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