Miami Heat Pursue LaMarcus Aldridge
Updated (11/11/15): When Pat Riley requested a meeting with LaMarcus Aldridge last summer, we were all trying to figure out his intentions. It did not feel believable that Riley would trade Chris Bosh for Aldridge in a player-for-player swap, but nothing else even seemed remotely plausible. So what was Riley thinking?
According to various media reports, Riley’s intention was to try to convince Aldridge to accept a one-year deal with the Heat at the $3.4 million taxpayer mid-level exception (a whopping $16.3 million discount from his maximum salary for which he ultimately signed), after which the Heat would utilize its bountiful cap space in the summer of 2016 to provide a long-term contract that would make him whole (which, given the projected rise in the salary cap and his would-be status as a 10-year NBA veteran, both of which would significantly increase his maximum potential salary in the summer of 2016, was imminently possible).
The reports are intriguing in that, if true, Riley’s approach could have constituted (at least in my humble opinion) a rather severe violation of salary cap rules, but even more-so intriguing because the Heat at the time already had what appeared to be its center of the future in Hassan Whiteside. Was Riley contemplating scenarios that didn’t include Whiteside?
Had Aldridge acquiesced, the Heat would not have had enough cap space in the summer of 2016 to re-sign both Aldridge and Whiteside at the max, if that is what each ultimately would have demanded. And with a promise made to Aldridge (presumably one Riley would keep), it would appear Whiteside’s long-term future in Miami would have been placed at severe risk.
Fortunately, things worked out for the best. Aldridge chose to sign a long-term contract with the Spurs. The Heat now has more than enough cap space to re-sign Whiteside as an unrestricted free agent next summer, solidifying what could become the best frontcourt in all of basketball.
No sooner than did the Miami Heat’s major free agency dealings seemingly come to a conclusion did the organization decide to take another swing for the fences. Heat president Pat Riley is flying to Los Angeles to have dinner with Portland Trail Blazers power forward LaMarcus Aldridge.
Wait. What? How is that even possible?
The heavily lifting portion of the Heat’s summer was seemingly predicated on the contract decisions of three men: Luol Deng, Goran Dragic and Dwyane Wade. Wade seemingly completed the picture when he agreed to a one-year, $20 million contract. Deng had previously exercised his $10.2 million player option, while Dragic accepted a five-year, $86 million deal.
These actions leave the Heat with an estimated team salary of $94.3 million for the 2015-16 season, well in excess of the $67.1 million projected salary cap level and $12.8 million above the $81.6 million luxury tax threshold.
Unlike other suitors, such as the San Antonio Spurs, Los Angeles Lakers and Phoenix Suns and, the Heat do not have the necessary salary cap space to sign Aldridge outright. Therefore, should the it wish to acquire Aldridge, the Heat would need to execute a sign-and-trade transaction with the Trail Blazers. And with it will come some severe restrictions.
The latest CBA contains a new feature: the implementation of an “apron” that is slotted $4 million above the tax line. That would put the apron at $85.6 million. Teams are prohibited from exceeding the apron, even by a single penny, if they engage in certain transactions. On that list: using the $5.5 million midlevel exception, using the $2.1 million bi-annual exception, and acquiring another team’s free agent by means of a sign-and-trade.
The apron is a brick wall on spending, one that cannot be crossed for any reason. A team cannot exceed it even for a moment, and even if it were to subsequently drop back down below it. Merely approach it, and it becomes harder to make trades that bring in more salary than they send out, or even sign minimum-salary players when injuries strike. It is a menace constantly floating in the distance.
The Heat has a team salary which is currently well beyond the apron, which means that if it were to pursue a sign-and-trade, it would need to shed salary either prior to or as part of it. But before the Heat pursues any salary-dumping options, it first needs to know how much it will be required to purge. That, in turn, would depend upon the first year salary Aldridge would command in the contract the Heat would acquire.
As a nine-year NBA veteran, Aldridge would be eligible to receive a maximum starting salary of $19 million. The figure will be finalized when the salary cap is set on July 8th.
Sign-and-trade contracts must be for at least three seasons (not including any option year) and no longer than four seasons. With such a long commitment, it seems unlikely Aldridge would take any discount to that amount, particularly when considering two things: (i) maximum salaries are projected to spike 33 percent next season and (ii) maximum salaries increase 17 percent for 10-year veterans. Both are increases of which Aldridge would not be able to take advantage. Which means that by locking himself into a three-year deal this summer, his first year salary will be 36 percent lower than that which a player of his tenure could secure next summer.
It seems likely, then, that Aldridge will demand the full $19 million.
So, how does a team which is currently $13 million above the luxury tax threshold take on a player who will command an additional $19 million, and wind up below the apron?
Well… if you’re $13 million over the tax threshold and you take on another $19 million, you would be left at $32 million over the tax threshold. To end up at least $4 million below it, you would need to shed $28 million.
To shed $28 million, while still fielding a 13 – 15 player roster, is not easy.
The most feasible permutations in a Heat trade for Aldridge would include Chris Bosh.
But why would the Heat want to swap Bosh for Aldridge? Why does that make sense?
One can see the Blazer perspective: If they are going to lose Aldridge to free agency anyway, why not take back Bosh?
For the Heat, searching for a reason is a bit more challenging. The two play a similar style of offensive game, while Bosh is perhaps the better defensive player.
Perhaps there are strategic motivations at play: In order to facilitate the Blazers’ ability to acquire an All Star in Bosh in exchange for a player who might otherwise be lost for nothing, perhaps the Heat would require some sort of compensation. Perhaps future draft considerations. The Heat don’t have many, with still three future first round picks owed. The Blazers would be in position to send a conditional first round pick in 2018, or unconditional such picks starting in 2019.
Or perhaps there are financial motivations at play: How about up to $60 million of savings? How about increased cap room for the summer of 2016 and beyond?
What could the framework of a trade(s) look like?
For the sign-and-trade to be possible, the Heat would need to shed $28 million in salary commitments for the 2015-16 season either before or as part of the transaction.
The Heat received a bit of good news in that regard earlier this week. Per a report from CBS Sports, the salary cap for 2015-16 may increase as much as $2 million more than previously projected, from $67.1 million to maybe as much as $69.1 million. An up to $2 million rise in the salary cap would cause a $2.2 million rise in the tax threshold, pushing it from $81.6 million to maybe as high as $83.8 million. That, in turn, would leave the Heat with as little as $26 million in salary to shed.
The Heat needs to shed $26 to $28 million to stay below the apron. Bosh makes $22.2 million. That leaves $4 to $7 million left over, depending upon where the tax levels out. So maybe it’s Bosh and Mario Chalmers ($4.3 million)? or Chris Andersen ($5.0 million)? or Josh McRoberts ($5.3 million)?
According to trade rules, in order to take on Aldridge’s $19 million, the Heat would need to send the Blazers back between $15 million and $24 million in salaries as part of the sign-and-trade transaction. For the Blazers to take on more than $24 million would require that they have the requisite cap space. Portland currently has as much as $36 million of cap space, more than any other team in the league.
Thus, the Heat could potentially send out all $26 to $28 million in the package to Portland, or it could break up the salary dump into a series of transactions wherein Bosh would be sent to the Blazers as part of the sign-and-trade and the other player(s) in a side deal elsewhere.
Let’s assume, for the sake of argument, that the Heat would trade away Bosh and McRoberts. That’s the necessary $28 million.
The Heat’s team salary would fall to $85 million, about $100K below the apron.
Of course, there are many other combinations that would get the Heat to the same place. The point is, to complete a sign-and-trade transaction, whatever the combination, the Heat would need to drop its team salary to around this level.
So, let’s take a look at the cost savings and salary cap ramifications of such a trade.
Ramifications for 2015-16
The Heat will have had a team salary of $94 million before the trade which, depending upon where the tax threshold is set, would have caused a tax payment of $28 million to $36 million. That’s a total payroll obligation of between $122 million and $130 million. This trade(s) would lower team salary to $85 million, which in turn would lower the tax payment to $4 – $10 million and total payroll obligations to just $89 – $95 million. That’s a total savings, depending upon where the tax threshold is set, of between $31 and $35 million!
And the savings don’t stop there.
Why? Because Bosh makes more money than can Aldridge. Which affects future seasons too.
Aldridge’s first year salary will depend upon the finalized salary cap figure. It figures to be between $18.8 million (based on a $67.1 million cap) and $19.4 million (based on a $69.1 million cap). That leads to a total contract value between $80 and $83 million over four years.
Bosh will make $98 million over his final four years.
That’s a savings of $15 – $18 million.
Ramifications for 2016-17
About $4 million of that savings would be attributed to the 2016-17 season. Including McRoberts in the trade would save another $6 million. That’s up to $10 million of total savings.
The salary cap ramifications would be equally powerful. A $4 million savings for swapping Bosh with Aldridge would increase the Heat’s cap space by that very same $4 million. Including McRoberts in the trade, after subtracting the roster charge caused by losing one player, would increase the Heat’s cap space by another $5 million. That’s up to $9 million of added cap space. Add it to the $37 million the Heat already projected to have gets you to as much as $47 million!
The Heat could have a starting rotation of: Dragic (PG), Justise Winslow (SF), LaMarcus Aldridge (PF) and up to $47 million left over for Wade (SG), Hassan Whiteside (C) and another player. Is it all that difficult to theorize permutations that free up the necessary $25 million for Kevin Durant?
Ramifications for 2017-18
Another $4 – 5 million of that savings would be attributed to the 2017-18 season. Including McRoberts in the trade would save another $6 million. That’s $10 – 11 million of total savings, and $10 million in added cap space.
Ramifications for 2018-19
The last $5 million of that would be attributed to the 2018-19 season. With the McRoberts contract having expired, that’s $5 million of savings and added cap space.
Now add it all up!
Total savings: $31 to $35 million for 2015-16 + $10 million for 2016-17 + $11 million for 2017-18 + $5 million for 2018-19: Between $56 million and $62 million!
(Part of that savings is the result of including the multi-year contract of McRoberts in the trade, rather than the expiring contracts of others. McRoberts has $12 million of future salary commitments beyond next season. Removing him from the deal and replacing him with expiring contracts reduces the total savings from $56 – $62 million to $44 – $50 million. Therefore, no matter where the finalized salary cap figure is set, and no matter how the finalized trade is structured, acquiring Aldridge in exchange for Bosh would save the Heat at the very least $44 million).
So… if the Heat can get: (i) up to $60 million of savings, (ii) up to $4 -$10 million per year of extra cap space for the 2016-17 through 2018-19 seasons and (iii) possible draft considerations, should not the Heat at least consider the possibility of an Aldridge for Bosh swap?
There are permutations in a sign-and-trade for Aldridge, however, that would not include Bosh.
To avoid including Bosh in the discussions would require, in a best case scenario for the tax threshold of $83.8 million, that the Heat jettison, at the very least, Deng, McRoberts, Andersen, Chalmers and one of Udonis Haslem, Winslow or Zoran Dragic. Likely more.
In a worse case scenario for the tax threshold of $81.6 million, the Heat could be required to jettison every one of Deng, McRoberts, Andersen, Chalmers, Haslem and one of Winslow, Z. Dragic or Shabazz Napier. Possibly more.
Whether the Heat could trade away at least five, but possibly six or even seven players of that caliber, all while taking nothing back but Aldridge, is debatable. The Heat could include Winslow, Whiteside, as much as $3.4 million in cash, and/or second round draft picks in 2018, 2020 or 2021 to serve as an inducement for the Blazers and other possible trade partners.
Despite all the potential permutations that could allow for Aldridge to be traded to the Heat, the possibility does not seem very likely. Beyond just the financial limitations, Aldridge has offers from seemingly more attractive destinations elsewhere.
The Heat is not currently considered a favorite for the services of LaMarcus Aldridge. But anything is possible.
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