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Should the Heat Trade into the First Round of the 2013 NBA Draft?

The Miami Heat have no first or second round picks in the 2013 NBA Draft, which is to be held on June 27 at the Barclays Center in Brooklyn, New York.

The Heat’s first round pick was traded to the Cleveland Cavaliers as part of the LeBron James sign-and-trade on July 9, 2010. It was subsequently traded to the Los Angeles Lakers, and is now the property of the Phoenix Suns. It has become the No. 30 and final pick in the round.

The Heat also acquired a first round pick from the Philadelphia 76ers in the Arnett Moultrie draft-and-trade on June 28, 2012. However, the pick is lottery protected through 2015; if not conveyed by 2015, it will become consecutive second round picks in 2015 and 2016. Since the Sixers missed the playoffs this past season, the pick will be conditionally transferred to the Heat next year.

The Heat’s second round pick, which has become the No. 60 pick in the draft, is property of the Memphis Grizzlies. It was included in the Dexter Pittman trade on February 21, 2013.

Currently a bystander to Thursday evening’s activities, should the Heat attempt to trade into the first round of the draft? 

The new CBA carries scary penalties — a more punishing luxury tax that kicks in next season, catastrophic penalties for repeat payers, and roster-building restrictions for teams that even approach the tax threshold.

Those changes have teams clinging more tightly to first round draft picks, a hoarding mentality that even extends to pseudo contenders with picks slated for the end of the first round — a place where the expected return is a borderline rotation player.

Even if a pick at the bottom of the first round has a 20% chance of turning into a useful NBA player (and that’s a very rough estimate), it has a 100% chance of turning into a cheap asset for the player’s first four years in the league. That affordability, plus the lure of the unknown teenage player, has jacked up the league-wide value of future first-round picks. Teams are beginning to view their picks not in a vacuum, but rather as ingredients in a collection of assets they might one day combine in a trade package for a really good NBA player. In this sense, then, perhaps the strict new CBA has awoken teams to the fact that they shouldn’t be throwing around future first-round picks for, say, a  few million dollars in cash.

It’s clear the league is in the middle of a major adjustment in valuing first-round picks – an adjustment that saw buyers holding them like gold at the trade deadline last season, while sellers, or teams with cap space and trade exceptions, were demanding first-round picks as if teams were still willing to give them up willy-nilly.

We saw it again just last week — where a second, and presumably very low, first round pick was all that kept Boston Celtics coach Doc Rivers from winding up in Los Angeles as a member of the Clippers. After a week of negotiations, the Celtics ultimately relented in their demands, and the Clippers were only forced to part with a single first round pick. The Celtics have since been trying to deal Paul Pierce for a first round pick, but no trade partner has surfaced at that price. A couple of second rounders is the best they’ve been able to generate. For a star on an expiring contract. 

In such an environment, what would it even cost to pry away a first round pick? In the 2010 NBA Draft, pick No. 25 was sold for cash considerations. Those types of deals are getting harder to find. There hasn’t been a single first round pick sale for cash since. In the 2011 draft, it cost the Heat a future second round pick (projected at the time to be at the top of the round) and cash considerations to move up just three spots.

Can the Heat afford to be giving up assets in exchange for such a risky return? Most picks in the mid-20s on down result in very little NBA productivity anyway.

Cash has never been thought of as an asset for us as fans because it has never directly limited the Heat’s future options; it really only ever cost owner Micky Arison money. Thus, in the unlikely event there were to be a pick to be auctioned off to the highest bidder, paying cash for it would seem like an attractive option.

But Arison has already paid $90 million on team salary this past season. That amount figures to increase in each of the next two seasons. Is it fair to ask him to spend millions more on such an uncertain investment?

Even if you get past that moral dilemma, would he have enough money to make an attractive bid? For the first time ever, cash considerations are now limited beyond the $3 million per trade it has always been.

The amount of cash a team can pay or receive per season in all trades is limited to the “Maximum Annual Cash Limit,” which for this season is $3.1 million. The Heat has already spent $300K (on the Dexter Pittman trade). That leaves just $2.8 million left over to offer. Is that enough?

If it’s not enough, the Maximum Annual Cash Limit increases to $3.2 million next season. The Heat could agree to a trade at the time of the draft and wait until the first week of July to execute it. But would you be willing to spend all of your cash for the year just three days into the season – with an entire offseason, a trade deadline, and the 2014 NBA Draft all still to come?

Cash, therefore, may not be the best alternative in a trade.

“Pick swapping” strategies have been quite common under the auspices of the new CBA, and might increase in intensity in the days to come given the weak nature of this draft. But even that carries substantial complications for the Heat.

Picks can only be traded up to seven years into the future. The Heat has already traded away a bunch. The only ones remaining are its own picks in 2014, 2016-2019 and the conditional first rounder received from the Sixers. But teams are also restricted from trading away all of their future first round picks in consecutive seasons. Therefore, the Heat can’t trade away a first round pick of its own, unconditionally, until 2017 at the earliest. Would you really want to trade away a first round draft pick from the first season after the Big Three are no longer under contract? That pick could become quite valuable.

The Heat can trade away a pick prior to then, but only on condition that it receives the Philly first rounder, which may not happen. The Philly pick itself can be traded at any time. But do you really want to sacrifice what could potentially become a high-teens pick in what is widely considered to be a strong draft in exchange for a pick in this draft?

Trading picks, therefore, also presents a significant challenge.

Whatever trade package could be negotiated for in exchange for a potential pick – whether it be cash, future picks, a combination, or whatever else – do you really want to sacrifice any of the team’s few remaining trade assets on a player who will have an uncertain NBA future, when there are so many more pressing needs at hand (like getting rid of Joel Anthony’s contract) that could require them? Or would the Heat be better served focusing its time in utilizing its vast scouting infrastructure to scour Europe, Asia, Latin America, the D-League and NBA free agency to uncover a hidden gem?

The Heat is unquestionably getting older as a team, a problem they could have mitigated in years past if they had a better long-term vision. But this is still a team that is two-deep with quality talent at all positions but center.

The Heat just shredded its regular season competition in rolling to the tenth best record of all time, including the best second half of the season record in league history. If Wade is healthy, the Heat probably does the same in the playoffs as well.

But the team did have its issues. Its diminutive front line made the offensively-challenged Pacers 7-foot-2 monster Roy Hibbert appear like a Hall of Fame center in the Eastern Conference Finals. A healthy Derrick Rose might do the same to the 6-foot-11 Joakim Noah in Chicago next season.

The Heat knows what everybody else does. If they want to win a third straight NBA title, they better get some size. They will likely get Chris Andersen back. They will certainly try out Justin Hamilton. They will almost certainly make a play for Greg Oden or Samuel Dalembert in free agency. Patience could be key.

Wouldn’t it be better to pursue those options with vigor, scour the universe of professional basketball for a hidden talent, play out the season, and then head into the considerably stronger 2014 NBA Draft with two first round picks – it’s own, and the likely high-teens pick from Philly – and a second round pick, to give the Heat all kinds of flexibility heading into perhaps the second-most uncertain offseason in team history?

Can you identify a player in the 2013 NBA Draft whose contributions for the upcoming season would definitively warrant sacrificing such an opportunity?

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  1. berkeley223
    June 25th, 2013 at 12:21 | #1

    Albert, congrats on your question to Ask Ira today. First time I’ve ever seen Ira be mistaken about anything team related, and when I saw the name of the person who asked the Q, I knew it was you!

  2. berkeley223
    June 25th, 2013 at 12:22 | #2

    but I do see you say above that the Clippers missed the playoffs this past season. They didn’t. Typo?

  3. June 25th, 2013 at 12:31 | #3

    @berkeley223
    Thanks for the note. No congratulations necessary though. I help out lots of beat writers and other NBA sites around the league. :)

    This was just one example. The concept he describes in his Ask Ira answer from today, that of the Heat being eligible to sign Ray Allen to a multi-year contract with a slightly higher starting value, was one I gave him. But don’t assume all questions asked by Albert are me; most aren’t.

    Pay closer attention :). Ira is mistaken quite a bit.

  4. June 25th, 2013 at 12:33 | #4

    @berkeley223
    Yes, clearly the Moultrie trade was with the Sixers, not the Clippers. I’m an idiot for having written that. But I fixed it. Thanks!

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