Pat Riley Addresses the Miami Heat Summer

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The following post attempts to parse through the eloquent words of Pat Riley, delivered at his press conference on Saturday, to arrive at their true meaning.

Things are not always necessarily what they seem.

During a press conference on Saturday to discuss the state of his Miami Heat team, Pat Riley opened up about the sadness he feels for having lost Dwyane Wade, the team’s most important ever player.

“What happened with Dwyane floored me. And I’m going to miss the fact of what I might have had planned for him and his future and how I saw the end and my thought process in how I could see his end here with the Heat… It’s not going to be the same without him… I have been here when Zo left, Shaq left, when Brian Grant, Eddie Jones. But Dwyane is unique.”

After 13 seasons, Wade is gone. Officially signed by the Chicago Bulls.

Wade will get paid $47.0 million over the next two years, with a player option on the second season. That’s more than the Heat’s two-year, $40.0 million offer. But this wasn’t about the money.

Wade’s decision was predicated on a deteriorating relationship that resulted from a fundamental difference in philosophies. A difference that was two years in the making. 

Last summer, Wade petitioned the organization for a final three-year, $60 million contract to close out his career. It was a lofty first proposal, and a stark contrast from his initial indications that he would opt into his $16.1 million player option and set himself up to become a free agent in the summer of 2016, a heavily-preferred scenario for a Heat team that needed the flexibility for a potential pursuit of superstar Kevin Durant.

For the first time in a long time, what was best for Wade was no longer what was best for the Heat, and that’s where things got messy. Faced with an organization hesitant to dole out a significant long-term contract that would destroy its flexibility for the summers of 2016 and 2017, the star player became so emphatic in his desire as to bring his fight out into the open, indicating a willingness to test the open market and leave the Heat, if necessary, in order to get it. Riley and Wade were divided.

It was owner Micky Arison who stepped in to broker peace, and a new deal.

Arison countered at one-year, $20 million. Wade accepted. Reluctantly.

“It’s no secret that my goal was to sign a longer-term deal this summer,” Wade said at the time. “That’s what I was focused on.”

The deal was positioned as something of a compromise. For Wade, it provided an increased single-season payout and an opportunity to return to free agency the following summer. For the Heat, it maintained flexibility for the summer of 2016.

“The contract is a win-win for both Dwyane and the Heat,” said Wade’s agent Henry Thomas. “Not only does Dwyane get to extend his Hall-of-Fame-worthy career with the only franchise for whom he has ever played, but he will have the flexibility next summer to sign an additional deal. And the Heat gets to keep their franchise cornerstone while having the ability to build a championship-contending roster.”

What Thomas did not say, however, was something of which both he and his client were undoubtedly aware: The ability for the Heat to build a championship-contending roster the following summer would necessitate a financial sacrifice from Wade.

So, naturally, frustration ensued again this summer when Wade was made to sit tight as Riley and the Heat organization made its first priority to retain Hassan Whiteside, and second priority to pursue the never realistic pipe dream that was Durant. Wade, a future Hall-of-Famer, is no third option – particularly when successful pursuits of either or both of the first two severely limits that which is left over for the organization to compensate himself.

Whiteside in hand and Durant pursuit having failed, the Heat offered Wade every ounce of salary cap space it had left to give: the full $20 million.

Total contract value built onto that starting salary: two-years, $41 million.

More than Riley would have liked to offer. More than enough to destroy any prior plans for the following summer he may have had.

Imminently fair. Perhaps even acceptable in an emotion-free environment. But that’s not the environment in which it was given.

It wasn’t even given by Riley. Riley wasn’t even in New York when the Heat last met with Wade, only a few hours before he announced that he was picking Chicago. That meeting was handled by Micky and Nick Arison.

For that, Riley expressed regret.

“I have great regret I didn’t put myself in the middle of it and immerse myself in the middle of it and get in a canoe and paddle to the Mediterranean if I had to, be in New York when he arrived on the 6th and greet him at the airport. I didn’t do that… I wasn’t there in the middle of that negotiation and that’s my job.”

But let’s not confuse the regret Riley expressed with the supposition that, had he the opportunity for a re-do, he necessarily would have increased the team’s offer to Wade, if that proved to be what it took to retain him. Despite positioning himself as the fall guy, Riley gave no indication of a willingness to increase the two-year, $40 million offer that was made.

Wade’s counterproposal? Increase the offer to $50 million, or add a third $20 million season.

The former alternative effectively meant jettisoning Josh McRoberts, which proved impossible.

The latter alternative effectively meant such severe financial unrest for the team as a whole in that third season – a season during which Wade would be 37-years-old – as to possibly force the Heat to part not only with youngster Tyler Johnson, which was implied, but possibly even Josh Richardson as well, let alone build upon them, and a severely crippled means with which to improve the team in the interim. Golden parachutes are wonderful in theory, but costly in practice.

Riley had already stretched in offering Wade a second year. He simply couldn’t acquiesce. And, frankly, he didn’t want to. Because both approaches put the Heat’s on-court product at risk.

“What my thoughts were always to try to make the team better and to make sure that Dwyane, over the three, four, five years left in his career, was going to get his money. But not at the expense of paralyzing our ability to win.

“If you’re rolling over year to year and looking at the free agent class, having your best and most important player at a time in his career. He’s 35 years old and having him on a two-year deal, 1-and-1. If he does opt out, the next year, if there are people in the market, that could come in under, you could come in under, you have that flexibility, as opposed to being in a three-year deal where you don’t.”

That notion has created a firestorm of animosity across South Florida over the past several weeks.

Many feel that the organization had an obligation to offer Wade a contract that reflected, and reimbursed him for, the financial sacrifices he has made for it over the course of his career. Wade, who was never the Heat’s highest-paid player, made $25 million in sacrifices for the benefit of the organization through the years.

Riley responded to that notion in a subtle way. He responded by telling a seemingly random but strategically purposeful story about the Heat’s acquisitions of Wade, LeBron James and Chris Bosh in summer of 2010.

“I can tell you a funny story about — maybe I shouldn’t — but I can tell you a funny story about 2010.

“When we took the three of them in, we had $49.5 million [in cap room]. So we had 16.5 for each guy, which was the max deal. So, you got it. You got it all. We got it all. We got it for you.

“They said, ‘Well, who do we have left?’ I said ‘We got Mario [Chalmers] as the starting point guard and we got Joel [Anthony] as your center. That’s it, we’ve got five guys.

“[They said] ‘Well, we would like to get Mike Miller. How can we get Mike Miller?’ I said, ‘I can’t get you Mike Miller. We can’t get him. I don’t have the money…’ So we traded Michael Beasley to get the money, but they had to go down to $15 million. That was their choice.

“Then they said, oh, we want UD. Ok, well, I can’t get UD. Even though I wanted to get UD.”

Riley was drawing a critical distinction: Wade did not sacrifice for the benefit of the organization. He (and James and Bosh) sacrificed to bring in two friends. Those sacrifices were his choice, not an action done at the behest of the Heat organization.

Had he accepted the full, maximum-contract deal Riley offered in July 2010, Wade could have earned a massive $125.5 million over the past six seasons. He could have been the highest-paid player on his team for each of those six seasons. He could have earned the maximum possible payout under NBA rules in each and every season of his 13-year career. The issue of his sacrifices to the organization over the years would not exist.

That things didn’t play out this way was entirely Wade’s choice. The Heat organization can’t be made to be responsible to reimburse a sacrifice Wade made on his own, one which was certainly not made at the request of the organization and perhaps even against its wishes.

Riley went on with his explanation.

The offer of a maximum contract to Wade, James and Bosh was predicated on the assumption that the latter two would be signed with the Heat’s cap room, eliminating the need to pursue the highly costly sign-and-trade structure that was ultimately employed.

“That whole concept about bringing [James and Bosh] into room [on maximum contracts was predicated] on five-year deals. The interesting part of July the 9th [2010 was that] they all agreed [that James and Bosh would] come in on five-year deals. Room only. So I didn’t have to give up any assets. And then, at the eleventh hour, they all wanted the sixth year. And you know what that cost me and Andy [Elisburg]. It cost us four [first-round draft] picks.

“I just said to them, ‘If you want the sixth year, because I know you’re going to opt out after the fourth anyhow, but if you want the sixth year, I don’t want any of you walking into my office and saying ‘Hey, can we get any young guys around here? Can we get some draft picks around here?’ Because they were gone.”

Had Wade, James and Bosh not dictated to Riley their requirement to add a sixth year to the contracts of the latter two, a year in which they were never going to utilize, the Heat would have had six more draft picks with which to maneuver over the years. Not only to utilize in the draft, but also in trade.

Riley went on to pursue several trades in the years that followed, most of which he couldn’t execute because he didn’t have those picks to offer as compensation.

Riley’s supposition ultimately proved correct. Wade, James and Bosh each opted out of their contracts after four years, relegating the sixth year guarantee that cost the team four first-round and two second-round draft picks meaningless.

Whether those picks would have transformed the Heat future, whether the Big Three era would still be alive and well – with as many as five consecutive titles and counting – will never be known. Those picks never materialized into anything meaningful, but not having them did restrict numerous trade opportunities in the years that followed.

On the other hand, of course, this is a story told from one man’s perspective, which may or may not be the perspective shared by Wade, James or Bosh. In addition, nothing prevented Riley from simply refusing to attach sixth years to the contracts of James and Bosh at a cost of future draft picks. The concept of blame, then, is an open-ended one.

When all of his explanations were said and done, the truth, behind his masterful eloquence of speech, may well be that Riley didn’t want Wade to return.

In his mind, it may well be that the Heat’s future is harmed in the short-run absent Wade, but it has far more potential to be transformed into a title contender far more quickly without him.

The Heat made two significant, long-term decisions this summer, upon which its future is predicated: It signed Whiteside to a four-year, $98.4 million contract which makes him the new face of franchise, and it matched Tyler Johnson’s four-year, $50.0 million offer sheet.

On Whiteside: “This summer there was an explosion, an absolute explosion, of dollars and the amount of money that came into the system because of the television contract, and the cap going from 70 to $94 million. That’s an added $24 million. I’ve never seen more teams with more maximum room than I’ve seen this year. So there were a lot of opportunities for players to really capitalize.

“I don’t look at that with Hassan. What I look at with Hassan is that we were very fortunate to get him. We did track him. He was on our radar. We ended getting him here. We saw enough in the last two years to say that this is a very unique talent, a very unique player. At the dollars he’s going to be getting over the four years, we felt it was worth the investment… He can absolutely dominate a game on the defensive end. Blocking shots, rebounding, lobs, dunks, all those things…

“We believe he’s an essential part of this team. Anchors our defense. Will improve offensively and gain more confidence. We agreed as an organization that he was a player we were willing to make that investment in. ..I don’t think he’s a neophyte. Neophytes don’t get 20 rebounds and get 20 points and block 12 shots. He is a little bit young and raw to a leadership role and a responsible every single night role. You’ve got to produce these numbers. That’s what our obligation is as a franchise, as coaches, to make sure he’s productive. But the money doesn’t have anything to do with it.”

Translation: Riley didn’t want to pay Whiteside the max. He simply had no choice. Faced with the proposition of paying the max or losing him outright, he chose the former.

On Johnson, he hinted at internal division.

The Nets (in accordance with NBA rules) structured Johnson’s four-year, $50 million offer sheet to make it more difficult for the Heat to match, which would produce cap hits of $19.2 million in each of the last two seasons. Johnson will receive $5.6 million the first year and $5.9 million the second year. The Nets attempted to make the contract as poisonous as possible, also attaching a 15 percent trade bonus which would take effect if the Heat were to subsequently try to trade the contract down the road.

Had Johnson chosen not to sign the offer sheet and instead sign with the Heat outright, the Heat could have leveraged a portion of its $19 million of remaining cap room to provide him the same $50 million payout, but in a more standardized way (say, $12.5 million per season).

That, in turn, would seemingly have benefited all parties. For the Heat, it would’ve meant smoother cap hits with no poisonous back end. For the Nets, it would’ve provided immediate clarity, and eliminated the need to tie up $12.5 million of cap space for three valuable days (i.e., the Nets, by rule, were required to maintain cap space equal to the average value of the offer sheet from the moment it was signed to the moment the Heat announced its decision on whether or not to match). For Johnson, it would’ve meant a more accelerated payout of equal money.

The Heat did approach Johnson prior to him signing the offer sheet. Though it’s unclear exactly when.

So why did he sign it?

“Tyler is a good kid…The kid is a great kid and has great moral values. And sometimes in this sport, somebody kept his word. And we matched it.”

A kind and respectful answer, but there’s far more to this story. And simple timing reveals a lot.

Simple timing shows just how tenuous Johnson’s future in Miami truly was.

The Nets agreed to its offer sheet with Johnson on July 3rd, and the world found out about it just minutes later.

The Heat made its two-year, $41 million offer to Wade, which started at $20 million, on July 4th. The amount of the offer necessitated that the Heat not match Johnson’s offer sheet. The Heat, in essence, were prepared to sacrifice Johnson in order to retain Wade.

Wade’s offer remained outstanding until he agreed to sign with the Bulls late at night on July 6th. Johnson formalized his own contract with the Nets on the morning of July 7th. Which, at best, left just a few hour window between the time the Heat were even in position to offer Johnson any sort of guarantee to match the Nets’ payout (which couldn’t happen until Wade in Miami was no longer a possibility) and the time he officially signed his own contract. And Johnson, who to that point in his career had only made a cumulative $1 million, was not about to put $50 million at risk for even a second.

It remains unclear as to whether the Heat met with Johnson within that few hour window. But even if it did, it seems readily apparent that the organization was still very strongly divided at that point in time as to whether Johnson was worthy of such a large payout.

How was the decision to match ultimately reached?

“Micky said, ‘You’re not poaching any of my guys.’ Micky made the decision. He loves Tyler. He’s a young piece. He’s part of our future. We will deal with years three and four. Years one and two, we got him as a bargain.”

Translation: It was Arison’s choice. It was not necessarily Riley’s choice.

In matching Johnson’s offer sheet, the Heat now gets a core piece for the future. But it also gets a piece who plays the same primary position, shooting guard, as another promising Heat youngster, Josh Richardson. And it gets him at the high cost of $19.2 million for each of the final two seasons.

The Heat now has $93.1 million in salaries doled out for the 2018-19 season, leaving less than $10 million in potential cap space below the projected $108 million salary cap for that season. And that’s before accounting for a potential new contract to Richardson, then a restricted free agent.

Which, in turn, does the very thing against which Riley traditionally rebels: Reduces the team’s future flexibility. If the plan is to improve the roster through free agency, it’s difficult to envision how it could be that summer (pending the treatment of Bosh).

Johnson’s contract does, however, provide one critical advantage: He will be paid just $5.9 million next season. And that, in turn, provides the team with maximum flexibility for the summer of 2017.

The salary cap for the 2017-18 season is currently projected to reach $102 million.

The Heat now has just eight players locked in for the 2017-18 season (including Winslow’s team option, which the Heat will surely exercise by the upcoming October 31st deadline; Richardson’s non-guaranteed salary, which the Heat will surely keep; and Josh McRoberts’ $6.0 million player option, which he can choose to exercise), at a total cost of $82.8 million. That leaves the Heat with up to $17 million of cap space.

The 2017 class is loaded.

The list of players who can be unrestricted free agents in 2017 includes: point guards Stephen Curry, Russell Westbrook, Chris Paul and Kyle Lowry; shooting guard J.J. Redick; small forwards Kevin Durant, LeBron James (if he signs another one-year deal this summer) and Gordon Hayward; and power forwards Blake Griffin, Serge Ibaka, Paul Millsap and Greg Monroe.

If Riley is looking to reach for an elite player, there will be no better opportunity than the summer of 2017.

“I’ve always been one who is reaching, always reaching, reaching, reaching to get [Wade] another guy. Especially after LJ left. And trying to find a way to get him another guy to help him not only win but to help him win in a way that he would be very proud when he moved on out and retired. [But] it wasn’t just getting another guy for [Wade]. It was to maximize our ability to win.”

The key targets in the bunch: Durant (if available), Westbrook or Hayward.

$17 million will not be nearly enough to attract either Westbrook or Hayward — with maximum salaries for both currently projected at $28.8 million – but it’s not that far away.

A trade of Dragic next summer – in whom at least a third of the NBA was interested this summer (according to reports, I believe by Ethan Skolnick of the Miami Herald) – would increase the Heat’s total cap room to $34 million. Trading both Dragic and McRoberts, who will then be on a reasonably-priced $6.0 million expiring contract, would increase the total to $39 million.

That’s more than enough, with plenty to spare.

With that opportunity brings hope for a better Heat of tomorrow.

It also, however, brings an undeniable risk: The Heat will have tons of flexibility to attract an elite-level free agent in the summer of 2017, but if it is unsuccessful in so doing, after having matched Johnson, it may not get another chance for at least two and possibly several more years thereafter.

In other words, the Heat is all in on next summer. It’s a high stakes gamble.

The concept makes Riley uncomfortable.

“There’s no guarantee whatever money you can create next summer in the free agent market is going to bring in somebody. Kevin Durant is a pretty good example of a man who had an opportunity to make a choice and was true to what his criteria were. His main criteria were if I go, I want to go to a team that can win immediately and he lived up to that.

“You will see more superstars that might be with franchises for years, four or five years, and they are banging their head against a wall, and they get an opportunity to go somewhere where they think they can win now, I think you will see that happen more often. As far as we’re concerned, I’m always looking for that opportunity. And that’s what we’ll do again next year. But there’s no guarantee.

“You sit down and talk to them and they will take a look at your roster and take a look at everything and talk to you about your future and draft picks and everything…. You better have all the space and the players or they’re [the star players] are not coming.”

In the end, there simply were no easy answers for Riley this summer. It sounded as though, if he had his wish, he would have preferred to reluctantly retain Whiteside, let Wade and Johnson go, and head into the summers of 2017 and 2018 with maximum flexibility. He didn’t quite get that wish. Yet he communicated his thoughts with the grace and eloquence of a master manipulator.

That talent is precisely which the Miami Heat franchise is never too far away from title contention.

1 Response

  1. gary says:

    Albert, great reading, love your work.

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