What will be Heat’s offseason approach? ‘Stay the course.’ Pat Riley on what that means

Anthony Chiang
·11 min read

Just two weeks after the Miami Heat finished two wins away from an NBA championship, team president Pat Riley is already looking forward.

“Our theme in 2010, I stole it from Stephen Covey and the book First Things First: The main thing is to make sure the main thing remains the main thing. That’s always really about winning,” Riley said during his 45-minute season-ending press conference held over Zoom on Friday afternoon. “So I’m sad to move on from the main thing to the next thing — to make sure the next thing remains the next thing.”

The next thing on the calendar is the Nov. 18 NBA Draft, which the Heat has the 20th overall pick in. Beyond that, the NBA calendar remains a work in progress amid the COVID-19 pandemic with league officials, team owners and the National Basketball Players Association still working to set a date for the start of free agency and next season.

The push for a Christmas Day start to the 2020-21 season “is gaining momentum,” according to a Friday report from the New York Times. And ESPN reported Friday that one of the scenarios being discussed is opening a shortened 70 to 72-game regular season in the days prior to Christmas.

Whenever free agency begins, the Heat has some tough decisions to make between now and then as it continues to work to preserve max-level cap space for what could be a loaded 2021 free-agent class that may be headlined by two-time MVP Giannis Antetokounmpo. But Miami’s methodical roster rebuild produced an unexpected result this past season, as the fifth-seeded Heat made it all the way to the NBA Finals before losing to the Los Angeles Lakers in the championship series.

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“I think, this year, with what happened with our team, it really doesn’t change my thought process about, ‘OK, let’s go for it now,” Riley said when asked Friday if this past season’s success speeds up the rebuild schedule ahead of the 2021 offseason. “I think we’ll stay the course with our picks, stay the course with our young players. We have decisions to make, obviously, with player contracts and free agents, and really do a deep dive into this season, myself and [coach Erik Spoelstra] and [general manager Andy Elisburg], about how good we really are right now.

“I’m not going to say that we benefited more than anybody else because of who we are and what we do and how we go about doing it, and that helped us in the bubble. I do think our team was very disciplined in the bubble, very together, chemistry was great. ... My thinking really hasn’t changed. But when I say next thing, if there’s a next thing that presents itself that can really take us to another level talent-wise, I’m open to it.”

Riley made it clear repeatedly, though, the Heat’s hope is “to take care of our own, as much as we can.” That means working to keep most of this past season’s roster intact while also trying to maintain salary-cap flexibility for next offseason, a balancing act that is possible but would take concessions from both the organization and players.

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.

The Heat’s current salary-cap breakdown for next season looks like this: Jimmy Butler ($34.4 million), Andre Iguodala ($15 million), Kelly Olynyk ($12.2 million player option), Bam Adebayo ($5.1 million), Tyler Herro ($3.8 million), Duncan Robinson ($1.7 million), Kendrick Nunn ($1.7 million), KZ Okpala ($1.5 million), Chris Silva ($1.5 million), a projected $2.4 million cap hit for the 20th overall pick in the Nov. 18 draft, a $5.2 million waive-and-stretch cap hit for Ryan Anderson that’s still on the books, and a $350,000 waive-and-stretch cap hit for AJ Hammons.

Assuming Olynyk opts in to the final season of his contract and the Heat keeps the player it drafts this year, Miami will have about $85 million committed to 10 players for next season.

That means the Heat can create up to $22 million in cap space, including cap holds, if it renounces the rights to its six impending free agents — Jae Crowder, Goran Dragic, Udonis Haslem, Solomon Hill, Derrick Jones Jr. and Meyers Leonard.

But to keep this past season’s roster intact, Miami’s plan would instead be to 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.

“We know what our priorities are, and it’s to take care of the players that we have to make decisions on almost immediately with our young guys,” Riley said. “We know we have a decision Bam has to make [with his potential extension] and we do with him. We know the guys that have sacrificed for us that we really like. Our free agents, especially Goran, who has been here for five years. It’s going to be a little bit dicey for us because of wanting that flexibility. But if things can happen prior to that, I think we have to take care of our own, as much as we can.”

If the Heat’s plan is to re-sign its own free agents, 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 $47 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 $47 million to spend, the Heat could hypothetically offer Crowder a one-year, $15 million deal (a raise from his salary of $7.8 million this season) and Dragic a one-year, $20 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 lucrative one-year contract or jump to another team that offers long-term security.

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.

In this hypothetical scenario, Crowder and Dragic both opting to take those one-year offers for a combined $35 million to remain with the Heat leaves Miami with about $12 million to spend before it gets to the tax line.

The Heat can then use all or part of its projected $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 $12 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.

“Do you just run it back without doing anything?” Riley said of a question the Heat’s front office will have to answer this offseason. “If you got the cooperation in some way shape or form with guys wanting to come back as free agents. But I think about that. We were in the Finals. Are we a finalist? Can we get through the Eastern Conference next year with what’s happening in Philadelphia or what’s going to happen in Milwaukee or what’s going to happen in Brooklyn or Boston? We already know that Boston has got their team together and they got three first-round picks in the draft. Toronto, there’s a lot of very good teams. So yeah, that’s a question that I’ll kick around in my mind. I’ll talk to Spo about it.”

Another important part of this plan is Adebayo’s extension. Miami can extend the All-Star center’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.

Will Riley pitch Adebayo on waiting until 2021 to sign his next contract to help preserve the Heat’s cap space?

“I’m not going to approach it that way,” Riley said. “I really don’t want to get into any kind of discussions at this point about it. I think all the hypotheticals out there about what people think is going to happen, that’s what they are. You all know our numbers. You know what the situation is, the free agents in ‘20 and ‘21. So when it comes to our players, we want to take care of them, and especially the ones that we really value. We value Bam Adebayo. He’s an All-Star. And he’s young. And he’s great. And we’re going to do what’s in his best interest. That is what I think we have to do. And that is our approach. ... We love Bam. He’s a cornerstone to our franchise and it would be in our best interests to make sure we do the right thing with him.”

But Riley made it known throughout his 45-minute media session that protecting 2021 salary-cap flexibility is also still a top priority. Unless, of course, a trade for a disgruntled superstar materializes in the next eight months before Miami can even use its 2021 cap space.

“I just think we need to remain fluid,” Riley said. “Once we get get all the numbers and we get everything down, we get the schedule, we know when the dates are, and what the rules are in everything, once we get all of that, we’re going to remain fluid. And whatever presents itself to us, we’ll look at it. As I said, first things first, and I don’t want to contradict myself. I’d really like to take care of our own in some way shape or form. But we also want that other box to be filled, which is called flexibility. We’ll see what happens. ... We have a good idea of what we want to do and I think we’ll stay the course on that.”