Miami Heat Are Talking Trade, But With Limited Assets to Offer
Note: This post has been updated from December 6 to reflect recent events.
The Miami Heat organization appears to be content with its current roster.
The team’s three stars – Dwyane Wade, LeBron James and Chris Bosh – are all producing career highs in scoring efficiency while playing career lows in minutes, a strategy designed to preserve their health and endurance for the playoff run ahead. The team can afford to implement such a strategy because it has the most and highest quality depth in the Big Three era. And it still has a potentially game-changing piece in Greg Oden who has yet to play this season but is reportedly making strong progress toward that goal.
The team is feeling so comfortable with its roster, in fact, that it, somewhat surprisingly, chose to guarantee the contract of Roger Mason Jr. and, in doing so, kept its roster at the full 15-player maximum, despite the fact that a seemingly wonderful alternative in Andrew Bynum had become available on the free agent market and had listed the Heat as a preferred destination.
If the Heat is to reciprocate that interest, it first needs to clear a roster spot. With its already monstrous payroll and limited backcourt depth, the preferred way to do that is to trade away the untenable contract of seldom-used center Joel Anthony.
They must move quickly. The Heat has only until the Feb. 20 trade deadline to execute a trade prior to the end of this season. And Bynum is currently an unrestricted free agent who can sign with any team at any time.
Anthony is being paid $3.8 million this season, and he has a player option for next season at the same value which he is sure to exercise. When including the tax, he will cost the Heat $11.8 million this year and as much as $17 million next year. The Heat can save all but the $1.7 million of that and counting they’ve already paid him in salary for this season. What would you trade in exchange for $27 million?
Anthony’s contract was perhaps the singular worst decision of the Big Three era. Beyond the extreme financial costs, about which most Heat fans don’t really care, it’s starting to have significant roster-related effects. The financial burden it creates is perhaps the lone reason why the Heat chose to waive Mike Miller via the amnesty process, why they haven’t utilized their mid-level salary exception thus far this season, and why they have thus far reportedly shown no interest in Bynum.
The Heat realize what a burden Anthony’s contract creates. They’ve been rumored to be actively trying to trade him for several months now. Finding a willing trade partner has thus far been impossible.
The Heat needs to identify a potential partner with the necessary room to swallow Anthony’s contract and the willingness to entertain a trade. There aren’t many. There are currently only three teams with the necessary cap space – the Orlando Magic, Philadelphia 76ers, and Phoenix Suns – and another two with a trade exception large enough without itself exceeding the tax threshold – the Denver Nuggets and Golden State Warriors.
None is likely as a trade partner, particularly since the Heat have such limited assets to offer as an inducement.
Beyond player assets, of which they can’t really (or, in some cases, won’t) spare any, the Heat could offer up to $3.2 million in cash, the maximum annual cash limit for the 2013-14 season.
They can also offer draft considerations. But, given the pick obligation they still owe to satisfy the LeBron James sign-and-trade from the Cleveland Cavaliers, any pick trades would be severely limited at this point.
The trading of N.B.A. draft picks is restricted by a series of intricate rules that have been put in place in order to protect teams that are trading away the picks from themselves. History suggests that teams need these protections so as not to unwittingly destroy their own franchises.
No one N.B.A. personality is more historically-renown and nationally infamous for his incompetency than Ted Stepien, former owner and de facto general manager of the Cleveland Cavaliers. In April 1980 he paid $2 million for a 37% ownership stake in the team, becoming the major shareholder. Eventually, he owned 82%.
Stepien thought he could quickly assemble a competitive team, but he proved to be a horrendous judge of basketball talent. He spent ludicrously lavish sums of money on marginal players and made a series of ludicrously one-sided trades.
His first big move happened in February 1980, two months before his initial purchase went through: He flipped backup guard Butch Lee and a 1982 first-round pick (needless to say, an incredibly valuable pick considering the Cavs were horrendous) to the Los Angeles Lakers in exchange for backup forward Don Ford and a 1980 first-round pick (needless to say, not a great pick considering the Lakers were competing for titles). Two years later, the Lakers picked future Hall-of-Famer James Worthy first overall with Cleveland’s pick.
It got worse from there.
Between September 1980 and February 1981, Stepien sent another four unprotected first-round picks to the Dallas Mavericks from 1983 to 1986 in three separate trades for four players ranging from borderline starter to unequivocal backup, planting the seeds for a title contender in Dallas in the process. Those picks eventually became Derek Harper (1983, 11th overall), Sam Perkins (1984, 4th overall), Detlef Schrempf (1985, 8th overall), and Roy Tarpley (1986, 7th overall).
In a span of less than a year, Stepien had traded away the team’s incredibly valuable first round picks in 1982, 1983, 1984, 1985 and 1986 while extracting nothing better than a borderline starter on one of the worst teams in the league in return, every one of whom would ultimately be gone in less than four seasons.
The vultures were constantly circling, eager to see what they could extract from Stepien.
In a series of trades with the Pistons in 1982, Detroit extracted eventual four-time All-Star Bill Laimbeer and later a 1986 second round pick which would ultimately become Dennis Rodman.
A December 6, 1982 article in The New York Times described the Cavaliers during Stepien’s ownership as “the worst club and most poorly run franchise in professional basketball.”
Things got so bad that the N.B.A. was forced to make history three different times.
First, to discourage carnivorous thinking on the part of rival owners, then N.B.A. Commissioner Larry O’Brien stepped in and temporarily barred Stepien from making any further trades while the league conducted an investigation of the team’s operations.
Second, when Stepien sold off the team in 1983, just three years after he had purchased it, the N.B.A. granted the new owners four compensatory first round picks from 1983 to 1986 to help in the team’s recovery.
Third, the N.B.A. enacted a new rule prohibiting teams from trading away all of its future first round draft picks in consecutive years, which naturally ended up being called the “Ted Stepien Rule.” The rule is only forward-looking; it doesn’t concern itself with draft picks that have since passed. It also concerns itself only with all picks a team has in its possession in consecutive years; if a team has acquired a pick in trade for any given year, thus producing two such picks, it can freely trade one as well as its pick in the following season as long as it retains the other.
Beyond the restrictions of trading away first round draft picks in consecutive seasons, by virtue of a rule added in 2000, teams are also prevented from trading away picks (first and second rounders) more than seven years into the future, which has come to be known as the “Seven Year Rule.” This helps to prevent a team from mortgaging its distant future for the benefit of the present.
Teams can also place “protections” on the picks they trade away. It is common to “protect” picks depending on their position in the draft (for example, “we keep it if it ends up in the lottery, otherwise you get it”). This helps to avoid situations where future underperformance by teams can make certain picks they have traded away much more valuable than originally intended.
It is common for teams to trade away draft picks with protections to ensure that the pick is conveyed in first year in which the conditions are met. It is also common for the protections to relax over several years. This is done, in part, because picks with protections can have uncertainties as to which future season they will be conveyed, which can complicate matters as teams attempt to operate within the confines of the Stepien and Seven Year rules.
The Heat, to start the summer of 2010, had eight first round draft picks over the following seven years – including a 2011 first round pick acquired from the Toronto Raptors in Shawn Marion-Jermaine O’Neal swap on February 13, 2009, which was lottery-protected through 2014, and completely unprotected in 2015 if not previously conveyed.
Of the eight, the Heat traded away four – two to the Raptors for Bosh, and two to the Cavaliers for James (1).
To the Raptors, the Heat returned the previously-acquired 2011 Toronto pick, thus leaving the Heat with all seven of its own first round picks over the next seven years (one per season). They also traded their own 2011 first round pick in the deal, which was lottery-protected. If the pick was not conveyed in 2011 (i.e., if the Heat didn’t make the playoffs next season), the Heat’s draft pick obligation was to be extinguished; instead, the Heat would have been required to convey $3 million in cash. The Heat ultimately surrendered the Toronto pick and its own 2011 first round pick, which satisfied the obligations of the Bosh trade in full.
The Cavaliers were more demanding.
Having traded away both of its first round draft picks in 2011, the Heat were prohibited (in accordance with the Ted Stepien Rule) from trading away their 2012 first round pick. The Heat thus, by rule, did have a selection in the 2012 N.B.A. Draft. Because the Cavs were unable to acquire the Heat’s 2012 first round pick, they did negotiate the right to swap the Heat’s pick with that of their own, in the event the Heat were to receive the higher pick. But for that to happen, the Cavs would have needed to end up with the better overall team record in 2011-12, which didn’t happen. Thus, the swap right expired unexercised.
The Heat ultimately utilized their 2012 pick to select Arnett Moultrie, who was immediately traded to the Philadelphia 76ers in exchange for a future first round pick from the Sixers. The pick is lottery protected through 2015. If not conveyed by 2015, it will become consecutive second round picks in 2015 and 2016. At this point, it seems likely to result in the pair of second round picks.
The Cavs also received the Heat’s first round pick in 2013 in the James trade. But the Heat did demand some protections to ensure it wouldn’t be more valuable than was projected at the time. The pick was Top-10 protected in 2013 and 2014. If not conveyed by 2014, it would become completely unprotected in 2015. The pick was ultimately conveyed in 2013.
The Heat, by rule, was and is required to retain its 2014 first round pick (to satisfy the Stepien Rule). Thus, the Heat will have a first round pick this summer.
As the final piece to the James trade, the Cavs will also receive a second first round pick from the Heat. But it too has protections to ensure it won’t be more valuable than was originally projected. It will be Top-10 protected in 2015 and 2016, and fully unprotected in 2017 if not already conveyed.
This one remaining first round pick obligation makes it exceedingly complicated for the Heat to trade any of its future first round picks in any potential trade. The Stepien rule will, in effect, make it impossible for the Heat to trade away any first round pick, unconditionally, until the year 2019. That’s a whopping six N.B.A. drafts from now!
The Heat can trade earlier picks, but such trades would need to contain qualifications that would keep them in compliance with the Stepien Rule under all circumstances, no matter how implausible. Thus, here is a run-down on all of the first round picks the Heat can trade away prior to the 2014 N.B.A. Draft, and all the qualifications they’d need to be subjected to:
2014 N.B.A. Draft
The Heat owns its first round pick, but it can only be traded away on condition that the Philly pick becomes a 2014 first round pick. In this case, the Heat could trade either its own first round pick or the first round pick from Philly (but not both). For that to happen, though, the Sixers would need to make the playoffs this season. That seems decidedly unlikely. So, in all practical reality, a 2014 first round pick trade is out.
2015 N.B.A. Draft
The Heat can’t trade its first round pick because it is owed to Cleveland. There are protections on the pick, however, that would enable the Heat to retain it under certain circumstances; it’s Top-10 protected through 2016. Therefore, if the Heat finish the 2014-15 season with one of the ten worst records in the N.B.A. (or one of the worst 14 records in the league and are lucky enough to receive a first, second, or third overall pick through the ping-pong ball lottery process), they would retain the pick. But, even then, it couldn’t be traded because of the possibility that the Heat would owe Cleveland its first round pick in 2016 (and would thus violate the Stepien Rule).
There is one borderline ludicrous scenario under which the Heat could trade its 2015 first round pick – if it were to somehow retain its own pick (i.e., because it was a Top 10 pick, which would cause the pick obligation to Cleveland to be deferred to 2016) AND the Philly pick becomes a 2015 first round pick. In this case, the Heat would own two 2015 first round picks, and could trade either one (but not both) at its discretion.
2016 N.B.A. Draft
This pick cannot be traded under any circumstances, no matter how ludicrous a scenario can be contemplated.
In all likelihood, the Heat will be sending its 2015 first round pick to Cleveland, to satisfy the last of its obligations in the James trade. If that happens, as per the Stepien Rule, this pick cannot be traded.
There is also a small possibility that this trade itself will be conveyed to Cleveland to satisfy the last of the James trade, in the event that the Heat receives a top 10 pick in 2015 and a pick not in the top 10 in 2016. In this case, the pick would be conferred to the Cavaliers, and thus not be eligible to be traded.
If the pick has not been conferred to Cleveland in 2015 or 2016 it will, by rule, be conferred in 2017 (because it’d be unprotected in that year). In that case, the Heat would be restricted from trading this pick, as per the Stepien Rule.
2017 N.B.A. Draft
The Heat can trade this pick, but only on condition that the Cleveland pick obligation is fulfilled in 2015; that seems likely. But would the Heat want to trade picks so far into the future, with the future so uncertain?
2018 N.B.A. Draft
The Heat can trade this pick, but only on condition that the Cleveland pick obligation is fulfilled by 2016; that seems likely. But, again, would the Heat want to trade picks so far into the future, with the future so uncertain?
2019 N.B.A. Draft
This is the first year in which the Heat can trade away a first round pick without any conditions of any kind.
2020 N.B.A. Draft
Due to the “Seven Year Rule,” this is the last year in which the Heat can trade away a first round pick.
Beyond just its own first round picks, the Heat can trade away the Philly pick at any time without restriction. The Heat could also trade away any one of its second round picks through 2020 (2), other than their 2017 pick (top-40 protected, unprotected in 2018), which they’ve already traded to Atlanta as part of the James Ennis trade on June 27, 2013. These picks, however, don’t hold much value.
If the Heat can’t find a trade partner for Joel, they can still create the needed roster spot by waiving any player on the roster, despite the fact that they’re all now fully guaranteed.
1. The Cavs, in addition to the two first round picks and the swap right in 2012, also acquired second round picks in 2011 and 2012 from the Heat in the James trade. Both have since been utilized.
2. The Heat also acquired two second round picks in its trade of Michael Beasley to the Timberwolves on July 12, 2010 – Minnesota’s unprotected picks in 2011 and 2014. However, both were utilized in the Norris Cole trade on June 23, 2011.