Atlanta Hawks: Money matters

The league set the salary cap at $58.044 million and the luxury-tax threshold at $70.307 million. What it means for the Hawks is J.J.s salary will be more than expected, they gained some wiggle room under the tax threshold and Chill’s qualifying offer could put them in a jam. Humor me with some technicalities so I can be transparent with my math in case it’s wrong (I will update later if I figure out any of the figures are off):

In one of those weird CBA quirks, max deals are not based on the team salary cap, which is 51 percent of Basketball Related Income, but are pegged to 48.04 percent of BRI. (EDIT: reader Robert Dinterman emails to note that Projected Benefits are part of the formula and since those haven’t been made public yet these are just estimates) . For a player with J.J.’s experience, his maximum salary is the greater of 105 percent of his 2009-10 salary of $14.98 million ($15.7 million) or 30 percent of the max cap figure, which is about $16.4 $16.3 million (EDIT: this will be lower once benefits are included in formula).

So J.J.’s deal starts at $16.4 $16.3 million, with 10.5 percent raises per year, for a total value of about $124 $123.7 million. The breakdowns for following years (with rounding): $18.1 $18.01 million in 2011-12, $19.8 $19.723 million in 2012-13, $21.5 $21.43 million in 2013-14, $23.2 $23.15 million in 2014-15, and $24.89 million in 2015-16.

The league set the luxury-tax threshold at $70.307 million. Once J.J. signs, the Hawks will have roughly $65 million committed to 10 players when included Jordan Crawford’s rookie-scale deal. So the Hawks can add up to about $5 million in salaries until they must pay the tax.

That brings us to the mid-level exception, which was set at $5.765. The Hawks can sign a player to a contract with a first-year salary up to that amount or split it among more than one player, but if they use all of it it looks like they will pay some of the dollar-for-dollar tax in addition to missing out on the tax rebate money for non-tax teams.

And don’t forget about where Chills fits in all of this. If he signs Atlanta’s $4.8 million qualifying offer it will increase the payroll to near the luxury tax level. The Hawks want to get something for Chills and will try to work out a sign-and-trade. But they might also have to consider renouncing his rights lest he accept the offer at any minute and put them in a position where each additional player costs them double with the tax.

The Hawks also have their bi-annual exception available. They can use that to sign a player for up to two years and $4.3 million (it also can be split but veterans make more with the minimum).

MC

154 comments Add your comment

PD

July 7th, 2010
10:05 pm

Let the madness begin…….Hawks still got to open up the purse and pay

PD

July 7th, 2010
10:06 pm

ryan

July 7th, 2010
10:08 pm

Hey Cunningham if Shaq signs do Josh Smith& Josh Childress getting Traded.

PD

July 7th, 2010
10:08 pm

No hometown discount from JJ to create a winner. Maybe he reconsiders before he signs but that is a pipe dream. Still need a reliable bench that includes good vets and serviceable bigs

PD

July 7th, 2010
10:11 pm

There are so many good players out there the Hawks can grab. MC anyword on the Hawks next true move.

dap01

July 7th, 2010
10:15 pm

This is beginning to smell. Yeah, we get to keep JJ but we really can’t afford anything else. Who are we going to sacrifice in order to keep JJ happy.

hmmm.........

July 7th, 2010
10:15 pm

trade bibby!!!

MannyT

July 7th, 2010
10:18 pm

@MC–the good news is that luxury tax is based on your salary situation at the end of the season. If they ditch a contract in Feb 2011 all could be good. Don’t worry about salaries at start of season, just the end.

Truth-Serum

July 7th, 2010
10:19 pm

it will be interesting to see what the hawks do about there weakness at the 5 position

Michael Cunningham

July 7th, 2010
10:20 pm

@ryan: “Hey Cunningham if Shaq signs do Josh Smith& Josh Childress getting Traded.”

not necessarily. it would be tougher to trade Chills than Josh because requires S&T. i think Shaq is seeking more than the mid-level and he might get it in weak center group.

Freshmaker

July 7th, 2010
10:21 pm

@ryan: No, Smith doesn’t get traded to make room for Shaq. Shaq is a 2 year rental at best. Childress could certainly be traded, but his being moved is unrelated to the Big Aristotle.
@MC: Thanks for the constant updates man. Really appreciate all the work you’re putting into this.

Michael Cunningham

July 7th, 2010
10:21 pm

@ PD: “There are so many good players out there the Hawks can grab. MC anyword on the Hawks next true move.”

no. i think getting the league financial numbers will get things rolling. tough for them to offer deals before they were sure about the tax level. also, signings and trades can’t happen until tomorrow.

Truth-Serum

July 7th, 2010
10:21 pm

its still JJ’s team he too wants a legitimate center.

Truth-Serum

July 7th, 2010
10:23 pm

M. Cunningham to you anticipate a very busy trade/FA signing period this next week? What is your speculation on Lebron?

Truth-Serum

July 7th, 2010
10:23 pm

*do you anticipate

Astro Joe

July 7th, 2010
10:24 pm

If Joe takes $x less than the max (per year), explain to me what guarantees he has that the ASG will spend the “savings” as opposed to keeping it in their bank account? Have they demonstrated a past history that would suggest that if they have available salary room, that they will use it? It seems to me that Dirk and Pierce both took home town discounts for teams that have exceeded the luxury threshold the past few years.

JeJe

July 7th, 2010
10:24 pm

JOE GOOD JOB CLUTTERING OUR PAYROLL.

NOW WHAT TOP FA’S ARE U GOING TO RECRUIT, SEEING THAT EVERYONE IS GONE?

LOL!

Michael Cunningham

July 7th, 2010
10:25 pm

@ Manny T: easy for us to say, it’s not our money

Hawk n the Ham

July 7th, 2010
10:25 pm

MC

What is your feeling on where the Hawks are looking next? Do you think they are going to keep the frontcourt similar to last season’s roster, and go after a defensive minded guard? Or vice versa? Because it looks like they have to choose between the two, and not be able to upgrade both because of the JJ money.

Michael Cunningham

July 7th, 2010
10:32 pm

@Truth: busy for the Hawks or the league? i think there will be some signings once this first wave of guys gets their deals and the market settles down. as for LeBron, i have no clue, i’m just glad i don’t have to cover that circus.

ryan

July 7th, 2010
10:34 pm

I think Shaq is not going to have huge market because Dallas and Boston are going in different directions maybe New Jersey wants him but he is going to have to take mid level exception.

Dan23

July 7th, 2010
10:35 pm

@MC I heard it looks like J O’Neal is going to sign with the Celtics. Rumors had them as one of the teams who were looking at Shaq. Could the “contender” well dry up for him before it starts so he may come a little cheaper?

Horace

July 7th, 2010
10:36 pm

how many of yall think we can get al jefferson? I think we will have one the best young frotncourts in the league.

Realsquawk

July 7th, 2010
10:39 pm

Wait so is there no possibility Chillz just plays for the Hawks for a year. With a new coach and everything the locker room has to be a little different right?

Michael Cunningham

July 7th, 2010
10:44 pm

@Hawk: honestly, i’m not sure what they are going to do. i hope to find out more when Sund and co. come out of their caves this weekend.

as you say, it seems they have to choose one way or the other, at least as far as free agency goes. if they really want to get better, i have to think they go the trade route. but they always talk about liking their “core”, and J.J.’s re-signing is another example of how much they tend to value their own. so is Marvin–the company line still is he can get better if L.D. involves him in the offense more. so is Teague–we will develop him into the starter. so is L.D.–let’s keep the guy who knows our guys.

so are they willing to part with one of their core guys to get something back? do they consider Crawford part of the “core” or are they willing to sacrifice him to get better at another position? what about Smoove? can Sund really get useful pieces for Marvin and/or Bibby? do they want short-term rentals back or are they looking for young players? they seemingly have too many guards but Teague is an unknown, Bibby is on the decline and Jordan C. is a rook. do they bring in yet another guard? they also seem to have too many PFs, but Horford is a very good center, so do they use some of their limited resources for a bona fide center?

this is going to be an interesting summer. Sund has lots of decisions to make and he’s going to have to get creative.

J from the A

July 7th, 2010
10:46 pm

Counting JJ and Jordan Crawford, the Hawks have 10 on roster. So, the Hawks will need to sign at least two more players, right? What’s the chances that the ASG will be willing to go into the Luxury Tax in order to ensure that both of these last two players are actually quality players? I am thinking something along the lines of spending the mid-level exception on a decent center and the bi-annual on someone along the lines of the players you suggested in the earlier blog post (or visa-versa).

Or do you think it’s more likely that ASG will opt for less expensive (vet minimum guys?) to fill the remaining roster spots.

Grandad

July 7th, 2010
10:47 pm

Shaq now listing SA Spurs # 1 choice.
Hawks as co-# 1 choice.(whatever that means)
Wants two yr. contract:
In order to win title, + have a farewell tour, 2nd yr.
Boston not interested:
says “Shaq would mess up their chemistry” *[for nc]
*I like Boston’s approach.
**Quetionable whether SA has interest???
***Shaq’s fishin’!
****let him fish in Clipper-land.

If Childress is S&T’d then we don’t have to take back
Matching sal., correct?

*my opine:
Mid-lev & bi-annual, get the best “player” for ea. one.
Don’t split ‘em up. Talent over #’s.
Fill roster wi. Sy, Gladyr, & Mario. [11-13]
The 1st ten need to be the best we can find.

Michael Cunningham

July 7th, 2010
10:49 pm

@Dan23:” @MC I heard it looks like J O’Neal is going to sign with the Celtics. Rumors had them as one of the teams who were looking at Shaq. Could the “contender” well dry up for him before it starts so he may come a little cheaper?”

yeah, i saw JO to Boston or Denver. Shaq will still have options, but i was talking to another hack the other day and we came up with this list of teams Shaq might accept (Boston was on the list but let’s eliminate them now):
Hawks (he’s already told friends he’s open to it)
Spurs (he likes Popp, who also likes him)
Mavs (he likes Cuban, who loves him)
whichever team Bron ends up on, if they have the means to pay him

we decided he can’t go back to Lakers, Heat or Suns because he burned too many bridges. same goes for Stan Van in Orlando. so right now i would say he’s down to Hawks, Spurs, Mavs and whichever team gets LeBron.

ryan

July 7th, 2010
10:49 pm

Hey Cunningham i still think Shaq will sign with Hawks and i also think that Jordan Crawford might be the steal of the draft.

Section 303

July 7th, 2010
10:49 pm

Any of you guys watch the Euro-league finals on NBATV, back in May? Childress is still Childress. I always thought he was a pretty good player. He still is just a pretty good player. Nothing more, nothing less. I think, since Chills does not want to be here anyway, the Hawks should just let him go then. Doubtful they will get much for him anyways.

I think they should just let him walk and move along with the summer. Unless, of course, I’m wrong and another team really has something to offer for him. In that case, do the sign-and-trade, of course.

aaron

July 7th, 2010
10:50 pm

first priority should be to get a legitimate large center- at least 6′11″ long, rebounds blocks shots, plays good defense- we do that and we are a champ contender- also it would give us more flexibility- cuz then we could look at trading josh smith- not saying we should but we could figure out his value on the trade market

do u agree MC?

Michael Cunningham

July 7th, 2010
10:51 pm

@ J From the A: they need to sign at least three more to get to minimum of 13. word is ASG is willing to pay some tax for the “right player(s)” so if they find one or two they presumably will do it. we’ll see how it plays out. but if they fill out the roster with minimum guys and try to sell it as an improved squad i don’t think the customers are going to go for it.

Michael Cunningham

July 7th, 2010
10:53 pm

@Fresmaker: “@MC: Thanks for the constant updates man. Really appreciate all the work you’re putting into this.”

thanks, trying to do my thang. the traffic has been very good lately, so i ‘ve just been trying to deliver.

DMR

July 7th, 2010
10:53 pm

The signing of Joe Johnson to Kobe/LeBron type money is absurd. When Johnson started talking about going to New York and making up the difference with endorsements, the Hawks should have known he was delusional. Unfortunately for the fans, the ASG is more delusional than Joe Johnson. Would the Hawks have taken a step backward without Joe Johnson? Sure. Would it have been a temporary setback? I believe so. Instead, they took a very narrow and short sighted approach. We will see the Miami Heat…be fair, be good, win a championship, slip backwards, and then propel themselves pas the Hawks as many teams will. All the while the ASG is hoping fans are too stupid to realize that spending money and spending money wisely are two very different things.

Michael Cunningham

July 7th, 2010
10:55 pm

@ryan: “Hey Cunningham i still think Shaq will sign with Hawks and i also think that Jordan Crawford might be the steal of the draft.”

you could be right about both. this is the time of the year for optimism and there’s nothing wrong with that.

Michael Cunningham

July 7th, 2010
10:55 pm

@aaron: your reasoning is sound.

UGA

July 7th, 2010
10:55 pm

Is there a free agent big out there that guarded Howard ok?

I think Joel Anthony may have. Kwame Brown is a big boy and I still like Josh Boone or an Etan Thomas.

I liked the ideas in the last blog. Our perimeter D is very poor and must be improved. With having Mo, Carney may be the most realistic choice in terms of minutes.

J from the A

July 7th, 2010
10:56 pm

Why would the Hawks want to trade Josh Smith? To keep Horford happy?

As MC mentioned, the Hawks ownership loves their “core.” Josh is definitely a part of the “core.” Plus, Josh is a phenomenal athlete who still has a huge upside. You don’t trade someone like Josh for anyone less than a bona fide star, and I am not talking about a bona fide star who is coming off injuries. Any deal involving Josh would have to be one that gave the Hawks a huge plus side without it being risky.

UGA

July 7th, 2010
10:57 pm

Ronny Turiaf has got to available in a trade with all of these big men the Warriors have.

GMAN013

July 7th, 2010
10:57 pm

MC,

Would you trade Smith and Willams for Gerald Wallace and Tyson Chandler?

Michael Cunningham

July 7th, 2010
10:58 pm

@DMR: “When Johnson started talking about going to New York and making up the difference with endorsements, the Hawks should have known he was delusional.”

it was the Knicks who were saying that to J.J. i’m still not sure how much J.J. was really considering going elsewhere once Hawks offered the max. all i heard through the whole process was they were working out contract details. but reporters i respect were saying different things. so it’s hard to know exactly how hard he looked at other teams. i will of course ask him when i finally get the chance.

aaron

July 7th, 2010
10:59 pm

i agree the only two scenarios that i would give up josh would be if we got chris paul or al jefferson- which may be possible but its a stretch- if we did get a center i think josh would have to come off the bench

extremus

July 7th, 2010
11:01 pm

Wow, all that money (over A TENTH OF A BILLION DOLLARS) to resign one guy who verbally dissed Atlanta fans just to keep basically the same roster intact that got utterly humiliated a few weeks ago. Thinking “long-term” or not, that’s just a bizarre, stupid way of doing business; the Hawks are no better off than they were at the end of last season and, let’s not kid ourselves, they’re not going to add any pieces of enough caliber to make a difference now. The NBA basically lost my interest once I realized that any given year maybe three or four teams had any real shot of winning a title; all the other 12 or 14 playoff teams are there to give fanbases the illusion their teams are actually going somewhere. It’s a bad joke and a broken, unbalanced league with no real drama in most matchups. And like every year before, come 2011 the Atlanta Hawks will be one of those teams on the outside of the elite three or four, hence the city’s reluctance to grow any sense of enthusiasm.

Michael Cunningham

July 7th, 2010
11:02 pm

@UGA: Joel Anthony is a really good post defender for a good price. that’s why the Heat extended him a qualifying offer even though it kind of screwed with their cap.

J from the A

July 7th, 2010
11:04 pm

Thanks MC. 3 more players … hopefully, that means at least two quality players (and, obviously, at most one “space filler”).

If we can get two more quality players, I think I really like the chances the Hawks have of being a contender. If you take last year’s team, assume at least some improvement out of the younger Hawks, assume the vets’ contributions stay steady, and add quality depth, then there is no reason the Hawks cannot be a contender. Of course, there a couple of big assumptions in there and the big “if the Hawks will add quality (i.e., near starting level) bench players.”

Grandad

July 7th, 2010
11:05 pm

UGA – I like Josh Boone as well. [rotation player]

David Lee S&T to Warriors…..RUMOR !!!
*Turiaf supposedly to Knicks along with A. Randolph.
Once again everyone waitin’ on LeBron,
to see what he’s gonna do.

Michael Cunningham

July 7th, 2010
11:07 pm

@GMan: doubt charlotte would do that one. they love Wallace there.

jojo sunshine

July 7th, 2010
11:08 pm

Trade Bibby and Marvin Williams and if we can sign Chill then put him in the mix. So that is 6 million (Bibby), 7 million (Marvin), and another 4 million for Chill. That is 17 million. That could definitely get us some talent. Trade with Memphis for Mayo, Thabeet, and Marc Gasol. I would definitely rather have Rudy Gay but I don’t think Memphis will trade their best player. But crazier things have happened. Man I would love to see Teague at the point JJ at the 2, Rudy Gay at the 3, Smith at the 4 and Horford at the 5. That would be match up problems for any team in the league.

jojo sunshine

July 7th, 2010
11:12 pm

The Hawks could also trade Josh Smith a future draft pick and cash considerations to New Orleans for CP3. Now put CP3 at point with my last post and let teague be his back-up. Our starting five would be title contenders now.

AJGREEN FAN

July 7th, 2010
11:12 pm

What’s also left to be considered is the decision the team must in regards to J. Crawford. For instance, they are now in the same position with JC as they were last year with JJ (granted JC will not come close to commanding max dollars, though technically his Bird rights are traded with him). But the organizational decision must be made this summer as to what to do with JC because he is too to let walk as an UFA next summer and get nothing in return. My guts says, they make an offer later this summer. He and his agent don’t accept at that time (like Arn Tellem and Joe did). If Hawks are not in top 4 or 5 in East be Jan/Feb 2011, he could be traded before the deadline.