Should Finals appearance take Heat’s attention away from 2021 offseason? It doesn’t have to
The Miami Heat does not believe in sacrificing the present for the future, but that doesn’t mean it’s not planning for what’s ahead.
There’s an important distinction between the two, and that has been on full display with the Heat’s roster moves during the past 18 months. Just take a look:
In the final days of the 2018-19 regular season, the Heat signed forward Duncan Robinson to a nonguaranteed two-year contract that runs through the 2020-21 season.
On the final day of the 2018-19 regular season, the Heat signed guard Kendrick Nunn to a similar nonguaranteed two-year contract that also comes off the team’s salary-cap sheet at the end of the 2020-21 season.
The Heat then acquired All-Star wing Jimmy Butler through a sign-and-trade deal via a four-team trade in July 2019, signing Butler to a four-year, $142 million maximum contract. But the Heat did not take on any other long-term money as part of this trade. The only other player Miami picked up as part of this deal was center Meyers Leonard, who had one season remaining on his contract and will be a free agent this offseason.
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In January, the Heat replaced rookie center Chris Silva’s two-way deal with a three-year standard minimum-salary contract that runs through the 2021-22 season. But the final season, 2021-22, is a team option.
In February, the Heat traded James Johnson, Dion Waiters and Justise Winslow to the Memphis Grizzlies to acquire Jae Crowder, Andre Iguodala and Solomon Hill. Miami signed Iguodala to a two-year, $30 million extension which includes a team option for the 2021-22 season. Crowder and Hill were acquired in the final season of their contracts and will be free agents this offseason.
As part of that February trade, the Heat was also in discussions to make it an even bigger deal by landing forward forward Danilo Gallinari from the Oklahoma City Thunder. But that part of the trade never came to fruition because Heat officials and Gallinari could not come to an agreement on an extension. Gallinari wanted a deal that would have included substantial guaranteed money in 2021-22, and the Heat did not want to invest guaranteed money past the 2020-21 season.
The common thread: Each one helped the Heat improve its roster while preserving max-level cap space for the 2021 offseason, when a loaded free agent class could be headlined by two-time MVP Giannis Antetokounmpo.
But Miami’s methodical roster rebuild produced an unexpected result in Butler’s first season with the organization, as the fifth-seeded Heat finished just two wins away from an NBA championship. Now, the question is: Should the Heat’s improbable run to the NBA Finals speed up the rebuild schedule ahead of the 2021 offseason it has been hoarding cap space for?
The answer is complicated because there are so many different factors in play, and a trade for a disgruntled superstar in the next eight months could end up taking the Heat off the list of teams with significant 2021 cap space anyway.
However, there is a clear way to bring back the core of this season’s roster that won the Eastern Conference without punting on the 2021 plan. It would likely take some sacrifice from a few players, though, in an uncertain time for NBA economics.
“I think you can still keep the same timeline and try to just walk the tightrope of balancing bringing everyone back and getting to another NBA Finals, and also having that cap flexibility for 2021,” ESPN analyst and former Nets executive Bobby Marks said in a phone interview with the Miami Herald. “I think it’s going to have to take sacrifice. That’s kind of the big word.”
How could the Heat pull it off?
Next season’s salary cap and luxury tax line have not been set yet, but there’s an expectation that the salary cap could end up being flat with this past season’s numbers ($109 million cap, $132.6 million tax line) also used next season.
Assuming center Kelly Olynyk opts in to the final season of his contract and the Heat keeps the player it drafts this year, Miami will have about $86 million committed to 10 players for next season — that includes a $5.2 million waive-and-stretch cap hit for Ryan Anderson that’s still on the books.
That means the Heat can create up to $21 million in cap space, including cap holds, if it renounces the rights to its six impending free agents — Crowder, Goran Dragic, Udonis Haslem, Hill, Derrick Jones Jr. and Leonard.
But to keep this roster intact, Miami would take a different path and instead take advantage of Bird rights to retain its free agents. The Heat owns Bird rights with all six players, which allows NBA teams to exceed the salary cap in order to re-sign their own free agents.
Then it becomes less about how much cap space Miami has and more about how much room it has below the luxury tax line.
The Heat stands about $46 million from the projected tax line. That’s the amount of money Miami has to bring back its free agents.
Re-signing Crowder and Dragic would seem to be top priorities for the Heat this offseason since both started and played well during this postseason.
With about $46 million to spent, the Heat could hypothetically offer Crowder a one-year, $11 million deal (a raise from his salary of $7.8 million this season) and Dragic a one-year, $18 million deal to bring them back. The thinking would be to offer them more money than other teams would, but only on a one-year deal to protect 2021 cap space.
This is where Crowder and Dragic would have to choose whether to stay with the Heat on a one-year contract or jump to another team that offers long-term security.
“What is going to be the market for Goran and for Crowder?” Marks said. “For Goran’s case, can you get him a one-year, $16 [million to] $18 million deal where he’s basically making the same amount of money in one year where it would maybe take two years somewhere else. I think that’s going to be the big question. I think the same for Crowder, he’s probably penciled in for maybe midlevel numbers — $9 million or maybe a little bit less.”
If Crowder and/or Dragic demand a multiyear deal from Miami, it puts the Heat in a position of choosing between the importance of keeping the core of the roster intact and preserving 2021 max-level cap space.
“The big thing for the Heat, I know there’s a priority for 2021, but when you’re two games away from winning it all and you have the chance to bring these guys back with Dragic and Crowder,” Marks said. “Will you commit if it gets to the point of spending money into 2021-22? That’s going to be where their patience is going to be tested. I think you almost have to, with the goal in mind that hopefully these guys could be moved if you ever got a chance to go sign a marquee-level free agent. Every guy is tradeable, but it depends on where they are in their career.
“The downside is if you let Crowder and Dragic go, this is not a good free agent class. The free agent point guard class is the weakest I’ve seen in a long time. You’ll have cap space, but let’s say [Fred VanVleet] is off the board. Then you’re looking at guys like Jeff Teague and D.J. Augustin and Kris Dunn, and guys like that as far as your replacement for Dragic.”
In this hypothetical scenario, let’s say Crowder and Dragic both sign those one-year contracts for a combined $29 million to remain with the Heat. That leaves Miami with about $17 million to spend before it gets to the tax line.
The Heat can then use all or part of its $9.3 million midlevel exception to sign an outside free agent to a one-year deal even though it’s already above the cap. Some potential midlevel targets who could interest Miami this offseason are Paul Millsap, Marcus Morris, Aron Baynes, Derrick Favors, Tristan Thompson and even DeMarcus Cousins.
Or Miami can use the $17 million it has under the tax line to work on deals to bring back its other impending free agents — Jones, Haslem, Hill and Leonard — on one-year contracts.
Another important part of this plan is Heat All-Star center Bam Adebayo’s extension. Miami can extend Adebayo’s rookie-scale contract until the day before the start of the regular season, as he will earn $5.1 million next season in the final year of his rookie deal whether he signs an extension this offseason or not.
This is a complicated issue because Adebayo deserves an extension, and the Heat obviously wants the 23-year-old to be part of its long-term future. But extending Adebayo this offseason would prevent Miami from having max-level cap space in 2021.
Here’s the difference from a cap flexibility standpoint between giving Adebayo the extension he’s eligible to receive this offseason as opposed to waiting until next year when he would become a restricted free agent:
Players with no more than six years of service time can sign max contracts with a starting salary up to 25 percent of the cap. If the 2021-22 cap is hypothetically $115 million, then Adebayo’s first-year max would be $28.7 million. That would be his 2021-22 cap charge if he signed an extension this offseason.
But if Adebayo agrees to bypass the extension and sign a max deal next offseason, the Heat could sign outside free agents first and then sign Adebayo to a five-year deal in 2021, with an Adebayo cap charge of $15.3 million for that 2021-22 season regardless of what Miami pays him. As a restricted free agent, Miami would be able to match outside offers should Adebayo sign an offer sheet with another team next offseason.
That $13 million or so difference in Adebayo’s 2021-22 cap charge is the difference between having 2021 max-level space or not.
“The Pistons did this with [Andre] Drummond when he was going through his extension year,” Marks said. “They basically almost had a handshake agreement because Drummond’s cap hold was low that they would take care of him, which they did the following year and it gave them a ton of flexibility. For Miami, it’s like the relationship that these two have grown accustomed to over the last three of four years. As long as Bam and his representatives know, I mean you can’t have a side contract, but if you know that there’s something waiting for him. Then it’s certainly worth waiting when you look at his cap hold compared to what he can get.”
While it’s not completely in the Heat’s control, a middle ground does exist between bringing back the core of a roster that was two wins away from a championship and keeping its 2021 dreams alive.
Along with Antetokounmpo, the list of those who could potentially be free agents in 2021 includes Victor Oladipo, Anthony Davis, Gordon Hayward, Kyle Lowry, DeMar DeRozan, LaMarcus Aldridge, Mike Conley and Rudy Gobert. Also, Donovan Mitchell is set to become a restricted free agent in 2021, and LeBron James, Blake Griffin, Paul George, Kawhi Leonard, Jrue Holiday and Chris Paul have player options to become free agents that offseason.
The Heat has been planning with an eye toward 2021 for a few years. The moves Miami makes this offseason will indicate whether that approach has changed.
“If they can add another piece with what they have developing, they will be a force to be reckoned with for years to come,” Heat forward Caron Butler said on NBA TV. “You bring back this team with more pieces, this team is going to be a problem.”
