Please explain 1 and 2 year Bird Rights Limits

[HurricaneKid]

There is a RealGM article about the difficulties ATL is going to have signing both Millsap and Carroll.

Teams can go over the cap to re-sign their own players, but teams have a reduced version of that right for players coming off one and two-year deals.

They made it sound like ATL was far more limited to keep their own players than I thought they would be. I know there were limits on 1 year deals... But 2 yr deals as well? How limiting is this?

Thanks!

[Kaiser30]

After two years, teams don't have full but only Early Bird Rights meaning that they can re-sign the player for either 175% of his previous salary (not more than the max) or 104.5% of the average salary whichever is greater.

So in case of Millsap and Carroll, the Hawks can only offer 16.625 to Millsap and 5.8 (in this case 104.5% of the league average salary) to Carroll without needing cap space. Difficult circumstances in order to re-sign both of them.

Including cap holds, the Hawks are currently set at around 54 M. Best possibility to keep both is handing out a nice contract to Carroll and then convince Millsap to sign for 175% using his Early Bird Rights in order to exceed the cap. But if Millsap wants his big payday, the Hawks will most definitely need to dump one or two of their bench players in order to keep their starting five.

[DBoys]

I'm not convinced ATL has a problem. In rough numbers, it appears they could have room to offer Carroll up to $13.9M starting salary, while offering Millsap up to the max? Is that not more than enough for each player?

[Kaiser30]

There are already rumors out there that teams like the Knicks or Lakers could offer Carroll a max contract.

In the end, it depends on how much both would like to stay with the Hawks. But it is definitely not helpful that the Hawks don't own their Full Bird Rights and therefore could experience cap issues.

[DBoys]

There are already rumors out there that teams like the Knicks or Lakers could offer Carroll a max contract.
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There are rumors that LA or NY is going to offer EVERYONE a max deal this summer.

Since they are so close already (less than 2M short of having max room), I think ATL could find a way to match a max deal if they had to, but would they want to? To me the real issue is whether he's worth that much or not (I have my doubts) and how much ATL would want to pay, if they could, when their top salaries have been Horford (12M) and Millsap (9.5M).

[Kaiser30]

There are rumors that LA or NY is going to offer EVERYONE a max deal this summer.

Since they are so close already (less than 2M short of having max room), I think ATL could find a way to match a max deal if they had to, but would they want to? To me the real issue is whether he's worth that much or not (I have my doubts) and how much ATL would want to pay, if they could, when their top salaries have been Horford (12M) and Millsap (9.5M).

I have just read a relating post on twitter:

Executives/agents expect free agency to be crazy this summer, with cap rising next year. Deals will seem crazy (but make sense in long run).

I think DeMarre will be one of those guys and I think the Hawks shouldn't hesitate to pay him. We are in a transition period now and guys who are under contract will more often than not be underpaid in relation to those who are able to sign a new contract. Carroll's max would amount to 15 M. That means 15% of the increased cap in 2017. 15% under the current cap are 10 M.
I think 10 M now would be a fair price for Carroll. As will 15 M be from 2016 onwards. So in the longterm it's affordable to offer Carroll a huge contract this summer.

I agree that the Hawks will find a way to make it happen if both Millsap and Carroll intend to stay.

[DBoys]

If you think he's worth 15% of the cap, then a max deal now will overpay him considerably over the term of his contract. Over the next 3 years with a total expected cap of 264.1, if he's worth 15% (and that sounds fair-to-generous to me for a starter who scores about 12 a game) he should get 15% which would be 39.6M.

That takes a deal starting at about 12.25M. A max deal starting at 15.7M is an overpay of about 30% more than his value.

[Kaiser30]

If you think he's worth 15% of the cap, then a max deal now will overpay him considerably over the term of his contract. Over the next 3 years with a total expected cap of 264.1, if he's worth 15% (and that sounds fair-to-generous to me for a starter who scores about 12 a game) he should get 15% which would be 39.6M.

That takes a deal starting at about 12.25M. A max deal starting at 15.7M is an overpay of about 30% more than his value.

As I said, 15 M is a fair price from 2016 onwards. Of course he will be an overpaid player next year (again, as I said, 10 M would be his fair price under the current cap and due to the fact that the cap doesn't rise significantly for next season, the current cap is basically also the cap for 2015-2016). Over the following 3 years, the cap will in aggregate amount to something around 300 M. 15 % and we are back at 15 M per year.
To conclude, he is an overpaid player in 2015-2016 but fairly paid in the following 3 years. So all in all, you swallow that one year in order to keep him for his value later. DeMarre isn't a max player but what Bill Simmons calls a "market max player" because of how the cap increases in 2016 and 2017.

And you don't pay Carroll for scoring in bunches. Essentially, he gives you defense and a consistent threat from downtown who spaces the floor. He will never be a go-to-guy but those players will get paid up to 30 M per year from 2016 onwards.