NBA’s 2016-17 Salary Cap Now Projected to Hit $94 Million

June 17th, 2016 No comments
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Salary cap projections for the 2016-17 season keep rising, backed by exploding revenues.

When the NBA announced its new nine-year, $24 billion national television rights deals with ESPN/ABC and TNT in October 2014, which kick in next season, initial projections for the 2016-17 salary cap came in at about $86 million.

When the league provided its first official guidance sixteen months later, in April 2015, the projection increased to $89 million, with the luxury tax threshold projected at $108 million.

The NBA updated its guidance for the 2016-17 season a year after that, in April 2016, this time projecting a salary cap of $92 million and a luxury tax threshold of $111 million.

Now, just two months later, the league has raised its projections once again. The NBA sent a memo on Friday afternoon to all 30 teams informing them that the 2016-17 salary cap is projected to be $94 million, while the luxury tax threshold is projected at $113 million.

Despite the substantial increase, even those revised figures appear to be slightly conservative. The league’s latest guidance is rounded to the nearest million-dollar, even though it is likely that, internally, it is utilizing a more precise (if undoubtedly preliminary) estimate. Leveraging the information provided in the memo, the more precise figure can be calculated. The league actually appears to be projecting a salary cap of $94.4 million and a luxury tax threshold of $113.6 million.

Why the $2.4 million increase in the salary cap projection over the past two months alone? According to the league, the increase was based on “business outperformance since the previous estimates.”

In short, that means that with the audit of the books for the 2015-16 season now underway, revenues continue to wildly outpace even the NBA’s own estimates. The latest cap increase suggests that in the past two months, the league has raised its 2015-16 revenue estimate by another $67 million, to a whopping $5.3 billion!  Read more…

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Miami Heat Player-by-Player Overview

May 27th, 2016 1 comment
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can (and do so on a regular basis behind the scenes).

The Miami Heat will start the summer with just six players under contract for the 2016-17 season – Chris Bosh, Goran Dragic, Josh McRoberts, Justise Winslow, Briante Weber and Josh Richardson. Those six players will cost a combined $49.8 million.

The remaining nine players will become free agents – Dwyane Wade, Luol Deng, Udonis Haslem, Hassan Whiteside, Gerald Green, Amare Stoudemire, Tyler Johnson, Joe Johnson and Dorell Wright. Those nine players will carry a combined $54.7 million in cap holds.

The Heat will therefore technically start the summer over the cap, with a team salary of $104.5 million against a projected salary cap of $92.0 million.

Here is a brief overview of how things can go from there for all 15 current Heat players.  Read more…

Can the Heat Sign Kevin Durant and LeBron James?

May 25th, 2016 No comments
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“LeBron James promised the city of Cleveland, ‘I’m coming back to bring you that elusive title that has escaped this city since 1964.’ He never said anything about staying once he does accomplish that… I’m hearing about a return to Miami if this man wins. He ain’t going nowhere if he loses. But, if he wins, his options are open. LA, but especially Miami, a return to South Beach.”

That was Stephen A. Smith two days ago, talking about the prospect of LeBron James returning to the Miami Heat, just weeks after he said this about Kevin Durant:

“I believe the team that hasn’t been mentioned that much may be the dark horse in [the chase for impending free agent Kevin Durant this summer], which are the Miami Heat. Consider who the Heat are. You’re led by Pat Riley. You’ve got an exceptional young coach in Erik Spoelstra. You’ve got LeBron and D-Wade having captured two championships together there… Then you take into account the young guys — the Josh Richardsons, the Justise Winslows, the Hassan Whitesides… You add Kevin Durant to that equation and bring back Dwyane Wade, you’re talking instant title contention. Automatically.”

Unlikely as it may be, either James or Durant would be a game-changing free-agent acquisition for the Heat. But why either one? As long as we’re dreaming, why not both?

Why not a scenario whereby the Heat sign both James and Durant, while also also re-signing Dwyane Wade and Hassan Whiteside, and retaining Chris Bosh?

Is it a reasonable possibility? Of course not.

But is it possible? Let’s have some fun and find out.

The concept, ludicrous as it may be, would presumably go something like this:

Kevin Durant and the Oklahoma City Thunder somehow blow their current 3-1 series lead over the Golden State Warriors after two straight blowout victories, leading Durant to become so frustrated over his inability return to the NBA Finals as to consider his alternatives.

LeBron James and the Cleveland Cavaliers push past the Toronto Raptors and somehow go on to beat the Warriors in the NBA Finals, whereupon James decides that he has fulfilled his obligation to his hometown team and is willing to risk again enraging his local fan base for a return trip to Miami.

A summit is held between James, Durant, Wade, Bosh and Whiteside. They contemplate a possible joining of forces. The Heat organization has nothing do to with it, of course.

They use the following assumptions to coordinate a plan of attack to bring to Pat Riley on July 1st:

What is that plan of attack? Here it is, in 13 easy steps:  Read more…

Could the Miami Heat Sign Kevin Durant AND Retain Hassan Whiteside?

May 24th, 2016 No comments
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“I believe the team that hasn’t been mentioned that much may be the dark horse in [the chase for impending free agent Kevin Durant this summer], which are the Miami Heat.

“Consider who the Heat are. You’re led by Pat Riley. You’ve got an exceptional young coach in Erik Spoelstra. You’ve got LeBron and D-Wade having captured two championships together there… Then you take into account the young guys — the Josh Richardsons, the Justise Winslows, the Hassan Whitesides… You add Kevin Durant to that equation and bring back Dwyane Wade, you’re talking instant title contention. Automatically.”

That was Stephen A. Smith, talking earlier this month about the prospect of Durant joining the Heat this summer.

Of course, he was talking theoretically.

That which seems wonderful in theory isn’t always possible in reality.

Miami will start the summer with six players under contract for the 2016-17 season – Chris Bosh, Goran Dragic, Josh McRoberts, Justise Winslow, Briante Weber ($219K guaranteed) and Josh Richardson (non-guaranteed). Those six players will cost a combined $49.8 million.

At the $92 million salary cap currently projected by the NBA, the Heat would have — after subtracting that $49.8 million, the cost to retain the right to re-sign Tyler Johnson to a contract that exceeds the cap, and necessary roster charges — up to $40 million or so of cap space with which to spend on free agents.

Durant’s maximum salary would be $25.9 million. Whiteside’s maximum salary would be $21.6 million. Those two figures alone total to $47.5 million. That’s way above the Heat’s $40 million of projected cap room, and that’s before even dealing with Wade, Joe Johnson and Luol Deng.

The prospect of Durant in Miami, therefore, wouldn’t be easy, and shouldn’t be considered even remotely likely. But Riley has always dreamed big. In the past decade, he’s acquired LeBron James and Shaquille O’Neal — arguably the NBA’s two greatest post-Michael-Jordan era players — and paired them with Wade to secure the franchise’s five NBA finals appearances and three titles.

Kevin Durant is the prize of the 2016 free agent crop, and Riley will surely take a shot.  Read more…

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Kevin Durant Faces an Intriguing Free Agency Decision

May 23rd, 2016 No comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

Four years ago, an upstart Oklahoma City Thunder team was blasting its way into the 2012 NBA Finals on the strength of four stud young draft picks — Kevin Durant, Russell Westbrook, Serge Ibaka and James Harden — who were each 23 or younger, supremely athletic and immensely talented. They seemed destined to stake their claim as the preeminent Western Conference powerhouse for the next decade or so.

Things haven’t worked out as planned thus far.

The Miami Heat went on to take out the Thunder in five games, in what appeared at the time to be the first of many such showdowns. But Oklahoma City then traded Harden to the Houston Rockets prior to the start of the 2012-13 regular season, after the sides couldn’t agree on a contract extension. Harden wanted a max contract that would’ve paid out $61 million over four years, while the Thunder were only willing to offer as much as $54 million.

It was a controversial decision, made as part of a long-term plan to avoid ever having to pay the league’s new and harsher luxury tax. As it turns out, though, Oklahoma City could’ve given Harden his max deal and still only have had to pay the tax for, at most, one season. The Thunder has since paid the tax twice in the three years since he’s been gone.

Over those three years, a Westbrook torn right meniscus ended any shot at a title in 2013, an Ibaka strained left calf contributed to the team’s premature playoff exit in 2014, and an improperly healed Durant Jones fracture in his right foot led to the Thunder missing the playoffs outright in 2015.

In that space of time, competition at the top end of the Western Conference stiffened. Stephen Curry established himself as the best shooter and his Golden State Warriors the best team in NBA history, while the San Antonio Spurs brilliantly reinvigorated their aging core with acquisitions of Kawhi Leonard and LaMarcus Aldridge.

Now we’re left wondering if a team once projected as an NBA Finals mainstay can return even once.

Durant will be 28 to start the 2016-17 season. The lanky 19-year-old rookie from the University of Texas has since collected an MVP trophy, four scoring titles, five (and soon to be six) NBA First-Team selections and seven All-Star Game appearances, but he doesn’t have an NBA title to his name.  Read more…

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Chris Bosh Status and Insurance

May 22nd, 2016 No comments
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Chris Bosh is facing an uncertain future. That the Miami Heat could receive salary cap relief in the unlikely event that he does not return to play and it is determined that continuing to play would constitute a medically unacceptable risk is now widely known (and is described in detail in this post). There is also a separate, but related, concept at play: insurance.

This post describes how the Heat could collect insurance to offset Bosh’s future salary payments.

This post was written quickly, in answer to multiple questions I have received on the topic. While, as a person who has dealt with his own life-altering medical experience, I hate describing these types of issues, it seems irresponsible for me not to at least quickly address issues the Heat organization is surely considering. Hopefully these two posts will cover all related questions. 

I do, however, have one request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I do it strictly for you. I don’t get paid in any way (beyond donations). I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see it being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

The NBA has for decades secured league-wide temporary total disability insurance coverage for the benefit of its member teams. Every team in the league is required to participate in the program, which covers approximately 150 players per season.

That the league-wide program is mandatory is done for a key reason: Doing so allows the insurance provider to mitigate its risk, more accurately project potential claims, to feel confident it is not being asked to provide coverage for only the most injury-prone players and, ultimately, to reduce the cost of coverage and make it more affordable.

Such a program is possible only in a highly regulated environment like that in the NBA, where individual payouts are limited by maximum salary rules and teams are required to spend at least 90 percent of the salary cap each season on player salaries.

Under the terms of the NBA’s insurance program, each team is required to submit for underwriting consideration five players, each of whom must be among the team’s five highest-paid players based on either the current season or total remaining salary. Teams may submit for consideration more than five players if they so choose.  Read more…

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Chris Bosh Status Remains Unclear

May 21st, 2016 No comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can (and do so on a regular basis behind the scenes).

Miami Heat forward Chris Bosh is facing the harsh reality known to many who have been treated for blood clots: unfortunately, a recurrence can be common.

In February 2015, Bosh was diagnosed with a deep vein thrombosis (DVT), a blood clot which formed in a deep vein of his calf. A piece of that clot then broke off from the wall of the vessel, traveled via the bloodstream up the body, through the right side of his heart, and lodged in an artery of his lung, blocking blood flow through the lung – a very serious, even life-threatening, condition known as a pulmonary embolism (PE).

Pulmonary embolisms can cause damage to the lung tissue, and put increased strain on the heart. This could even cause the heart to become enlarged, or in a worst-case scenario, lead to heart failure.

Bosh was rushed to South Miami Hospital, where he avoided a potential life-threatening situation.

Blood clots can form in people who have a genetic predisposition to them, but most commonly they are caused by long periods of immobility in many cases from prolonged air travel (particularly for players of Bosh’s height, 6-feet, 11-inches, where leg room is more limited), after having undergone surgery, or after having experienced a recent trauma, making professional athletes, who frequently deal with one or all of these issues, particularly susceptible.

Blood clots are treated with anticoagulant drugs (blood thinners), which prevent further blood clots from forming as the body’s normal systems work to break up the existing clot(s). Blood thinners can stop clots from forming, slow down the formation of clots, stop clots from getting bigger, or prevent clots that have already formed from travelling to other parts of the body. Treatment is typically continued for three to six months.

Blood thinning medications save lives. But, they also pose one possible and very serious side effect: Bleeding.

Since blood thinners slow the clotting of blood, unwanted and sometimes dangerous bleeding can occur with the use of these medications. Although infrequent, uncontrolled bleeding caused by blood thinners can be very serious. A blow to the head, for example, can cause bleeding on the brain and kill you!

Doctors and teams are therefore hesitant to allow players on blood thinners to return to contact sports, where a potential trauma could have disastrous consequences.

Bosh missed the remainder of the 2014-15 while taking Xarelto, one of a handful of the newer anticoagulant drugs on the market today.

After treatment with blood thinning medications along with adequate rest after treatment, many athletes, including Mirza Teletovic with the Brooklyn Nets this past season and Anderson Varejao with the Cleveland Cavaliers two seasons prior, have been able to resume play and go on with their careers.

Bosh returned to play start the 2015-16 season. He indicated upon his return that, according to testing, he was not aware of any hereditary issues he may have that would increase the risk for recurring episodes, leading to optimism that he could resume his career without further incident.
Read more…

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Tyler Johnson Is a Big Part of Miami Heat Future

May 20th, 2016 No comments
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Update (6/21/16): As expected, the Miami Heat has formally extended a $1.2 million qualifying offer to Tyler Johnson. The Heat can now match any offer sheet Johnson signs with any other team, which cannot have a starting salary higher than $5.6 million. Johnson now officially reduces the Heat’s cap space by $1.2 million. If it times everything correctly, the Heat can now exceed the salary cap to retain him, whether it be by matching an offer sheet with a starting salary as high as $5.6 million or by signing him outright to a contract starting as high as a projected $6.2 million (the final figure will be determined at the end of July Moratorium). 

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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

As an example, the $6.2 million figure presented in this post is my own personal estimate. It has not yet been set by the NBA, nor can it be until the season is complete. It can’t be calculated with any degree of certainty, even by the Heat organization itself. It has been projected by various other people at wildly different amounts, with recent figures ranging from as little as $5.6 million to more than $8 million. The wide disparity comes in large part because of the various assumptions that need to be made at this point. Therefore, I might be inclined to humbly and respectfully question those who just so happen to come to my exact figure in regards to Tyler Johnson or Hassan Whiteside.

Tyler Johnson and Hassan Whiteside have some intriguing parallels.

Both were mid-year signees during the 2014-15 NBA season. Both have been playing under partially guaranteed, two-year minimum salary contracts that expire at the same time. Both will be free agents this July. And both represent a potential future of youth and athleticism at positions of critical need for the Miami Heat.

Despite the similarities, however, their free agency statuses are very different. Johnson’s future in Miami is far more secure, and the price it will take to retain him is far less expensive.

Johnson, like Whiteside, will be a free agent this summer, having accrued two years of service with the Heat. However, Johnson, unlike Whiteside, has accrued just two total years of NBA service, to Whiteside’s four. As such, he will face two critical restrictions that will ensure he remains in Miami.

First, Johnson will be a restricted free agent: This will give the Heat the right to keep him by matching a contract he signs with any other team.

Restricted free agency exists only on a limited basis. It is allowed only for players coming off rookie-scale contracts, and for players who have been in the league three or fewer seasons (as has Johnson). In order to make their free agent a restricted free agent, a team must submit a qualifying offer to the player between the day following the last game of the NBA Finals and June 30. The qualifying offer is a standing offer for a one-year guaranteed contract, which becomes a regular contact if the player chooses to accept it. The amount of the qualifying offer for Johnson will be $1,180,431. If the Heat extends Johnson a qualifying offer, it will have the legal right to match any contract he signs with any other team.

Second, Johnson will be subject to the Gilbert Arenas provision: This will limit what any other team can offer him, all the way down to an amount that the Heat, by rule, will be able to match.  Read more…

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Analyzing the Miami Heat Approach to Dwyane Wade

May 19th, 2016 No comments
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“The whole free agency thing… I don’t want to be in it this summer. I don’t want to be on the market at all…. I’m not curious at all… I want to be able to sign my deal [with the Heat] and move on, and not have to deal with any rumors, any free agency, any this, any that. This is where I want to end my career. So we’ll figure it out.”

That was Dwyane Wade, speaking in February to Barry Jackson of the Miami Herald about his desire to avoid testing the free agent market and instead wanting to wrap up a new deal without any of the drama of last offseason, when he and the Miami Heat were initially so far apart on contract negotiations as to threaten the continued tenure of the future Hall of Famer with the only professional organization he has ever known.

Wade’s preference was for a three-year deal that paid out somewhere in the range of $50 million. The Heat’s preference was for Wade to opt into his $16.1 million player option but, short of that, for a three-year deal that paid out somewhere in the range of $30 million. The two sides ultimately settled on a one-year, $20 million contract.

The Heat’s primary concern in taking such a tough stance with Wade wasn’t about how much a large salary would cost for the 2015-16 season, with the Heat projected at the time to become the NBA’s first-ever repeater taxpayer, but rather how a large multi-year contract would impact the team’s flexibility for the 2016-17 and 2017-18 seasons.

What was true last year remains true today, which could portend a second somewhat contentious negotiation.

Wade’s likely demands are both clear and reasonable: He’s going to want a three-year deal with as large a payout as possible, though he may be willing to take the payout over four years, allowing the Heat to reduce the annual cap hits associated with his contract while potentially paying him into retirement if he so chooses in the years ahead.

The Heat’s summer, however, will be primarily dictated not by Wade but by Hassan Whiteside, and by what Pat Riley chooses to do in the wake of a potential Whiteside re-signing. What the Heat can offer Wade will be a byproduct of those decisions.  Read more…

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Getting Creative With Dwyane Wade

May 18th, 2016 No comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

Dwyane Wade has long proven that winning NBA titles with the only professional organization he has ever known – the Miami Heat — is his primary motivation in playing the sport he loves so much.

His actions for the Heat organization over the course of his brilliant thirteen-year career have served as that proof. He has recruited for it. He has surrendered the spotlight (during the prime of his career) for it. He has sacrificed huge salary dollars — $25 million, to be exact — for it.

Wade may well go down in history as having been perhaps the Heat’s best ever player, despite having never been its highest paid player. He has guided the Heat to five NBA finals appearances and three NBA titles, and has done so while comporting himself with class and dignity.

The future Hall of Fame shooting guard has talked about playing at least three more years. He is likely to want that last large, multi-year contract to close out his career which he so rightly deserves for all that he’s done. But would he be willing to compromise on his desire, if it meant a legitimate shot to pad his title count?

If so, how big of a sacrifice would he be willing to make? And could, or would, the Heat return the favor?

If Wade were willing to make a sizable leap of faith, the Heat could have the tool its needs to manipulate the salary cap to an extreme advantage – maximizing cap space for BOTH this summer AND next summer, all while paying Wade a cumulative total that likely meets or exceeds his current desire.

Let’s review how.  Read more…

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