The Heat’s Caleb Martin conundrum but why a re-signing isn’t out of the question

The Heat’s decision to acquire Terry Rozier seemingly boosts Miami’s postseason hopes but also leaves the team positioned to remain above the luxury tax line next season and likely restricts its ability to re-sign impending free agent Caleb Martin.

The key word here is likely.

General manager Andy Elisburg and the Heat front office have deftly navigated the salary cap for years, and even though Miami is currently projected to be a cap team with little wiggle room to keep Martin, it doesn’t necessarily mean it will end up that way.

For example, if the Heat sends away significantly more salary in an offseason trade than it takes in -- which is permitted when dealing with teams under the cap -- then Miami would have more flexibility to sign Martin, who is expected to opt out of a contract that would pay him $7.1 million next season.

While some fans have suggested moving Martin before Thursday’s NBA trade deadline instead of potentially losing him for nothing this summer, that approach would run counter to the Heat’s history and philosophy of maintaining or fortifying its roster, not selling off an asset, before the playoffs.

Martin -- who has had some good moments recently, including a handful of his patented reverse layups and circus shots -- likely wouldn’t net enough in return to offset his loss.

A strong case could be made that there’s more value in having Martin for the playoffs than dealing him for a second-round pick and a lesser player. And trading Martin for a player with a full year or more remaining on his contract would leave the Heat more than $15 million above next season’s tax line.

Last February, the Heat decided it preferred having Gabe Vincent and Max Strus for the playoffs than trading them, even though it was clear that Miami likely wouldn’t be able to afford Strus and might not be able to afford Vincent. Both ultimately departed in free agency after contributing to the Heat’s run to the NBA Finals.

Key things to know about Martin’s situation and where the Heat stands with future flexibility:

2024-25 ROSTER SITUATION

If Martin opts out of his $7.1 million salary for next season, the Heat would have about $181 in cap commitments if Kevin Love, Josh Richardson and Thomas Bryant opt into modest salaries next season and about $177 million if they don’t.

Teams have been told that next season’s luxury tax line is expected to be $172 million. The first apron would be $179 million. The second apron, with multiple particularly punitive restrictions, would be $190 million.

So with its current payroll, the Heat would likely lack the ability to re-sign Martin and avoid the second apron if Martin commands a contract in the $10 million per year range.

Miami potentially could re-sign impending restricted free agent Haywood Highsmith and avoid the second apron, unless Highsmith raises his stock dramatically during the remainder of the season.

APRON IMPACT

The Heat appears comfortable paying a luxury tax again next season barring a change of heart. But Miami seems disinclined to be a second apron team because of the onerous competitive restrictions.

Even if Martin opts out as expected, the Heat is positioned to be very near or above the $179 million first apron.

Here’s would be the consequences of being over the first apron this summer and next season:

1). The Heat could not acquire a player in a sign-and-trade if that player keeps them above the first apron.

2). The Heat could not use a $13 million mid-level exception.

3). Miami could not sign a buyout player whose contract exceeds the league’s average salary next season, a restriction the Heat already faces this season.

4). Miami would not be able to take back more salary in a trade than it sends out.

Beginning next season, exceeding the second apron ($190 million in 2024-25 payroll) appears to be out of the question for the Heat.

Second apron teams cannot aggregate salaries in a trade; that means a team cannot trade one player making $20 million and another earning $10 million for a player making $30 million.

Beginning with the 2024-25 season, teams that finish the regular season over the second apron will no longer be able to trade their first-round draft pick seven years out. If a team exceeds the second apron three times in five seasons, its first round pick would be moved to the bottom of the first round, regardless of the team’s record.

THE TRUMP CARD

So if Martin has a great postseason for the Heat and Miami wants to keep him, how could the front office create enough room under the second apron?

There are several options:

1). By trading a player to a team that has cap space in return for a future draft pick.

2). By trading a player or multiple players to a team with cap space and receiving players making less in return.

Let’s face it: If the Heat misses the playoffs or fizzles out early in postseason, significant changes are more likely than not. And making those changes could create the flexibility to re-sign Martin if Miami chooses.

Even though $6 million in 2023-24 salary was purged in the Kyle Lowry/Rozier trade, the Heat is still restricted in the buyout market. As a team over the first apron ($7 million above the tax line), Miami cannot sign a free agent making more than $12 million.

The Heat could eliminate that restriction by trading Martin to a team with a trade exception, in exchange for a future second-round pick.

But such a move would seem short-sighted, because of Martin’s value to the team in a potential playoff run, and the likelihood that there would be no buyout player eligible to join the Heat who’s better than Martin, who is averaging 10.2 points and 4.6 rebounds and shot 36.6 percent on three-pointers in 33 games and 12 starts.