Photo Credit: SB Nation

Intro

Atlanta was one of the most fascinating teams this season with their assist- and motion-heavy offense. Unfortunately, due to postseason injuries and running into someone named LeBron James, they did not get the opportunity to reach their ultimate goal and compete for an NBA title. This offseason two of their best players, Paul Millsap and DeMarre Carroll, are unrestricted free agents who will be highly sought after in the free agent market. Atlanta could face some difficulties in re-signing both players and improving their roster with other teams’ free agents, even though they only have $42.7M in committed salaries next season and the cap is projected to go up to $67.1M (Note: All calculations below assume this number is the 2015-16 salary cap). Much of this has to due with Bird Rights and Carroll’s drastic improvement over the life of his previous contract.

Bird Rights

A quick primer on Bird Rights, though for more in-depth coverage you should look to Larry Coon’s CBA FAQ or the CBA itself (Article VII, Section 6): Bird rights allow teams to go over the cap to sign their own free agents, but there are three different categories. Full Bird rights vest when the player has been with your team for at least three seasons (or has been under the same contract for at least three years and you acquired them via trade). Full Bird rights allow you to sign your Bird Free Agent up to their max salary, even if you are already over the cap. Early Bird rights vest when the player has been with your team for at least two seasons (or has been under the same contract for at least two years and you acquired them via trade). Early bird rights allow you to sign your Early Bird Free Agent up to the greater of (i) 175% of the final year of his prior contract and (ii) 104.5% of the average player salary in the prior season. Lastly, there are Non-Bird rights which vest after the player has been with your team for one year and allow you to sign your Non-Bird Free Agent to up to 120% of the final year of his prior contract.

Atlanta holds the Early Bird rights for both Millsap and Carroll. With Millsap this may not be a problem because he made $9.5M last season. Granted, we don’t know what market values will be given the coming cap spike, but it’s probably safe to assume Millsap will make less than $16.625M next season, the maximum Millsap can sign for using his Early Bird rights. Carroll, on the other hand, only made $2,442,455 last year, meaning Atlanta can, at most, sign him for $5,885,440 (based on estimation of 2014-15 average player salary x 104.5%) next season using his Early Bird rights. Which doesn’t seem like too bad of a raise except that his market value could very likely reach eight figures.

Atlanta’s Financial Picture

Atlanta traded away their first round pick in this year’s draft and acquired Tim Hardaway, Jr. This means they don’t have to worry about any first round pick cap holds, although they did add Hardaway, Jr.’s salary. The trade, however, could have saved them as much as $600,000 if their rookie would have signed for 120% of the rookie scale for the 15th pick. Without cap holds, Atlanta has $42,714,125 in committed salaries. Atlanta has $21,978,217 in cap holds for their free agents. This gives the Hawks $64,692,342 in salaries plus cap holds. If you include exceptions (Atlanta has the Mid-Level available and a trade exception from Adreian Payne), Atlanta is at $72,011,662 in cap commitments for the summer, at least at the start of free agency.

Of course that would all but eliminate Atlanta in the chase for Carroll in free agency, but the Hawks are not bound by those numbers, at least not entirely. First, Austin Daye and Mike Muscala have fully non-guaranteed deals and they can be waived. Second, they can renounce most of their free agents and both of their exceptions, clearing nearly $16M in cap holds and opening up cap space (assuming they keep Millsap’s cap hold in order to keep his Early Bird rights and sign him after other free agents have taken up their cap room). Luckily for Atlanta, Millsap and Carroll are their only “must-sign” players. Their other free agents include Pero Antic, Elton Brand, and John Jenkins. Antic is the only one the Hawks may want to keep given how many minutes he contributed this season, but we’ll come back to him.

So what does all of this mean? This means Atlanta will have to renounce Carroll in order to re-sign him at his projected market value (Note: Renounced players can be re-signed by the renouncing team, but only with cap room or an available exception not including Bird exceptions). Let’s assume Atlanta waives Daye and keeps Muscala. After renouncing their exceptions and everybody but Millsap, Atlanta will have $53,878,341 in committed salaries to 11 players including Millsap’s cap hold, giving them $13,221,659 in cap space. If they decided to waive Daye and Muscala, Atlanta would have $13,643,842 in cap space (this includes an additional cap hold of $525,093 for having an incomplete roster of less than 12 players). I project Carroll’s market value to be anywhere from $8M-$12M, although after his solid playoff performance there were some projections having Carroll earning an even bigger contract. This means that Atlanta can try and re-sign Carroll to a contract worth the entirety of their cap room, and then sign Millsap with his Early Bird rights for any amount  up to $16.625M ($9.5M x 175%), keeping their 2014-15 squad mostly intact.

And I’m sure some Hawks fans are asking whether Atlanta can sign Carroll to only a one year deal (maybe with a player option), get his bird rights and then sign him to a larger deal in the 2016 offseason. And, fortunately, the answer is yes. If Atlanta was using Carroll’s bird rights to re-sign him, they would have to give him to a 2-year deal, not including any option years. But because the Hawks would be signing Carroll with cap space, they can structure the deal any way they want (for the most part, at least).

What Happens Now? 

So the good news is that, unless Carroll’s market value has exceeded $13.6M, the Hawks should have no problem keeping Carroll if he wants to stay. The bad news, however, is two-fold. First, other teams know the Hawks have limited options and space. Teams with cap space like the Lakers, Knicks, or Trail Blazers, could put Carroll out of Atlanta’s reach by offering just $14M, which is a perfectly reasonable number when you look at where the cap is going. Of course, because Carroll is unrestricted, he ultimately holds the keys to his future and could decide to take less money in order to stay with the Hawks. Second, even if Atlanta signs Carroll and Millsap, there really isn’t room for more roster improvement barring some trades. After renouncing all their free agents to make the numbers work for Carroll and Millsap, Atlanta will get the Room Mid-Level Exception, worth $2.814M to sign free agents. They can either sign Antic with this money or use it on another free agent, although without some luck it’s hard to find an impact free agent for that amount.

Monta Ellis To Pursue Long-Term Deal With Hawks, Heat (reports @ShamsCharania): http://t.co/6dw5hAYilf pic.twitter.com/te976S3OXL

— RealGM (@RealGM) June 24, 2015

There are also players like Monta Ellis who have shown an interest in joining the Hawks next season, and it’s an attractive situation for many other free agents. I won’t get into the basketball reasons why I do not think Monta is the best idea here, but to the dismay of some Atlanta fans, it’s basically impossible to retain Carroll and Millsap and also sign a player like Ellis. They would need to choose two of the three and hopefully land both of them. If Atlanta is willing to lose Millsap or Carroll, they obviously have space to work with. If they’re willing to lose both players, they can create max level space. The importance of their system and the fact that Carroll and Millsap are vital to that system requires a serious balancing of options by Atlanta’s front office. And with the amount of luck that needs to befall an NBA team to win the title, gambling on the unknown in free agency is an enormous risk.