Atlanta Hawks: Danny Ferry looking to trade but avoid the tax

Danny Ferry didn’t make the decisions that led to the Hawks owing $61 million in salaries next season to six veteran players on a team that’s topped out in the second round of the playoffs.

But now that’s he’s Hawks GM, Ferry will have to build a roster for next season without much financial flexibility. And he will have to start doing it pretty much on the fly because the free-agent negotiating period opens Sunday, less than a week after he took the job.

“It’s a crash course, for sure,” Ferry said. “I think we want to make the best decisions possible in the short term. We want to make right decisions, whether it’s a trade, whether it’s free agency. But especially trades.”

The trade market remains the best way for the Hawks to make significant additions to the roster (which of course means they’d also have to make significant subtractions).

They continue to get a lot of calls about Josh Smith but the impetus for pursuing Pau Gasol came from Rick Sund and Ferry so far hasn’t taken that baton. Ferry hasn’t even had a chance to fully assess the roster or meet the players.

Smith has a lot of value as a talented and productive player on a reasonable contract that expires after next season. Al Horford is an attractive piece, too, because he’s an All-Star big man locked up for four years and $48 million. Good luck dealing Joe Johnson with four years and $90 million remaining on his contract.

(Aside: I’ve heard some of my blog people wonder if Ferry will be “allowed” to trade Marvin Williams. Please accept that the Hawks have tried to trade Williams for at least two years and no one is biting. That shouldn’t be hard to do since you don’t want him on your team at his salary, either.)

If the Hawks don’t make a trade, then they’ll have to find some value on the free-agent market and perhaps get some contributions from unheralded rookies.

After signing first-round draft pick John Jenkins, Atlanta will have roughly $62 million in salaries committed to seven players. If second-round pick Mike Scott makes the roster and sticks for the year, that’s another $473,604. Ferry said he hasn’t decided if he will extend a qualifying offer to Ivan Johnson; if the Hawks do so and Johnson ends up playing on that deal, add about $1 million.

That’s about $63.5 million dollars for nine players. The roster minimum is 13 and the maximum is 15. The salary cap next season will be no less than $58 million. The luxury-tax threshold last season was $70.3 million and won’t rise significantly unless the players and league agree on a big increase in projected BRI for next season.

So, basically, the Hawks likely will have somewhere in the neighborhood of $6.5 to $9 million of room below the tax line to sign four to six players. Ferry said he’s authorized to spend into the tax but would like to avoid doing so.

“I want to build a roster that has some flexibility to it,” Ferry said. “Ownership has told me when appropriate, that when going over the tax makes sense as far as making us a better team, that is something we would be allowed to do. I want to use that judiciously, though, when you are given that opportunity to do so.

“In this new CBA, some of the challenges when being over the tax as far as trade restrictions as far as exceptions available to you going forward have changed the spending habits in the NBA. Would I think over the next few years we would go over the tax? I think there is a good chance but, again, I want to do that in a judicious manner.”

Ferry is talking about the more-punitive tax penalties that begin in 2012-13. Teams over the threshold will pay a higher tax; will have a smaller mid-level exception and no bi-annual exception; can’t take as much salary back in trades; and won’t be able to receive a player in a sign-and-trade if they are $4 million or more above the tax level.

Translation for the Hawks: Ferry can use the mid-level and bi-annual exceptions and make the Hawks tax-payers again but he’d better be sure he’s signing players that put the Hawks over the top.

“If the belief was it was going to make us a lot better, those things are on the table whether now or later in the year,” Ferry said. “The dollar amount certainly is a parameter as it relates to the tax. You’d prefer not to go over it. But right time, right trade, right thing [then] ownership, Bruce Levenson, has told me that if it’s appropriate and right and it would really make a difference we would have the ability to do so.

“I want to say with that I don’t think it’s always the right thing to go over the tax because of the rule and because of the way things operate. Most teams are never one player away. I think that’s a mistake sometimes teams make. We are going to look at opportunities and make a decision.”

The opportunities will be there for the Hawks on the trade market. There’s a sense of urgency because free agency opens in a couple days but Ferry said he plans to stay patient.

“Every player we may like, [the process] will take its own pace,” he said. “We will have some control over that but the players will have some control over that, as well. So we are going to make our calls on July 1, we are going to explore every option and hopefully we can make good decisions.

“Honestly, last year–I know I keep crediting Rick–but I thought they did a pretty nice job filling out their roster from where they were. Hopefully we can find avenues to do as well, [and] hopefully even better.”

Michael Cunningham, Hawks beat