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Miami Heat at the NBA Trade Deadline

The Feb. 20 N.B.A. trade deadline is now officially less than a month away.

The Miami Heat started their dealings early this season, shipping Joel Anthony to the Boston Celtics along with a million dollars and two draft picks (one second-rounder and another that was originally Philadelphia’s and will likely become a pair of second-rounders). In return, the Heat got a player from Golden State, but this deal wasn’t about Toney Douglas as much as it was about the benjamins.

Anthony, who lost his role to Chris Andersen last season and had been a reclusive presence on the court ever since, ultimately became a casualty of the Heat’s cash crunch and managing partner Micky Arison’s desire to creep closer to the luxury-tax line. He didn’t get there, not with this deal, but it did save him around $20 million, and it did eliminate one of the obstacles to reshaping the roster after this season, when LeBron James, Dwyane Wade and Chris Bosh can all opt out of their existing contracts.

Now, it’s conceivable that only Norris Cole ($2.0 million) and Udonis Haslem ($4.6 million option) will be under contract on July 1, as Arison, Pat Riley and the Heat try to retain James, Wade and Bosh, and perhaps Mario Chalmers, Ray Allen, Michael Beasley and even Greg Oden.

That’s the long-term vision.

The short-term? The trade did nothing to advance the cause. The Heat, championship material as they are currently constructed, nonetheless have various needs that have yet to be addressed. 

With Dwyane Wade missing numerous games as he manages knee issues, the Heat started trade talks looking for backcourt help long before the Anthony trade ever materialized. The Heat have adapted to Wade’s absences by extending Allen beyond the limits of what a 38-year-old should have to bear, and he’s wilted under the demands it has imposed upon him, often pressing the issue in an attempt to create offense rather than remaining disciplined, spacing the floor, and doing what he does best – drain three-pointers.

Chris Bosh, defensively sound as he is with his long arms and stellar foot speed, is simply not thick enough to hang with monsters like Roy Hibbert at the center position, and gets tossed around like a rag doll by the league’s more imposing big men, who consistently transform themselves from average to All-Star with Bosh in a role that he hates to play. Oden fits the bill, as an imposing big who can slide Bosh over to his more natural power forward position, but he is neither a reliable or polished presence in the middle nor a big-minute alternative even in the best of circumstances.

The problem for the Heat is that they have limited trade assets with which to address these needs.

Beyond player assets, of which they have virtually none that both they’d be willing to part with and a trade partner would be eager to take on, the Heat could offer cash considerations.

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. Given the restrictions imposed by the Ted Stepien rule, which stipulates that a team cannot trade away its first round draft picks in consecutive seasons, the next first round draft pick available for trade is in the year 2017. Trading away draft picks that extend beyond the Big Three era represents a special kind of stupid.

That doesn’t seem to leave a whole lot with which to work.

The Heat would love to get their hands on a guard such as Danny Green of the San Antonio Spurs or Terrence Ross of the Toronto Raptors, or a center such as Nikola Vucevic of the Orlando Magic, but such trades are not even remotely realistic.

The more likely approach as the trade deadline nears is addition by subtraction – trades designed to free up roster spots with which to sign free agents. Toney Douglas or Roger Mason Jr., or both, figure to be the most likely candidates for such treatment.

***

Toney Douglas

Douglas, the Heat’s new addition, is playing under a $1.6 million expiring contract. The Heat will only be responsible for the $856,471 in salary not already paid to him by the Warriors, but his full salary will be subjected to the tax for the Heat, at a rate of $1.75-per-dollar, for a total of exactly $2.8 million. Douglas, not long for this team anyway, will nonetheless cost the Heat about $3.7 million.

There’s not a lot of appetite around the league for a backup point guard who doesn’t do point guard things very well – in fact, he failed, and quite spectacularly, this season as the ball-dominant backup point guard the Warriors asked him to be.

But everybody on earth, short of the Capital One baby, wants more cash.

As an example of how a trade might be executed, the Heat could offer to pay the remainder of Douglas’ salary for anybody willing to take him plus an additional million dollars of profit for the trouble.

There are plenty of small market teams going nowhere quickly that might have an interest in taking on Douglas’ expiring contract under such an arrangement. The Atlanta Hawks, Milwaukee Bucks, Orlando Magic, Utah Jazz, Philadelphia 76ers, and Phoenix Suns all have the necessary cap space to do so. All but two of them – the first and the last – are playing the tanking game anyway.

There are several others with trade exceptions large enough to execute such a deal without themselves exceeding the tax threshold – the Denver Nuggets, Golden State Warriors, Oklahoma City Thunder, Sacramento Kings and Toronto Raptors.

Only one team has to oblige.

Would you take on a worthless but tiny expiring contract, which you could terminate seconds later at no cost if you chose, if you were given $1 million as an enticement to do so?

Total Heat Savings: $1,800,000. 

***

Roger Mason Jr.

Roger Mason Jr. has a straightforward contract that has an odd twist to it.

He is a 10-year N.B.A. veteran. He is playing under a one-year contract. He is earning $1,399,507, the minimum salary for a player with his tenure.

The Heat, however, is only responsible for $884,293 of that amount, equal to the minimum salary for a two-year N.B.A. veteran. The league will reimburse the Heat for the rest at the end of the season. Therefore, he really only costs the Heat the smaller amount, and only the smaller amount is included in team salary for cap and tax purposes. They do this so teams won’t shy away from signing older veterans simply because they are more expensive than younger veterans.

As for the mechanics of how the reimbursement works, the Heat is responsible for Mason Jr.’s full prorated salary of $8,232.39 per day (equal to his $1,399,507 salary divided by the 170 days in the regular season), until the total reaches $884,293. At that point, the league reimburses the Heat for the rest. With the regular season having started on Oct. 29, he will earn that much by Feb. 13, 2014. His services from that point forth essentially become free of charge.

However, if the contract is traded during the season, the reimbursement gets allocated to the respective teams based on the number of days accrued with each team. On the day of the trade deadline, Feb. 20, there will be 55 days remaining in the regular season. At that point, Mason Jr. will have $452,782 in remaining salary obligations, but $166,687 of that will get reimbursed. A trade partner will therefore owe Mason Jr. a net total of just $286,095.

That’s an imminently tradable contract. Toss in the cash to cover the rest of his contract, plus a 2014 second round draft pick or a few hundred thousand dollars of profit, and you have yourself a deal. The Heat proved that last year in its trade of Dexter Pittman.

And since every N.B.A. team can legally acquire a minimum salary contract without sending back any salary in return, every team becomes a potential trade partner.

Counter-intuitive as it may seem, pending a successful trade, which is never a guarantee, the Heat can actually save itself money by having kept Mason Jr. through the guarantee deadline, and instead looking to trade him.

Would you take on a worthless expiring minimum salary contract, which you could terminate seconds later at no cost if you chose, if you were given a low 2014 second round draft pick to do so? Or maybe $500,000 of profit? 

Total Heat Savings: $1,547,513, less any cash considerations dealt as profit.

***

The Heat could look to execute one or both of these trades in order to free up the necessary roster spots to pursue either a current free agent or one made available in the weeks ahead. In order to execute both of these trades, however, the Heat would need to be mindful of their cash position.

There was an intricate rule change in the current collective bargaining agreement that limits the amount of cash that can be distributed across all trades over the course of an N.B.A. season. For this season, that total is $3.2 million.

The Heat have already spent $1 million of that amount in the Joel Anthony trade. That leaves only $2.2 million remaining.

They’d be spending another $1 million of profit to any team willing to take on Douglas’ contract, plus whatever its costs to cover the remainder of his salary. His remaining salary obligations, of course, decrease every day of the season (to reflect how much he has accrued for services already rendered). At the trade deadline, he would have $517,647 in salary obligations remaining. That’d be a total cost of $1,517,647 for the Douglas trade.

That leaves up to $682,353 in cash available for a Mason Jr. trade.

At the trade deadline, Mason Jr. will have post-reimbursement remaining salary obligations of $286,095.

Therefore, if the Heat were to execute both trades exactly as described herein, they’d have as much as $396,258 in profit to offer a potential trade partner for Mason Jr., in conjunction with any second-round draft pick considerations. (1)

Of course, these types of trades are not required to be executed at the trade deadline. They can be executed at any time before then as well. To do so, however, would increase the remaining salary obligations of the player traded away, and thus potentially increase the cash considerations the Heat would be obligated to deal in the trade and, in turn, make it more difficult for the Heat to execute the other, if they have in mind to pursue both trades. 

That might just be a worthwhile gamble for the Heat if they plan to pursue Andrew Bynum.

Bynum has been a free agent since January 10. Sources have maintained that the big man with baggage has been holding out for a larger contract, but the slow market for his services could compel him to accept the minimum, the only contract the Heat are likely to offer.

There are mixed views inside the Heat organization about whether to pursue Bynum. Miami has considered it, and it hasn’t been ruled out. But Heat officials are concerned about how it would affect Oden, who has done everything the Heat has asked, because Miami wants to give him minutes.

The Heat may instead look to pick off any players waived by their current teams in the weeks ahead. In order for such a player to be eligible for another team’s playoff roster, he must be placed on waivers by 11:59 p.m. on March 1. The player does not have to be subsequently signed by March 1. He can be signed as late as for the final game of the regular season to be eligible for the playoffs.

Notes:
(1) I speculate that it would cost $500,000 in profit to avoid using any draft picks as additional future considerations, for which the Heat would fall $103,742 short if they were to execute both transactions exactly as described herein on the exact date of the N.B.A. trade deadline. 

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