beginning of the summer; rather, it kicks in once the team uses (most of) their space and gives them one extra tool to add to the roster.
At a $109 million cap, Atlanta will definitely have space for one max contract. A bit of a soap box here, but “max contract” is a player and team dependent term. For a player with 0-6 years of experience their “max” is 25% of the cap ($27,250,000); for 7-9 years of experience it is 30% of the cap ($32,700,000); and for 10+ years of experience it is 35% of the cap ($38,150,000). The team dependent aspect will be the difference between a contract being 4 or 5 years and with 5% or 8% raises.
Atlanta will definitely be able to offer any max contract. If they can move Plumlee or Bazemore without taking any salary back, then they could have two max contracts -- but keep in mind it depends on the player because two players with 0-6 years of experience ($54.5 million) takes a lot less space than two with 10+ years of experience ($76.3 million).
As of this writing, Atlanta will have three free agents this off-season in Justin Anderson, Dewayne Dedmon, and Vince Carter where they will hold Bird Rights, Early Bird Rights, and Non-Bird Rights with each player, respectively. These rights are based off of the service time with a particular team and affect the cap hold of each free agent, the potential Exceptions that the team can offer as a contract, and the raises/declines that Atlanta can offer. For Anderson and Dedmon, Atlanta can offer 8% raises/declines as opposed to the standard 5% raises/declines to which all other teams are restricted.
Anderson might be a restricted free agent, that entirely depends on whether or not Atlanta wants to tender him a Qualifying Offer of $3,625,625. However, tendering that one-year qualifying offer would keep him on their books for a $7,543,144 cap hold, which would impact their aforementioned cap space. Given how little Anderson has played this year, it would be a shock to see the team tender that qualifying offer, as it looks as though Anderson is little more than a minimum player at this point in his career.
Dedmon will enter the off-season with a cap hold of $9,360,000, which is 130% of his 2018-19 salary. This figure may change between now and the end of the year based on the bonuses Dedmon earns, but he’d have to play so poorly over the next month in order to lose out on those bonuses that it’s not even really worth considering. Depending on what Atlanta wants to do, they may elect to keep this cap hold on their books for a bit. Unlike Anderson, the Hawks can keep Dedmon’s cap hold on their books as long as they like (or until he signs with another team), which gives them more flexibility but leaves them open to him walking away for nothing.
Whether Atlanta keeps him on the books at the beginning of the summer entirely depends on whether or not they believe Dewayne has a shot at a starting salary above $9,360,000 either with Atlanta or another team that is willing to engage in a sign-and-trade transaction. His Early Bird Rights will allow the club to exceed the Salary Cap by 175 percent of his previous salary, which would be up to $12,600,000. Should Atlanta want to include Dedmon in their summer business, whether through re-signing him for up to $12.6 million or signing-and-trading him to another club, they would be wise to retain his cap hold and go about the rest of their business first, using their now-$31.8 million in space before finalizing anything with him.
Carter might be back in Atlanta but there is no reason for the team to not renounce his cap hold at the start of the off-season. Atlanta only holds non-Bird rights which would let them sign him for 120% of his previous minimum salary which would be $2,872,664. His minimum salary for next season would be around $2,561,463. I don’t venture towards opinions often, but I do not think that difference is enough to warrant holding on to Vince’s cap hold. If Carter does come back to Atlanta, it will almost certainly be on another minimum contract, so they’ll wait until the end of their summer business before re-upping with him.
At this point, it looks as though the Hawks will have significant space this summer. How much exactly will depend on where their draft picks fall and whether they choose to retain Dedmon’s cap hold, giving them a range from $28.5 million (if they got the first and sixth picks and kept Dedmon’s cap hold) to $47.1 million (if they drop all the way to ninth in the lottery, Dallas jumps up, and Dedmon is let go).