Miami Heat Are Talking Trade, But With Limited Assets to Offer
Update (12/16): What many fans aren’t appreciating is the critical nature of moving the contract of Joel Anthony. Without removing that contract, given the introduction of the repeater tax, it will not be financially reasonable to expect Heat owner Micky Arison to keep and improve upon the current roster next season. And, for those that are assuming so, he cannot rely upon any of the Big Three opting out of contracts over which he has no control. The Heat therefore needs to stay as flexible in maintaining is assets as possible. While using a draft pick to attract Jordan Crawford, who could be a nice fit, might seem like a nice addition, it will not happen unless the Heat can part with Anthony in the trade, whom the Celtics will absolutely not take. It is realistically not worth contemplating trades that involve the Heat surrendering non-player assets in trades that do not unload Joel Anthony.
With every game Dwyane Wade misses due to his balky knees, the Miami Heat struggle to win, in part because they don’t have much depth at the shooting guard position. With that in mind, Miami is reportedly talking with other teams about a possible trade.
The more significant aspect to the Heat’s struggles is the lack of a defensive anchor and a rebounder at the center position. The Houston Rockets are telling other teams that they intend to trade disgruntled center Omer Asik by December 19. Asik would look very nice opposite Chris Bosh on the Heat front line if the Heat is able to put forth a compelling trade package and, at the same time, stomach the massive payroll and tax implications.
The Heat’s most likely chips in any trade are forward Udonis Haslem and center Joel Anthony, who both have fallen out of the rotation but also carry the drawback of time on their contracts beyond this season. Anthony, making $3.8 million this season and owning a player option for the same amount in 2014-15, has zero trade appeal to other teams. Haslem, making $4.3 million this season with a player option for $4.6 million in 2014-15, doesn’t figure to have a whole lot more appeal (his contract also contains a 15% trade bonus which, by league rule, he cannot waive, but would nonetheless only apply to this season).
The Heat could presumably also look to trade anyone else, other than the Big Three and Ray Allen, if the right deal came along.
Beyond player assets, the Heat could also offer up to $3.2 million in cash, the maximum annual cash limit for the 2013-14 season.
Finally, they can 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 fact general manager of the Cleveland Cavaliers. In 1980, Stepien parlayed his minority stake in the Cavs into full control of the franchise. After purchasing the club, 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 controversial and, to outsiders, ludicrously one-sided player trades.
His first big move happened two months before his purchase of the team went through: He flipped backup guard Butch Lee and a 1982 first-round pick 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, Los Angeles picked future Hall-of-Famer James Worthy first overall with Cleveland’s pick.
It got worse from there.
Later in 1980, 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).
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.
That’s when the N.B.A. made history three different times.
First, to discourage such carnivorous thinking, then N.B.A. Commissioner Larry O’Brien stepped in and barred Stepien from making any further trades unless they were approved by the league.
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 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 instead wants to go the much less expensive route of signing a free agent shooting guard, they also have the option of opening a roster spot by releasing Roger Mason Jr., whose contract does not become guaranteed until Jan. 10 and is thus effectively being paid out by the day (at a rate of $8,232, excluding the tax). Among those currently unsigned and available to slip into a vacant roster spot are Stephen Jackson, Shannon Brown, DeShawn Stevenson, Richard Hamilton, Chris Douglas-Roberts, Daniel Gibson and Keyon Dooling. Heat 2013 second round draft pick James Ennis remains an option as well.
If the Heat wants to go the less expensive route of signing a defensive anchor and a rebounder at the center position, the best option could be Emeka Okafor later on in the season. Okafor, currently rehabilitating from a herniated disc in his cervical spine, would first need to be bought out. If that happens, it will surely happen between the February 20 trade deadline and the March 1 deadline for which waived players would become eligible for the playoffs. At that point, he’d very likely seek a rest-of-season minimum salary contract.
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.