How Oladipo’s injury affects Heat roster this summer and one new possibility

Victor Oladipo’s serious left knee injury makes it a virtual certainty that he will opt into a contract that will pay him $9.5 million next season.

But there is a mechanism, aside from a trade, that could lessen the cap burden on the Heat next season.

The Heat has the option of using the waive-and-stretch provision on Oladipo, which would replace his $9.5 million 2023-24 cap hit with cap hits of just more than $3.1 million each of the next three seasons.

That option was available to Miami even if Oladipo had not been injured, but seems more likely to be considered in August amid news that Oladipo is likely to miss at least a large part of next season with a torn left patellar tendon.

Here’s why that’s an option that warrants consideration:

Next season, the NBA salary cap is projected to fall in the $134 million range, with a projected $162 million luxury tax threshold. Under the new labor deal, teams that are $17.5 million over the tax line (about $179.5 million next season) face not only a particularly onerous tax bill, but competitive restrictions as well.

Two of those restrictions for exceeding that “second apron” are expected to begin this summer and next season. Several other far more onerous restrictions begin in the 2024-25 season.

The two ‘second apron’ restrictions that will begin in the months ahead: Teams with a payroll above $179.5 million for the 2023-24 cannot use a taxpayer midlevel exception in the $7 million range. Also, teams over the second apron have slightly less flexibility to make trades; the difference in the money going out and coming in is reduced from a maximum of 125 percent to a maximum of 110 percent starting this offseason.

Also beginning this offseason, teams over either apron ($169 million or $179 million) cannot sign a player in they buyout market if his salary with his former team exceeds the non-taxpayer midlevel exception ($10.5 million this past season). The Heat could have signed Kevin Love this year under this new rule, but couldn’t sign a buyout player such as Love next season under this new rule — unless Miami trims considerable salary.

If Oladipo exercises his player option as expected, Miami would have $171 million committed to eight players for next season: Jimmy Butler, Bam Adebayo, Kyle Lowry, Tyler Herro, Duncan Robinson, Caleb Martin, Nikola Jovic and Oladipo.

That doesn’t count Haywood Highsmith’s $1.9 million team option; the $3.5 million that’s due the 18th overall pick; and cap holds that would push Miami above that $179 million “second apron” level.

So if the Heat wants to avoid the “second apron” next season, Oladipo opting in would make it very difficult to re-sign Max Strus or Gabe Vincent in free agency this summer, or sign any players to deals above the minimum.

But using the waive-and-stretch provision on Oladipo would drop the Heat’s payroll — for tax purposes — to about $164 million, which would allow the Heat more flexibility to use part of its taxpayer midlevel exception or re-sign Vincent or Strus. It also would lower the Heat’s luxury tax payment by well over $10 million.

Because there’s a cap charge for each open roster spot, space under the second apron would be snug to put together a 15-man roster. But it would improve the Heat’s flexibility.

Doctors have told Oladipo that he should be able to resume basketball activities in about six months. If he remains with the Heat, he could be ready to play at some point during the second half of the season.

But keeping Oladipo at the current $9.5 million salary would seem the least appealing option, especially because of the uncertainty of when he will be able to play again.

Because teams have until Sept. 1 to use the waive-and-stretch provision, the Heat does not need to make this decision quickly.

The Heat could hold onto Oladipo throughout June, July and most of August to see if it can use his salary to help facilitate a trade. Otherwise, Miami could opt to waive and stretch him late in the summer. Keep in mind that a team’s 2024 tax bill is determined on the final day of the 2023-24 regular season.

Here would be the upshot to not waiving and stretching Oladipo: Stomaching the $9.5 million salary and cap hit next season would get him off the books in 2024-25 and 2025-26, meaning the Heat would not have $3.1 million cap charges that would on the Heat’s cap those seasons if he were waived and stretched.

And though it doesn’t seem like much, not having $3.1 million charges for Oladipo in 2024-25 and 2025-26 would be helpful because of those punitive rules for being a second apron team.

For example, in 2024-25, teams over the second apron cannot aggregate salaries to complete trades if they’re taking in more salary than they’re trading out.

As an example, say Dallas’ Luka Doncic asks for a trade in the summer of 2024. He’s due to make $43 million in 2024-25. If the Heat is a “second apron” team, Miami would not be permitted to trade two or three players whose combined salaries are slightly less than Doncic’s — an option that’s available now to every team.

What about the idea of releasing Lowry or Robinson and using the stretch provision? That’s highly unlikely because A). the Heat might need either contract to facilitate and trade; B). if not, the Heat might need them next season.

Lowry is owed $29.7 million next season in the final year of his three-year deal.

Robinson is owed $18.1 million, $19.4 million and $19.8 million over the next three season, with $9.8 million guaranteed in that final season. But Robinson has value to the Heat, either as a trade piece or as a rotation piece, particularly if Strus leaves.