He did so knowing that his risky decision meant that the versatile Smith could walk at season's end without anything coming in return to Atlanta.
And frankly, he couldn't look any wiser for it.
If Ferry decided to relinquish all of Atlanta's team options, he'd have just three contracts on his books for the 2013-14 season: two-time All-Star Al Hoford, perennial Sixth Man of the Year candidate Lou Williams and rookie John Jenkins. In other words, $18.5 million well spent.
The Hawks don't have the kind of pull around the league to attract the biggest names on the free-agent market. That won't stop Ferry from pursuing them, but it's highly unlikely he pries either Chris Paul or Dwight Howard out of Los Angeles.
But Atlanta's impressive showing (32-23, fourth in the Eastern Conference) during what most scouts anticipated being a rebuilding season, highlights the fact that this team isn't in dire need of adding a superstar.
There's a talented core in place, and one that gives Ferry a plethora of options to build around.
Before Ferry can attack the free-agent market with reckless abandon, he'll need to make some decisions on his own free agents.
One of them is a no-brainer. Fourth-year point guard Jeff Teague has enjoyed a breakout season in his contract year, averaging career highs nearly across the board and an impressive shooting slash line of .458/.380/.882. And he's only gotten better as the season has wore on. In his last 13 games (eight of them Hawks wins), Teague has averaged 18.5 points, 8.8 assists and just 3.2 turnovers per game.
It's safe to say the impending restricted free agent is in line for a major pay raise, either from the Hawks outright or through them matching an offer that he finds from another team. He could be headed for a similar deal secured by Memphis Grizzlies point guard Mike Conley, who inked a five-year, $40 million deal in 2010.
Ferry's next decision won't be quite as easy. Whether or not he chooses to re-sign Smith determines his next course of action.
There are so many reasons to support bringing him back. He put himself in elite company by averaging better than 17 points, eight rebounds, four assists, two blocks and one steal—his own. No other player in the league has met all of those statistical categories this season.
But with Smith, there's always good with the bad.
His motor and focus have come into question over his nine NBA seasons, which isn't something teams want out of a franchise player. Not to mention he's never made himself a fan favorite with his shot selection.
But the more ominous threat presented by Smith is the fact that he considers himself worthy of a max contract. Whether or not he can convince Ferry he's worth it may not even matter. As long as Smith can convince one general manager he's worth it, Ferry may be pressured to match the offer.
Even if Ferry works out new deals for Teague and Smith, he'll still have the bankroll to find more parts to complement his core. Kyle Korver (46.4 three-point percentage) has made the strongest bid to stick around, but players like Devin Harris, Zaza Pachulia and restricted free-agent Ivan Johnson all hold value if Ferry can keep their contracts reasonable.
Outside of Howard and Paul (both of whom appear likely to stay put), this free-agent crop may make its mark more for its depth than its star power. This should be music to Ferry's ears.
Regardless of what he does with his own players, he needs to find more scoring from the wing. Williams was one of the few Atlanta guards capable of consistently creating offensive looks, but he's a question mark for next season after tearing his ACL in January.
Which unrestricted free agent should Ferry keep around?
If Ferry has enough cash left over, he might be wise to pursue Dallas Mavericks restricted free-agent (RFA) O.J. Mayo. He'd give Atlanta another long-range shooter (40.8 three-point percentage this season) and a threat off the dribble.
Sacramento Kings RFA Tryeke Evans could be another option. He can't match Mayo's shooting, but would bring better handles, athleticism and defense.
Charlotte Bobcats RFA Gerald Henderson might emerge as a less expensive alternative. He's another strong defender and imposing athlete, but he could be driving up his price tag with this year's emergence of a three-point shot (39.0 percent).
A reasonable contract for either Denver Nuggets' Timofey Mozgov or Milwaukee Bucks' unrestricted free-agent Samuel Dalembert could either round out Atlanta's revamped starting five or add some bulk to their bench.
Ferry figured to sacrifice this season in pursuit of the ideal cap space he created when he jettisoned the burdensome contract of Joe Johnson to the Brooklyn Nets over the summer. The fact that his Hawks have remained competitive has only been an added bonus.
But here's where Ferry will earn his keep.
He's handled the tricky part by freeing up so much money. Now it's on to the important part—making that money work for him.