Heat Apply for Disabled Player Exception, Set Sights on Josh Smith

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The Miami Heat formally applied to the league office for a disabled player exception on Monday, shortly after Josh McRoberts had season-ending surgery to repair the torn lateral meniscus in his right knee, in a move they hope will help them land soon-to-be free agent Josh Smith.

The Detroit Pistons made an abrupt and stunning move to release Smith earlier in the day, despite $36.0 million in guaranteed money still to be paid on his contract. His contract has an additional $9.0 million still to be paid on his $13.5 million salary for this season, and calls for salaries of $13.5 million in each of the following two seasons as well.

Smith will now spend 48 hours on waivers, during which time any team with the necessary cap space or a qualifying exception large enough to absorb his $13.5 million salary cap hit can make a claim to pick up the remainder of his contract. The only such team is the Philadelphia 76ers, which is not about to do so.

At 5 p.m. on Wednesday, Smith will clear waivers and become an unrestricted free agent, free to sign with the team of his choosing. Players this good who are owed this much money virtually never hit the open market in this fashion.

A number of teams have expressed an interest in signing Smith once he clears waivers, including the Heat, Houston Rockets, Dallas Mavericks, Sacramento Kings, Los Angeles Clippers and Memphis Grizzlies. 

The Rockets, with a clear need at the power forward position and close friend Dwight Howard leading the recruiting pitch, are believed to be the frontrunners to land Smith over the Heat and Mavericks, whose recruiting effort is being spearheaded by Rajon Rondo, another one of Smith’s close friends.

Smith signed a four-year, $54 million deal with the Pistons in July 2013 to play small forward. He is not a small forward. Things went horribly wrong. He shot a career-low 42 percent from the field last year, and is shooting just 39 percent thus far this year. He is among the league’s least efficient shooters from outside the arc, but has shot from there way too often. He is among the league’s most efficient shooters from inside the arc, but hasn’t shot from there nearly enough. He’s a player of great skill who has come to align too deeply with his worst habit, at least in part because he spent too much of his time in Detroit playing out of position.

Smith has been inefficient with his long jump shots to the point where they have made him notorious. But he’s too talented and too rare in his talents – a 6-foot, 9-inch athlete with great court vision who knows how to maneuver around the basket – to ignore. The last time he made up his mind to forgo chucking three-pointers, in 2009-10, he shot over 50 percent from the field en route to the best season of his career.

The Heat is searching for players who can replace the injured Josh McRoberts and help improve a thin power rotation.

Smith is a real talent capable of catalytic play under the right circumstances. If his talents are properly harnessed, he could be an excellent post scorer, a gifted passer and a quality rebounder to complement Chris Bosh in the front court, and would make for a dominant defensive forward pairing with Luol Deng. This is a move that could vault the Heat upward in the race for Eastern Conference supremacy without marginalizing Smith’s abilities, and without compromising the team’s future salary cap flexibility.

If money were to be his motivating factor, the Heat figure to have a slight advantage.

The Rockets have their bi-annual exception, which can be used to sign Smith for up to $2.1 million. At present, all other current suitors, including the Heat, can offer only a pro-rated veteran’s minimum contract, worth just under $1 million.

A disabled player exception for McRoberts, however, would be valued at half his salary, or $2.65 million. The exception will be granted by the league if an NBA-designated physician determines that McRoberts is substantially more likely than not to be unable to play through June 15. If the application is granted, the exception would enable the Heat to acquire one player via free agent signing, trade or wavier claim, to replace him. The Heat hope to have it in its possession before Smith makes his free-agency decision.

While the Pistons will be on the hook for the entire $36.0 million remaining on Smith’s contract after he clears waivers, they will get some relief if and when he signs with another team. If another team signs a player who has cleared waivers, the player’s original team is allowed to reduce the amount of money it still owes the player by a commensurate amount. This is called the right of “set-off.” The amount the original team gets to set off is limited to one-half the difference between the player’s new salary and the minimum salary for a one-year veteran.

Adjusting for set-off, Smith would net as much as an additional $1.7 million with the Heat (assuming its disabled player exception is granted), $1.4 million with the Rockets, and less than $900K with the Clippers, Kings, Mavericks or Grizzlies (the exact figure would depend upon the day he is signed), in addition to the $13.5 million he is already guaranteed.

The Heat would also be in position to offer Smith something else few others could: a potential starting position at the power forward position opposite a perimeter-oriented center, which puts him inside and lets his strengths manifest without temptation on the edges.

If Smith does choose Miami, the Heat would need to waive a player to make room. The team is currently at the 15-player maximum.

The granting of a disabled player exception would not impact McRoberts’ status with the team. He would continue to count as one of the NBA-maximum 15 players on the roster. He would still be allowed to return to the active roster before season’s end if he is able to do so (and any replacement player would not be affected). He could still be traded. However, if he is traded or does return before the Heat has used the exception, the team would lose it.

The exception, if granted, would have to be used by March 10. That McRoberts had his meniscus repaired, and not removed, suggests the exception should be granted. The recovery time frame for mensical repairs typically stretches many months.

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