How Can Miami Heat Sign Hassan Whiteside AND Kevin Durant?

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This post was written lightening quickly at the request of readers. There is no lead-in, no explanation and no context. It just contains the raw numbers that readers were asking for.

The Miami Heat will start the summer with six players under contract for the 2016-17 season – Chris Bosh, Goran Dragic, Josh McRoberts, Justise Winslow, Briante Weber ($219K guaranteed) and Josh Richardson (non-guaranteed). Those six players will cost a combined $49.8 million.

At the $94.4 million salary cap announced yesterday by the NBA, the Heat would have — after subtracting that $49.8 million, the $1.2 million cost to retain the right to re-sign Tyler Johnson to a contract that exceeds the cap, and necessary roster charges — up to $42 million or so of cap space with which to spend on free agents.

On July 1, free agent agent Hassan Whiteside announced that he will re-sign with the Heat. The deal is tentatively scheduled to be for the max, with a starting salary of $22.2 million and a total payout of $98.4 million. He can make the signing official starting on July 7th. The signing will reduce the Heat’s cap space available to any one player to $18.9 million.

Earlier today, we also learned that the Brooklyn Nets will extent a four-year, $50 million offer sheet to Tyler Johnson. The contract will pay out $5.6 million in the first year, $5.9 million in the second year, then jump to $18.9 million in the third year and $19.6 million (subject to a player option) in the last. Once he signs the offer sheet, which he can do starting July 7th, the Heat will have three days to decide whether to match. Until it decides, Johnson will continue to count $1.2 million against the cap. Once (and if) the Heat matches, he will cost $5.6 million. If the Heat decides not to match, he will cost nothing. The Johnson decision therefore has ramifications for another free agent the Heat is currently pursuing: Kevin Durant.

But would it be possible for the Heat to sign Kevin Durant, now that it has secured Whiteside?

Durant coming to the Heat is an extreme long-shot. He would need to be pass up opportunities with such teams as the Golden State Warriors, San Antonio Spurs, and his hometown Oklahoma City Thunder, among others. But if that were possible, would it be mathematically possible as well?

Durant’s maximum salary would be $26.5 million. With Whiteside at $22.2 million, the two figures alone total to $48.7 million. That’s way above the Heat’s $42 million of projected cap room, and that’s before even dealing with Dwyane Wade.

So, how can the Heat acquire the necessary cap space for Durant?

There are three likely scenarios: 

SCENARIO #1:

  • Dwyane Wade would need to accept a $1.6 million minimum-salary contract this summer, in exchange for a potential overpay contract in the summer of 2017. That overpay contract could start as high as the $35.4 million maximum salary (based on a projected $107 million salary cap) and have a term of up to three years; that’s as much as $114.0 million.
  • Josh McRoberts would need to be traded.
  • Either (i) Justise Winslow would need to be traded or (ii) Durant and/or Whiteside would need to split a $2.1 million discount from their respective maximum starting salaries if the Heat matches the offer sheet to  Tyler Johnson, or $1.5 million if not.
  • Briante Weber would need to be waived and stretched (he could be saved if the Durant and/or Whiteside take a further $287K reduction)

SCENARIO #2:

  • Goran Dragic would need to be traded.
  • Dwyane Wade would need to accept either (i) a contract starting at $8.3 million and paying out a total of up to $26.7 million over the next three years if the Heat matches the offer sheet to Tyler Johnson or a contract starting at $8.9 million and paying out a total of up to $28.7 million if not, or (ii) the minimum-salary construct described in the first scenario above.
  • Note: If Dwyane Wade were to accept the minimum-salary approach, the Heat would have an additional $8.3 million or $8.9 million in cap room with which to spend on another free agent, respectively, which would equate to a total of $35.3 million or $38.0 million over four years, respectively, depending upon whether the Heat were to match the Johnson offer sheet.

SCENARIO #3:

  • Goran Dragic would need to be traded.
  • Josh McRoberts would need to be traded.
  • Dwyane Wade would need to accept either (i) a contract starting at $13.5 million and paying out a total of up to $43.6 million over the next three years if the Heat matches the offer sheet to Tyler Johnson or a contract starting at $14.1 million and paying out a total of up to $45.6 million if not, or (ii) the minimum-salary construct described in the first scenario above.
  • Note: If Dwyane Wade were to accept the minimum-salary approach, the Heat would have an additional $13.5 million or $14.1 million in cap room with which to spend on another free agent, respectively, which would equate to a total of $57.7 million or $60.4 million over four years, respectively, depending upon whether the Heat were to match the Johnson offer sheet.

Any of the above scenarios would produce enough cap room for the Heat to offer Durant a full maximum contract, which can pay out a total of $113.3 million over four years.

Durant, however, could significantly increase his earning power by instead choosing to sign a two-year deal that includes a $27.7 million player option after the first year. In this scenario, he could decline his option and hit free agency again in 2017.

In 2017, Durant would be eligible for a maximum salary of $35.4 million (at current 2017-18 salary cap projections of $107 million). A starting salary of $35.4 million in 2017 would translate to a payout of $151.0 million over four years, in addition to the $26.5 million he would be collecting next season. That’s a total payout of $177.5 million over five years.

If Durant were to pursue such an approach, the Heat would not only need to clear the cap space necessary to cover his $26.5 million salary for the 2016-17 season, but also the cap space to necessary to cover his $35.4 million salary for the 2017-18 season. (Without clearing cap space in the summer of 2017, the most the Heat could give him utilizing his Non-Bird rights to exceed the salary cap would be $31.8 million, which would translate to a four-year contract of $136.0 million and a total payout of $162.6 million over five years.)

In any of the three scenarios, the Heat would project to have (or be exceedingly close to having) enough cap room to give it to him, but only if it does not match the offer sheet given to Tyler Johnson. That, in turn, means Johnson’s contract is unlikely to be matched if the Heat were to sign Durant to a two-year contract that contains a player option after the first year (subject to the footnote below).

Notes:

These scenarios are raw numbers, provided without context or explanation, and without contemplating potential future luxury tax ramifications. 

Having Wade sign for the minimum with the promise of a huge deal next summer is not technically legal. Promising a future contract is technically illegal under cap rules, though nothing prevents a player from reading between the lines. Also, this strategy would mean Wade would need to take the risk that rules could change (that could prevent him from signing his huge follow-up contract) during a potential lockout after next season. 

In Scenarios 2 and 3, if Wade were to take the larger up-front payout ($8.9 million or $14.1 million, respectively), he could not opt out next season and negotiate for a raise next season if the Heat were to want to protect the necessary cap space to re-sign Durant to a maximum contract next summer. 

In Scenarios 2 and 3, if Wade were to take the minimum-salary approach, the Heat could re-direct the amount remaining ($8.9 million or $14.1 million, respectively) to, among other things, retain Tyler Johnson.

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