Miami Heat’s True Cap Position for 2010-11

Miami Heat president Pat Riley has staked his reputation on the team’s, and more specifically his, ability to lure two premier free agents to South Florida to play alongside future Hall-of-Famer Dwyane Wade. Riley will be gunning to create a championship caliber product through what will be one of the most talented free agent markets in league history.

Exactly how much cap space he will have to work with in pursuit of that goal has been the subject of much confusion. There have been many figures published, showing numbers anywhere from $12 million to more than twice that figure.

What’s the true number?

Well, that depends on what you want to include.

Should non-cash charges be included? If so, which ones? Cap holds? Roster charges?

Should Dwyane Wade be included? He has a player option he is sure to decline in favor of becoming a free agent himself.

Should James Jones be included? He has a large, cap-space-destroying $4.6 million salary which is only partially guaranteed. The Heat is certain to terminate the contract to capitalize on the guarantee.

Should Joel Anthony be included? He has a player option which the Heat cannot control. If he exercises it, the team’s cap space will be reduced accordingly.

The safest assumption would be to predicate any underlying assumptions on factors the Heat can, in its sole discretion, control with the understanding that others factors not in its control have affect the numbers accordingly.

With that in mind, below is a look at the Heat’s salary commitments for the 2010-11 season (with footnotes below):

Dwyane Wade: $0 (1)

Michael Beasley: $4,962,240

Daequan Cook: $2,169,857

James Jones: $1,856,000 (2)

Joel Anthony: $885,120 (3)

Mario Chalmers: $0 (4)

First Round Draft Picks: $0 (5)

Roster Charges (9 total): $4,262,436 (6)

Total Salary: $14,135,635

The above figure, $14,135,653, represents the truest figure for the Heat’s team salary, based on how things currently stand.

Subtract ­­­­$14,135,653 from whatever the finalized salary cap number turns out to be, and you’ll end up with the amount of cap space Pat Riley has to work with. To recalculate the team’s maximum cap space as each new player is added, you just need to add the new salary and then subtract $473,604 from the roster charge amount above (until, of course, it gets to zero).

Current projections call for salary cap in the $53-54 million range.


(1)     Wade has a $17,149,244 Player Option for 2010-11. He will most definitely forgo this salary in favor of signing a new long-term contract this offseason, even though he would only be eligible for a maximum salary of $16,508,968 in the first year of any new contract he signs (a $580,336 difference). He will do this for two reasons: (i) it allows him to test the free agent market, and (ii) it allows him to sign a new contract for up to six years in length, with annual raises of up to 10.5% of his new 2010-11 salary.

(2)     James Jones’ contract calls for the following payments: (i) $4,650,000 in 2010-11, (ii) $4,970,000 in 2011-12, and (iii) $5,290,000 in 2012-13. His contract is only partially guaranteed through June 30, 2010 (after which it becomes fully guaranteed). That means if the Heat decide to terminate his contract, they will still owe him (and the team’s total salary will still include) the following amounts: (i) $1,856,000 in 2010-11, (ii) $1,984,000 in 2011-12, and (iii) $2,112,000 in 2012-13.

(3)     Joel Anthony has a Player Option for 2010-11 at the minimum salary for a three-year veteran of $885,120. If Anthony chooses not to exercise the option, and instead test the free agent market, the Heat will recover the cap space.

(4)     The Heat holds a Team Option on Mario Chalmers for 2010-11 at the minimum salary for a two-year veteran of $854,389. The Heat can choose to not exercise it in order to recover the cap space, or keep him for that amount.

(5)     First (but not second) round draft picks are paid based on a salary scale, and they count against the salary cap as soon as they are drafted (even if they are not yet signed). The Heat has at least one draft pick in the upcoming 2010 NBA draft, and could have a second from Toronto if the Raptors make the playoffs. In order to know exactly how much these picks would count against the cap, one needs to know where in the draft they are selected. However, the Heat can choose to forgo, renounce or trade the pick if they would rather use the cap space to sign a free agent.

(6)     When a team carries fewer than 12 players on the roster at any time during the offseason, a roster charge is automatically added. The amount of the charge is equal to the rookie minimum salary ($473,604 for next season) for each player fewer than 12. This is only a temporary charge. Every time a team with fewer than 12 players signs an additional player, a roster charge gets reimbursed to the team’s total salary. Since the Heat will have as few as 3 players on its roster to begin the offseason (Beasley, Cook and Anthony), it will incur as many as 9 charges. (Bear in mind that a team’s own free agents are included in a team’s roster for purposes of the roster count and so, in practice, the Heat’s team salary will incur no actual roster charges to start the summer but rather instead numerous cap holds. However, the above analysis attempts to calculate the team’s maximum cap space, which presupposes all cap holds are renounced). 

2 Responses

  1. jjfdez says:

    Great info…the sad part is what do you do with James Jones. The question is, do you think that you could find someone better than him for the difference of what is guaranteed and what you owe him? Unfortunately, since you have not played him you don’t know or you do know and that is why you don’t play him.

  2. Albert says:

    Great point. Jones’ salary is 40% guaranteed; the difference is $2.794 million.

    While I don’t think this amount is large enough to acquire a better talent, it is very possible that the difference — when combined with the team’s remaining cap space after (hopefully) acquiring a second max contract player — would be more valuable to the Heat.

    The Heat could also choose not to go after a second outside free agent, instead electing to bring back Jones and perhaps Dorell Wright.

    A decision on his future will need to be made by June 30, 2010 — before free agency begins but after the 2010 NBA draft. If he were to be released, the Heat would still need to pay him his partial guarantee for the next three seasons. Should the Heat choose to keep him, all three seasons would become fully guaranteed (the third being a player option).

    At this point, it would appear Jones is not part of the team’s future plans.

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