Two Low-Key Trades for the Miami Heat to Pursue at the Trade Deadline

While the Miami Heat, and a majority of N.B.A. teams, are focused on headline names being tossed around as possible trade deadline blockbuster candidates, the Heat has more pressing matters to concern itself with as well.

With the Heat attempting to move closer to signing three max-contract players — their own free agent Dwyane Wade and possibly two others – there are a couple of more low-key deadline deals that should be considered in pursuit of that goal.

Below are two suggested trade proposals which would help:

Suggested Trade Proposal #1
Heat Trade: Dorell Wright, James Jones, 2010 First Round Pick Jones_James Wright_Dorell
Heat Receive: Nothing or Expiring Contract(s), Future Second Round Pick

The Heat appear to be faced with the choice of dumping Dorell Wright or paying the N.B.A.’s luxury tax.

Wright is an emerging talent who is expendable only because the Heat is unlikely to be in a position to re-sign him this summer. Trading him would save the team approximately $8 million.

Several teams are showing interest. Memphis is making a strong push. In his fifth year, Wright is a preps-to-pros prospect the Heat selected in the first round (19th overall) of the 2004 N.B.A. draft. He would fit the Grizzlies’ expressed desire to add length, shooting and defense on the perimeter. The Grizzlies are reportedly prepared to offer a 2010 first round draft pick in exchange.

The prospect of trading 26 final games of Dorell Wright in exchange for approximately $8 million in cash and a 2010 first round draft pick merits serious consideration in its own right.

But the Heat has a bigger issue it needs to resolve. It needs to get rid of James Jones’ contract. If it’s even possible, the cost is going to be very high. 

When Jones was signed in July 2008, the contract was dubbed as one which ensures that Miami could still have maximum spending capability during the free agent summer of 2010. Less than two years later, it is plainly obvious to see that the contract structure was a significant mistake.

Jones has three additional seasons remaining on his contract beyond this season, which will pay him base salaries of $4.64 million (2010-11), $4.96 million (2011-12) and $5.28 million (2012-13), as well as an additional $10,000 in annual bonuses. Those three seasons are currently only 40% guaranteed, for $1.856 million (2010-11), $1.984 million (2011-12) and $2.112 million (2012-13). However, each season becomes fully guaranteed if he is not waived on or before June 30, 2010.

If they cannot find a trade partner willing to take on his contract, the Heat will surely terminate the contract by the June 30 deadline in order to capitalize on the partial guarantee. The Heat would thus effectively be paying $5.952 million to a player no longer on its roster, and the contract will eat up nearly $2 million in cap space for each of the next three seasons. It will therefore be a very difficult contract to move.

Wright therefore becomes leverage in a possible trade of Jones. Rather than taking back a first round pick for Wright, the Heat could test the trade market in search of partners willing to take on Jones in order to get Wright.

As an added inducement, the Heat could also include a 2010 first round pick of its own, which figures to be the No. 15 to No. 20 range. While the loss of the pick would hurt, there is a hidden benefit to Miami in trading it. First round draft picks carry cap holds as soon as they are selected in June, even if they are not yet signed. Those cap holds reduce cap space and, in turn, reduce spending power. For picks in the 15 to 20 range, the cap holds range from $1.1 million to $1.4 million.

Therefore, trading away the first round pick would save the Heat between $660K and $970K in cap space for this summer, after incorporating the impact of the roster charge, which, in its own right, would seemingly be too small to sacrifice the pick for anything other than a future such pick, unless the return justified it, as would be the case for a Jones trade. Trading away Jones would save another $1.856 million in 2010 cap space. And trading away Wright would cost nothing, given that the Heat is unlikely to re-sign him anyway.

To match up salaries for trade purposes, if necessary, the Heat would also be in position to take on players with expiring contracts of up to $4.4 million and still achieve the $8 million in savings for this season associated with dropping below the tax level.

Overall, the trade would save the Heat nearly $20 million — $8 million from trading Wright, as much as $1.4 million in salary savings for this season in trading Jones, $5.952 million in future commitments to Jones, plus a projected $4.1 million in future tax savings on Jones’ 2011-12 and 2012-13 cap hits.

However, despite the savings, the trade itself is less than stellar. Trading Wright could net the Heat a first round pick. The proposed trade of Wright and Jones could cost the Heat a first round draft pick. That would imply that it would cost the Heat two firsts round picks to get rid of Jones.  That’s too much. For that reason, the Heat should negotiate for a future second round pick in return.

Suggested Trade Proposal #2
Heat Trade: Daequan Cook, $3 Million in Cash, 2010 Second Round PickCook_Daequan
Heat Receive: Nothing or Expiring Contract(s)

Pat Riley made a horrific mistake three months ago when, working in advance of the league’s October 31 deadline for such moves, he picked up the 2010-11 rookie-scale option on the contract of 2007 first-round pick Daequan Cook. Had he failed to make such a move, Cook would have become an unrestricted free agent at the end of the season.

Apparently, working on a relatively low-cost contract, even with his desire to maximize its salary-cap space for 2010 free agency, Riley decided to move forward. Cook is now guaranteed $2.2 million for 2010-11. But with the Heat uniquely focused on conserving cap space, every dollar counts, and enduring the reduction in cap space to accommodate a marginal N.B.A. talent could prove costly.

Cook still holds a certain degree of value for teams who are seeking to bolster their three-point shooting corps. While he has struggled with his shot to start the season, he has undeniable potential in that regard, as evidenced by his victory in the Three-Point Shootout during the All-Star game festivities in Phoenix last February.

The beauty of this deal for any potential acquirer, though, is that it is essentially free. The N.B.A. trade deadline falls on February 18 this season, with less than one-third of the season remaining. At that point, Cook would be owed $440K for the remainder of the season and then another $2.2 million for 2010-11, for a total of $2.6 million. By offering up $3 million in cash, the limit that the N.B.A. allows in trade, the Heat would thus be paying the entirety of Cook’s contract, and providing an additional $390K profit for the trouble.

If necessary, the Heat can rather easily part with a second round pick as an added enticement. Miami is in possession of three such picks in the 2010 draft, including picks acquired from Toronto (Shawn Marion trade, 06/13/09) and New Orleans (Marcus Thornton trade, 06/25/09).

There wouldn’t be a whole lot to lose. Cook would have an expiring contract next season and, as he’d be coming off his rookie-scale contract, an acquiring team would be able to make him a restricted free agent. The Heat, in turn, would recover the $2.2 million in cap space.

To match up salaries for trade purposes, if necessary, the Heat would be in position to take on players with expiring contracts that roughly match the current salary of Cook, as well as the remaining salary obligations they are owed.

1 Response

  1. TKO says:

    I agree that giving up Wright and a 1st round pick would’ve been a lot just to get rid of Jones’ contract but it may have saved the Heat from trading away the four (4) 1st round picks in the LeBron James and Chris Bosh sign-and-trades.

    Trading away Jones would’ve allowed the Big 3 to get higher annual salaries. As a result, James and Bosh may have agreed to sign as free agents (with the smaller 8% annual raises) rather than pursue sign-and-trades just to get the 10.5% annual raises.

    I wonder if the Heat offered Wright and/or a 1st round pick to trade away Jones’ contract. Maybe the Heat didn’t want to give up both Wright and a 1st just to get rid of Jones’ contract. They could’ve traded away Wright and Jones in separate deals, getting a 1st for Wright and then attaching that 1st to trade away Jones’ contract. Maybe the Heat already thought of that; that’s why they get paid the big bucks. Oh well, food for thought.

    As I mentioned in another post, trading away Wright would’ve had a triple benefit: Matching up against the Hawks instead of the Celtics in the 1st round (a more favorable matchup for the Heat) in addition to the luxury tax and obtaining a 1st round pick. Or maybe a quadruple benefit if including trading away Jones’ contract.

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