The Hawks met with Smith's representatives this week, at which point the team indicated it was not willing to give Smith a max contract after this season, according to a source.
Smith, who will be an unrestricted free agent this summer, told the Atlanta Journal-Constitution late last month that he believes he's a max player, which would mean he'd be in line for a five-year deal worth around $94 million from Atlanta.
But the Hawks, which expect to be major players next summer in free agency or through trades, do not want to tie up that kind of money going forward.
Smith, according to a source, is prepared to move on. He has been one of the most enigmatic players in the Hawks' history, capable of incredible feats at both ends of the floor—as evidenced by his 23-point, 16-rebound performance against the Bulls in the 2011 playoffs—but also capable of driving coaches and fans crazy with his decision-making. Last month he was suspended by the team for a game for "conduct detrimental to the team," after a run-in at practice with Coach Larry Drew.
Yet the Hawks have not formally decided to trade the 27-year-old Smith, who leads Atlanta in scoring and blocked shots, and is second in rebounds and assists. Team president of basketball operations and general manager Danny Ferry is in fact-finding mode now, seeing what the market is for Smith.
The website Hoopsworld reported earlier this week that the Suns had had exploratory talks with Atlanta about Smith.
If the Hawks hold onto Smith for the rest of this season, they could still trade him this summer in a sign-and-trade deal. However, the market for such trades will begin to narrow; teams $4 million or more above the luxury tax threshold, or that would become $4 million or more above the threshold by making a trade, will be prohibited from doing sign and trade deals.
The Hawks traded for signed for eight players on the last year of their contracts this summer. Five of those players came from the Nets in the deal that sent Joe Johnson to Brooklyn last July. They can clear more than $30 million in cap room by just letting those deals expire; only Al Horford and guards Lou Williams and John Jenkins are under contract for next season.
If the Hawks let Smith walk without taking any salary back, they'd be able to clear more than $40 million off their cap.
The Hawks could be a player for free agents like Dwight Howard, who is from Atlanta, or guard Chris Paul, who famously was skipped over by the Hawks in the 2005 Draft in favor of forward Marvin Williams, taken with the second pick overall that year. But if they find they can't attract a premier free agent, they might still be able to deal Smith in a sign-and-trade for an impact player under contract similar to that which they might find in free agency.http://www.nba.com/2013/news/02/08/josh-smith-trade-offers/index.html?ls=iref:nbahpts