Heat signs Patrick Beverley to a curious two-year deal
The Miami Heat signed Patrick Beverley to a two-year, $1.3 million fully-guaranteed contract on Monday. That much we know.
What we don’t know is why. Why did the Heat sign him? Why did they sign him so soon? And why did they fully guarantee his contract?
Despite the guarantee, Beverley is still far from a lock to make the regular season roster.
The Heat currently has 14 veterans under guaranteed contract. Teams can have as many as 20 players under contract during the offseason, but must pare down to 15 by the start of the regular season.
Beverley figures to compete with Kenny Hasbrouck, Shavlik Randolph, and Da’Sean Butler for the 15th and final spot. Hasbrouck and Randolph have each signed a $250,000 partially guaranteed two-year minimum salary contract, while Butler should be signed shortly. Despite the ACL tear in his left knee, Butler is currently thought to have the inside track.
Beverley was initially selected with the 42nd overall pick by the Los Angeles Lakers in the 2009 NBA Draft. His draft rights were immediately traded to the Heat in exchange for a 2011 second-round pick and cash considerations.
If Beverley should fail to make the opening day roster, the Heat would lose his draft rights. Pat Riley will have wasted the $1,500,000 (and the 2011 second round pick) it took to acquire his draft rights, the $473,604 he is guaranteed for this season, the $788,872 he is guaranteed for next season, and the $788,872 in tax consequences his contract will almost certainly cause next season. That’s a total of $3,551,348. Wasted.
So why did the Heat sign him?
A brief explanation of the rules related to second-round draft picks may help to understand why.
When a player is selected in the second round of the draft, he remains the exclusive property of the team that selected him until at least the September 5th immediately following the draft. At that point, the team needs to make a decision.
In order for the team to thereafter retain draft rights to the player, it must submit to him a “Required Tender” by September 5th. The tender is an offer of a contract that affords the player until at least the immediately following October 15 to accept, has a term of one season, calls for at least the minimum salary applicable to the player, and can be fully unguaranteed. The mere issuance of the tender extends the period during which the team has exclusive negotiating rights to the player until the following NBA draft.
If, instead, the team does not issue the tender by September 5, the drafting team would lose its exclusive rights to the player, and the player would become an unrestricted free agent the following day.
Once issued, the player can then choose to either forgo the tender and seek employment outside the NBA, accept the tender, or reject the tender and instead negotiate with the team for a better contract.
Players often forgo the tender.
This is a path taken by many second round draft picks who have been told that they have little chance of making the opening day rosters of the teams which selected them in the draft. Since the tender wouldn’t be guaranteed anyway, they instead choose to play elsewhere, typically overseas, both to gain experience and to earn a living. These players know that if they instead accept their tenders, they will ultimately be released, and left without an organization that believes in them and is grooming them. They also know that by the time they are released (perhaps after training camp, sometime in late October) most roster spots on teams around the world will have already been filled. They will have lost the opportunity to secure a roster spot elsewhere, without having earned a dime in the interim. Many simply cannot afford this option. By forgoing the tender, they give themselves these several months to find alternate work. By rule, once a draft pick signs a contract to play professional basketball somewhere other than in the NBA, the team retains the player’s draft rights for one year after the player’s obligation to the non-NBA team ends.
This is the path Beverley chose last year. After failing to make the Heat’s regular season roster, Beverley accepted a two-year, €420,000 contract (about $600,000 at the time of signing) with Greek powerhouse Olympiakos. In 41 games of Greek League and Euroleague play, Beverley contributed 3.9 points, 2.4 rebounds and 1.1 assists as a reserve, while shooting 55.7% from the field.
Players can also accept the tender.
Under this scenario, the player would be under contract. It would likely be an unguaranteed one-year minimum salary contract. In Beverley’s case, if things played out this way, he would have been competing against Butler, Randolph and Hasbrouck for one of the Heat’s final roster spots on a make-good contract, but without the partial guarantee they received.
With these rules in mind, Beverley’s relationship with Olympiakos offers insight into to why the contract was offered.
The second season of his two-year, €420,000 contract was mutually terminated in June, despite his successful play. Olympiacos was in the midst of a reshaping. After a season largely considered a failure – despite the fact that they had won their first Greek Cup in eight years, and reached the Euroleague and Greek League Finals – head coach Panagiotis Giannakis had been fired and a major roster restructuring was about to ensue. Beverley didn’t want to stay without Giannakis, and the team was planning to move in a different direction. The two sides parted amicably.
Beverley wanted to try his luck in the NBA. It was a lifelong dream, and the driving force behind every decision he has made over the course of his wildly interesting, trying, tumultuous, vindicating and encouraging 21 years.
If Beverley’s mission was to exhaust all possible NBA alternatives before considering a return to Europe, accepting the tender would have been the way to go. He would then have been under contract with the Heat. If the Heat were to subsequently waive him, likely in late October, he would have become an unrestricted free agent, free to try out for any NBA team. Accepting the tender would therefore have represented Beverley’s best chance of making an NBA roster this season, at the substantial risk of not finding work elsewhere (whether it be with another team in the NBA, in Europe, or elsewhere).
If he communicated such an intention to Riley, it would certainly explain the contract offer, and quite neatly. The Heat would have been forced to offer Beverley a one-year tender anyway. Why not instead lock him up for two years?
But his August 2nd signing date was still more than a month away from the Heat’s September 5th deadline.
So why did the Heat sign him so soon?
Apparently, after its overhaul was completed, Olympiakos changed its stance, and wanted its former point guard back. And it was more than just a passing interest. According to Red Planet, a Greek media outlet, Dusan Ivkovic, the new head coach of Olympiakos, was reported as saying on July 23 that he was “very interested” in having Beverley return.
Riley was in a position of leverage. He could have withheld the tender until the September 5th deadline, putting a potential Olympiakos offer at risk of being withdrawn and thus forcing Beverley’s hand to either accept it or risk losing it.
But Riley didn’t take that approach. One week later, Beverley was signed. It would appear that Riley really wanted Beverley on the Heat roster. Here and now. This season. Not sharpening his game for another year overseas.
It was an interesting development, one that could have several potential roster implications.
It almost certainly means that Hasbrouck no longer has a shot to make the Heat’s opening day roster.
But if Beverley, Hasbrouck and Butler were all competing for the one remaining spot, and that spot has been set aside for Butler, there would still be no space for Beverley even if Hasbrouck were to be waived.
Why then would Riley offer Beverley a contract – with no guarantee that he’d make the opening day roster and knowing full well that his draft rights would be lost if he didn’t – if he instead could have retained Beverley’s draft rights by forcing him back to Olympiakos?
Could it be that Riley has in mind to open up a second roster spot? If not, he’s just throwing away a $3,551,348 investment.
It could mean that one of the Heat’s 14 veterans under guaranteed contract may not be safe.
So who could this at-risk player be?
We know it’s not Chalmers, Wade, James, Bosh, Anthony, Arroyo, House, Miller, Haslem, Ilguaskas or Jones. It’s probably not Pittman. Riley has an unusual affinity for Howard (despite the fact that he’s not going to contribute anything that he couldn’t otherwise provide as a coach and the fact that he caused Riley, according to Riley’s own words, the worst pain of his entire NBA life). That leaves only Magloire.
Could Beverley be competing for the roster spot that is currently being occupied by Jamaal Magloire?
None of this, however, explains the guarantee.
So why did the Heat fully guarantee Beverley’s multi-year contract?
Nothing explains the multi-year guarantee.
Beverley was not like Hasbrouck or Randolph. He was not an unrestricted free agent. He did not have the option to instead sign with another team. He was the exclusive property of the Heat as long as the Heat extended him a fully unguaranteed tender by September 5th. If he wanted to play in the NBA, he would have been forced to accept it. He would have had no other choice.
Beverley now becomes the only draft pick in the entire NBA to have tried out for his team, fail, and subsequently receive a multi-year guarantee the following season.
Perhaps a partial guarantee – perhaps the $250,000 the Heat gave to Randolph and Hasbrouck, an amount roughly equivalent to the second year salary in Greece that he had turned down – in exchange for a two-year deal would have been reasonable. His effort alone warrants that much. But certainly not a multi-year full guarantee which, if he is to be waived, not only increases team salary this year but next year as well, in what figures to be a more restrictive salary cap environment under a new collective bargaining agreement.
Despite the guaranteed contract, Beverley is no guarantee to make the opening day roster.
The battle between Beverley, Hasbrouck and Butler figures to be the most interesting, and most debated, storyline remaining this offseason. Hasbrouck brings with him the better offensive repertoire. Beverley brings with him the superior defensive ability and higher ceiling. Butler is the unknown coming off major injury.
One, perhaps two, will likely make the team. The other(s) will become an unrestricted free agent.
It should be fun.