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Taking Stock of the Events of the Past 24 Hours

Draft night appears to be nothing more than a precursor to July 1 for Pat Riley and the Miami Heat this year.

Already poised to be a major player in the free agent sweepstakes that begin next week, Miami has just freed up an additional $3.4 million in extra spending money.

On Wednesday, the Heat traded guard Daequan Cook and the No. 18 pick in the upcoming draft to the Oklahoma City Thunder in exchange for the No. 32 pick. The trade clears not only Cook’s $2.2 million salary for next season, but it also removes the $1.2 million the Heat had to budget for its first round pick.

More activity is likely, with the Heat still looking to clear additional space. The team’s first priority will be to move the burdensome contract of James Jones, but that appears nearly impossible to do. Michael Beasley and Mario Chalmers could also be dealt. In the case of Chalmers, Miami need not worry about structuring a trade. A receiving team could utilize the minimum salary exception to acquire the second year guard.

Unless Miami makes a trade to move back up into the first round, it seems clear that the Heat prefers to rebuild in free agency, without the troubles of another potentially misguided first round selection.

The team still has four second round picks with which to work – Nos. 32, 41, 42 and 48. Look for Miami to construct a trade – possibly up, but more likely out – with some of them. For the rest, upon each player’s selection, he would become the property of the Heat for up to a year. The Heat is not required to offer a guaranteed contract to any of them in return. Unlike first round picks, second rounders do not reduce a team’s cap space immediately upon selection.

The draft is scheduled to start tomorrow at 7:00 pm, and should run through midnight. By the time it is over, the Heat will have gained additional clarity on its roster for next season. Center Joel Anthony is required to inform the team, by no later than tomorrow night, if he has chosen to exercise his player option in the amount of $885,120. If he does not do so, his contract will – by default – be terminated. It seems likely that Joel will opt out.

The team will decide whether or not to keep James Jones by June 30.

The Heat figures to enter the off-season with two players under contract, Michael Beasley and Mario Chalmers, and a total guaranteed payroll of $7,672,629. With the cap projected at $56.1 million, Miami figures to have some $48,427,371 of available room.

Allow me to explain the concept of “roster charges” for a moment. For every player fewer than 12 carried by the Heat in the off-season, a roster charge in the amount of $473,604 needs to be added to team salary. However, roster charges are temporary in nature. As a team builds back up to 12, the charges are removed. Therefore, roster charges do not reduce cap space; rather, they reduce the amount of money that can be allocated to the next player acquired.

As you dream up your own individual scenarios, roster charges must be factored into your equations. If the Heat chooses to renounce everyone and everything other than that which is guaranteed (which it won’t, for practical reasons), Miami’s team salary to start the off-season will be the $7,672,629 plus $4,736,040 (ten roster charges), or $12,408,669.

For every player added thereafter, you would add to this number the amount of his 2010/11 salary (ignoring any subsequent years for players signed to multi-year contracts) and subtract one roster charge. For every player subtracted thereafter, you subtract from this number the amount of his 2010/11 salary and add one roster charge. (Note: there are some minor exceptions to this rule, but these are very detailed and very rare cases).

Below are the potential maximum contract amounts of several key free agents for next season (the ones with an asterisk are estimated, subject to the release of salary cap figure on July 8):

Dirk Nowitski: $20,785,500
Amare Stoudemire and Yao Ming: $17,197,241
Chris Bosh, Dwyane Wade and Lebron James: $16,568,908
Carlos Boozer and Joe Johnson: $15,762,300 *
David Lee and Rudy Gay: $13,135,250 *

Dream big (so we can all be disappointed and depressed together)!

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