Heat considering multiple options with Lowry. Where things stand and what makes sense

Kyle Lowry’s Heat contract is due to pay him $29.7 million next season in the final season of a three-year deal.

In reality, Lowry could end up costing the Heat tens of millions of dollars more than that, because of salary-cap implications.

And that has the Heat considering multiple exit avenues with the veteran guard.

According to two sources, the Heat has been giving thought to potentially using the waive-and-stretch provision on Lowry if Miami is unable to trade him, though a firm decision on that has not been made. That waive-and-stretch mechanism would allocate his remaining cap hit equally over three seasons.

In other words, if the Heat goes the waive-and-stretch route, Lowry would have a cap hit of $9.9 million each of the next three seasons instead of $29.7 million next season, which would be his cap hit otherwise.

The upshot of that: Miami’s 2023-24 salary cap commitments would shrink from $178.5 million to $158.5 million, below the $165 million tax line and the $182.5 million second apron, a threshold that carries significant restrictions, including the inability to sign buyout players who were making more than $12 million from the team that released them.

That extra flexibility could allow the Heat to re-sign guard Gabe Vincent in the days ahead without paying an enormous tax.

The downside of waiving and stretching Lowry: The $9.9 million cap hits in 2024-25 and 2025-26 would be burdensome, especially because the particularly onerous restrictions of surpassing the second apron take effect a year from now.

That option will be moot if the Heat includes Lowry in a potential trade for Portland guard Damian Lillard — who has not asked for a trade — or another transaction. But the decision must be made this summer, because the waive-and-stretch provision can only be used before Sept. 1.

If the Heat keeps Lowry beyond Sept. 1, Miami would need to hope that his contract could be parlayed into assets, perhaps at next February’s trade deadline should he remain on the roster that long. At this past season’s trade deadline, the Lakers appreciably upgraded their team by parlaying Russell Westbrook’s expiring contract — the one that paid him $47 million last season — into three helpful rotation players.

With D’Angelo Russell and Malik Beasley averaging 17.4 and 11.1 points per game, respectively, after their acquisition, and Jarred Vanderbilt contributing 7.2 points and 6.7 rebounds, the Lakers had the needed depth to ride LeBron James and Anthony Davis to the Western Conference finals, where they were swept by Denver. (Rui Hachimura, also acquired before the trade deadline in a different deal, also helped.)

The path that would most benefit the Heat — aside from Lowry being used in a Lillard deal — would be finding a team that has the cap space to absorb Lowry’s contract while sending the Heat a lesser player making much less money. That path seems unlikely because the teams with cap space seemingly could use their space on more appealing options than Lowry.

Five teams have more than $30 million in cap space: Houston at $60.9 million, San Antonio at $38.6 million, Sacramento at $35.6 million, Indiana at $32.2 million and Detroit at $30 million.

If the Heat doesn’t include Lowry in a trade involving Lillard — and if Miami bypasses using the waive-and-stretch provision on him by the end of August — here would be some teams that hypothetically could be a match for Lowry under certain circumstances:

▪ Los Angeles Clippers: Power forwards Marcus Morris (due $17.1 million) and Robert Covington ($11.7 million) would be a cap match for Lowry if the Clippers want a veteran point guard. This would make sense if the Heat gets Lillard, especially if Caleb Martin is sacrificed in the deal. But the Heat likely would need to throw in a sweetener for the Clippers to consider.

The Heat also could give the Clippers tax relief by taking the last two years of Terance Mann’s deal ($10.5 million, $11.4 million).

▪ Utah: There’s no reason to think the Jazz would try to move off the reasonable money due Lauri Markkanen, who had a breakout season last year and is due $17.2 million and $18 million the next two seasons.

Utah is reportedly trying to move point guard Colin Sexton’s contract, but this would be worth considering for Miami only if the Heat cannot land Lillard.

Flipping Lowry for Sexton (due $17.3 million, $18.1 million, $18.9 million) and Kelly Olynyk ($12.2 in an expiring deal) would work. But Utah’s willingness to take only Lowry would depend on how eager the Jazz is to dump Sexton’s contract.

Sexton, a 6-1 swing guard, averaged 24.3 points and shot 37.1 percent on threes in 35.3 minutes per game while making 60 starts for Cleveland two seasons ago. Last season, he averaged 14.3 points and 23.9 minutes and shot 39.3 percent on threes in 48 games, including 15 starts.

▪ Toronto: There remains mutual affection and respect between Lowry and the Raptors. If the Heat cannot get Lillard, it would be worth exploring the possibility of flipping Lowry and other assets (a first-round pick or Nikola Jovic) for 6-5 swingman Gary Trent Jr. (17.4 point per game last season) and power forward Chis Boucher.

The salaries line up almost perfectly; Trent will make $18.6 million in an expiring deal and Boucher $11.7 million. The Raptors’ incentive? If Toronto determines it cannot or does not want to extend Trent and if it wants to get out of Boucher’s $10.6 million in 2024-25.

Boucher averaged 9.4 points and 5.5 rebounds last season. He shoots threes but not at a great percentage; he’s 270 for 908 (33.4 percent) in his career. Former Heat player Precious Achiuwa also could be an option in this scenario.

▪ San Antonio: There are several permutations that could be built around Lowry’s money, but the Heat would need to motivate the Spurs with draft picks and/or Jokic or perhaps Martin.

Such a package could be built around swing forward Doug McDermott (on a $13.7 million expiring/10.3 points per game and 41.3 percent on threes last season) and point guard DeVonte Graham, who’s due $12.1 million and $12.6 million the next two seasons.

▪ Indiana: If the Pacers want to rebuild, a package starting with Lowry and Oladipo’s expiring contracts would be enough – from a cap standpoint - to land Myles Turner (due $20.9 million and $19.9 million) and Buddy Hield, who’s on an expiring deal worth $19.2 million.

But from a value standpoint, Indiana would seek far more.

If the Lillard pursuit doesn’t materialize, a case could be made to offer Lowry, Oladipo, Jokic and multiple first-round picks for that Turner/Hield package. But Indiana likely would be disinclined to give up on the 2023-24 season before it even starts.

And Herro would have no value to Indiana, with Bennedict Mathurin coming off a very good rookie season.

If the Pacers start the season poorly, this is one team worth monitoring if Lowry remains on the Heat’s roster past August.

Beyond Lowry, the sign-and-stretch mechanism also remains an option for Oladipo, whose $9.5 million cap hit could be split instead into $3.1 million cap charges the next three seasons.

NOTABLE

The Heat extended qualifying offers to forward Jamal Cain and center Orlando Robinson, who finished the season on two-way contracts. Both Cain and Robinson will play for the Heat’s summer league team next month.

The qualifying offers make Cain and Robinson restricted free agents and gives the Heat the right to match outside offers for either player. The Heat could give them two-way contracts again or sign them to standard contracts, a decision that hasn’t been made.

The Heat must decide by Thursday whether to extend a $2.3 million qualifying offer to center Omer Yurtseven, a move that would make him a restricted free agent and give the Heat the ability to match outside offers.