Rules that remove a few paths for Heat to improve roster. And the waive/stretch option

The Heat has used various mechanisms to improve its team in the past. But three of those mechanisms —- a sign-and-trade for a free agent, a midlevel exception and signing a player in the buyout market next February (or anytime) —- will be off the table unless the Heat can significantly reduce payroll.

The last two times the Heat has added players with All-Star pedigree (Jimmy Butler and Kyle Lowry), Miami achieved it through sign-and-trades. Both players were free agents at the time that the Heat acquired them.

But a sign-and-trade for a top free agent this summer appears unlikely for Miami, because the Heat already has $176 million in salary cap commitments for next season, and acquiring a player in a sign-and-trade would hard-cap the Heat at about $168 million for all of next season, according to NBA rules.

Allowing itself to be hard-capped is not realistic, because the $176 million in cap commitments includes only nine players and the 18th pick in the draft and doesn’t include any financial commitments for impending free agents Max Strus, Gabe Vincent, Omer Yurtseven, Cody Zeller and Kevin Love -- or whoever fills their roster spots.

That hard-cap rule does not affect the Heat’s ability to re-sign any of those five Heat free agents. Strus and Vincent have Bird Rights, and Love can be signed for up to $3.8 million. But the rule makes it unlikely that the Heat could acquire one of the better free agents from the 29 other teams, even if that player wanted to come here, as Butler and Lowry did.

The most expensive unrestricted free agents in this summer’s class include Fred Van Vleet, Jerami Grant, Kyrie Irving, D’Angelo Russell, Jakob Poetl, Brook Lopez, Nik Vucevic, Harrison Barnes, Dillon Brooks, Kelly Oubre, Caris LaVert and Christian Wood.

The class also is expected to include most or all of these players with opt outs: James Harden, Khris Middleton, Draymond Green, Kristaps Porzingis, Kyle Kuzma, Jordan Clarkson and Toronto’s Gary Trent Jr.

None of those would seem Heat options because of Miami’s position well above the $134 million salary cap, and the rule making it essentially impossible for teams significantly above the luxury tax line to make sign-and-trades.

Per NBA rules, teams cannot acquire a player in a sign-and-trade if it pushes them more than $7 million above the tax threshold (so $169 million for 2023-24). That figure is known as the first apron; teams that make sign-and-trades are hard capped at that first apron.

What’s more, teams are hard-capped at that first apron ($169 million or so next season) if they use the standard midlevel exception ($11.4 million). So that vehicle also will be unavailable to Miami unless the Heat can shed considerable salary without taking much back (unlikely).

And as part of the new labor deal, teams over the second apron ($17.5 million above the $161 million tax line) are not permitted to use a $5 million taxpayer midlevel exception this summer. Miami projects as a second apron team.

So here’s the bottom line: If the Heat cannot dump a lot of salary and keeps Vincent or Strus — let alone both — Miami likely won’t be able to use the $5 million taxpayer midlevel exception under these new rules.

Under this new labor agreement, there are several new rules that punish teams whose payrolls reach that second apron (about $179 million in 2023-24). Most take effect in 13 months, but these three take effect this summer, per ESPN’s Bobby Marks:

1). Teams over the second apron cannot use its taxpayer midlevel exception. 2). Teams over the second apron cannot sign a player on the buyout market next season. 3). Teams over either apron can take back 110 percent more than they send out in trades over the next 12 months — less than the 125 percent allowed traditionally.

Beginning in 2024-25, teams over the second apron face even more limiting trade restrictions. For example, if the Heat is a second apron team in 2024-25, it cannot aggregate salaries in a trade — such as sending players making $20 million and $10 million for one making $30 million. That’s why if the Heat wants to make a big trade, the time to do it is this summer or before the February trade deadline.

Regardless of Miami’s payroll, the Heat can sign players to minimum contracts (topping out at $2.9 million).

The Heat also can trade for players who are already under contract through next season or beyond. Portland’s Damian Lillard would be one such potential target if he asks for a trade, which he hasn’t to this point.

Miami also has a $4.7 million trade exception, which can be used through Feb. 8. But a trade exception cannot be aggregated with other exceptions and most go unused because of the narrow parameters in which they can be utilized.

To achieve a lot more financial flexibility, the Heat would need to dump the contracts of Kyle Lowry and/or Duncan Robinson to a team that can absorb either of those deals — with the Heat taking back substantially less money. Finding another team willing or able to do that type of deal will be difficult.

But finding a taker for Robinson as part of a larger trade — with both teams taking in similar money — might be easier after his strong postseason. Lowry’s contract, which has one year left and will pay him $29.6 million next season, could be easier to move closer to next February’s trade deadline, unless Portland were willing to take it (along with a bunch of other more appealing assets) to facilitate a Lillard trade.

What about the idea of releasing a player with a bad contract and stretching his cap hit over three years? That’s highly unlikely in the case of Lowry and Robinson, because both of their deals could be needed in trades. And either or both players could be needed next season, especially if Vincent or Strus leaves in free agency and if Lillard isn’t acquired.

Robinson is owed $18.1 million, $19.4 million and $19.8 million through the next three seasons, with $9.8 million guaranteed in that final season.

The collective bargaining agreement allows a team to cut a player and allocate his cap hits over several seasons.

A player with one year left on his contract theoretically could be released, before Sept. 1, with his cap hits split evenly over three seasons.

The Heat could consider using the waive-and-stretch provision on Victor Oladipo, who likely will exercise his $9.5 million player option next season while he recovers from a knee injury that is expected to keep him sidelined into 2024. Such a move would result in the Heat incurring $3.15 million cap hits for Oladipo each of the next three seasons.

The sense here is that if the Heat considers the waive-and-stretch option on Oladipo, Miami wouldn’t do it until late August, after exploring trade scenarios.

Bottom line: The most realistic avenue for the Heat to improve its team is trading for a player who’s already under contract for next season. Miami is expected to again try to pounce if a star becomes available, with Lillard waiting to see if the Blazers try to construct a competitive team around him. He has said the Heat interests him if he asks for a trade.