A View Into the Miami Heat’s Uncertain Future
The Miami Heat revealed itself for what it is this past season – a fun and exciting team which can out-effort anyone to victory on any given night, but not one built for sustained playoff success.
It’s a team with a ton of quality role players, but also one so severely lacking in playmaking that it increasingly turned to a former ex-employee re-acquired at the trade deadline to create any semblance of offense as its competition stiffened. Dwyane Wade is a future Hall-of-Famer but, at 36 years old, he’s not the future of the franchise. Beyond Wade, the Heat essentially employs a playmaking-by-committee approach. Goran Dragic takes the lead, but he gets tired. James Johnson and Justise Winslow try their best to pick up the slack. Even Kelly Olynyk contributes. It’s tough to criticize any one of them. They’re all good at it. But none is truly great, or reliable in the biggest of moments… The Heat have been somewhat unlucky in that regard. They had interest in drafting Donovan Mitchell, who has proven to be an excellent playmaker in his rookie season, with their No. 14 pick in last season’s draft, but the Utah Jazz traded up eleven spots to leapfrog Miami and snag him at pick No. 13. That was followed by the loss of (last year’s version of) Dion Waiters, whose emergence as a legitimate secondary playmaker with the ball in his hands, and the team’s best floor-spacing shooter without it, jump-started the Heat offense in the second half of last season.
It’s a team with a flawed roster construction. The Heat has SIX shooting guards on the roster (Wayne Ellington, Tyler Johnson, Rodney McGruder, Josh Richardson, Dwyane Wade and Dion Waiters), but not a single true point guard beyond Dragic. It also has just one small forward (Justise Winslow) who made huge strides this season but, depending upon how you view the evolution of his shooting stroke (and whether you feel the statistics belie the reality), may still not yet be starter-quality for a team that relies so heavily on spacing. It has two talented power forwards (James Johnson and Kelly Olynyk), but it pays starter-level money to both. And it has a temperamental starting center (Hassan Whiteside) with game-changing talent when engaged and utilized correctly – he’s a pick-and-roll guy (though he still hasn’t fully mastered the craft) who can excel setting hard screens in space and rolling to the basket for lobs, put-backs and garbage points; he’s not a back-to-the-basket guy – but only one teammate who has the skill-set to take advantage of it (Wade).
To cover it all up, the Heat leans heavily upon its versatility. Tyler Johnson and Josh Richardson are often asked to handle point guard duties on offense; but while Richardson can step around a closing defender and knock down a mid-range pull-up jumper, or even penetrate through the lane to finish with a sweeping lefty scoop layup, neither is particularly adept at collapsing defenses and creating offense for themselves or their teammates, and handling the ball in that capacity compromises their efficiency as shooters. Richardson, the team’s most versatile perimeter player, is also often tasked with shifting to small forward; but that has him shooting over longer and stronger players on offense and marginalizes his All-NBA-caliber production against like-sized players on defense. James Johnson and Kelly Olynyk often get their roles flipped; but that gets you a sub-optimal spacing threat in the starting lineup. And Whiteside often doesn’t play at all; but while that gets you better one-on-one interior and perimeter defense (from Bam Adebayo), it comes at the expense of imposing size and interior help-side defense, dominant rebounding (and the garbage points that come with it), and, when utilized effectively, what has the potential to be a solid framework in which to initiate the offense.
All of which leads to inconsistent offensive output – which far too often requires herculean, on-the-run three-point shooting outbursts by Wayne Ellington to bail itself out. There just isn’t enough talent for sustained offensive excellence.
What the team really needs is a star.
Stars take the pressure off. They revel in creating plays for themselves and others. They step up in the big moments. They extract the very best from quality role players.
The good news for the Heat is that there are plenty to be had this summer (Kawhi Leonard, Paul George, LeBron James, etc.), and at positions of need.
The problem for the Heat is that they have few resources with which to get one. Signing one requires cap space and a willingness on behalf of the player. Trading for one requires trade assets (and perhaps a willingness on behalf the player to commit to stay over the longer-term). Acquiring one via sign-and-trade requires a willingness, trade assets, and adherence to a hard cap on spending. All of which would be extraordinarily challenging for a Heat team without a whole lot of flexibility.
If the Heat were to round out a 14-player roster through free agency in the cheapest possible way this summer, they’d end up with a team salary between $124M and $126M, depending upon whether Olynyk and/or Waiters collect their bonus money. That’s already higher than the $123M projected luxury tax threshold, and that’s before even dealing with Ellington… let alone improving the roster.
The Heat can retain Ellington if they choose. He’s coming off his best season as a pro but, having earned $25M over his first nine NBA seasons, he’s turning 31 in November. He’ll want what could be his last chance at a sizeable contract. Miami can leverage his Bird rights to offer him a salary of up to $7.5M on a one-year deal, or a starting salary of up to $11.0M on a deal that lasts between two and four years. That would surely be enough. The bigger issue is with the luxury tax. Each dollar over the minimum only increases the team’s luxury tax burden. The Heat would surely love to bring him back, but do they want to be spending even more luxury tax dollars to do it?
The Heat also have access to exception money, which they can deploy if they choose. They’ll have access to both the Non-Taxpayer Mid-Level Exception ($8.6M starting salary, up to four years) and Bi-Annual Exception ($3.4M, up to two years). But using either one would subject the team to a hard cap on spending at the apron (projected at $129M). They could also choose to bypass these exceptions and instead utilize the Taxpayer Mid-Level Exception ($5.3M, up to three years), which would provide greater flexibility without the brick wall on spending. But again, do you think the Heat are likely to utilize any one of these exceptions without first somehow reducing their team salary?
Which leads to the third option: Trade scenarios… whether to improve the roster, to shed salary, or both.
You can bet Micky Arison doesn’t want to be paying the luxury tax next season. Not for this team anyway. If the Heat were somehow able to grab a star, he’d gladly do it (and make just about anyone or anything available to get it done). But without a clear path toward title contention, he will be reluctant. As any NBA owner would be. Which leads to one likely conclusion: Pat Riley will, as always, battle for all the best free agents and possible trade targets this summer and, if he fails, a primary focus for the team to start the summer could be to shed salary.
It’s not just about avoiding the luxury tax for next season. It’s also about avoiding the luxury tax for 2019-20. The Heat already have as much as $121M in guaranteed salary to just nine players for that season (assuming all options are exercised). A mid-round 2019 first-round pick — which feels like it’s coming — would cause Miami to cross the projected tax threshold ($131M) that season as well. And that’s before even dealing with Winslow.
The oddity of it all is that the Heat knew precisely what they were getting into when they doled out $205M in new long-term free agent money last July, with the current tax line projections for each of the next two seasons remaining unchanged since then.
Nevertheless, this is very much a middling team in luxury tax hell. Which makes just about everyone a potential trade target, depending upon the circumstances (whether it’s to make this team better, clear positional logjams and/or reduce team salary), and several facing key challenges.
Whiteside was a dominant force when he signed his four-year, $98.4M contract. But after a strong first season under it, the Heat has allocated a somewhat befuddling number of minutes to him — fewer total minutes than rookie Bam Adebayo, who started the season out of the rotation entirely. Part of that was due to injury. But some of it was also by choice. Whiteside is a polarizing figure. He can deliver game-changing performances at times, but if he’s not involved or performing well, he can be virtually unplayable and highly temperamental. He constantly wants the ball in the post, but he’s largely a pick-and-roll type player. And since really only Wade has the skill-set to consistently capitalize on that, he’s often left sullen and unsatisfied. It’s tough to get a read on the Heat’s intentions with him, and whether Spoelstra’s match those of Riley. Perhaps the Heat are increasingly inching closer to trying to move on, and giving Adebayo his shot. But the Heat’s decisions as to how to utilize him, and his play when he was so utilized, has cratered his trade value before what the Heat brass likely things is fair. They’ll surely want something of value in return (or, at the very least, not to have to give up something of value to make it so), and that won’t be easy.
Tyler Johnson could be even harder to move. The Heat have been subtly trying for more than a year. While he’s a solid two-way player, his $19.2M payouts in each of the next two seasons, $38.5M total, are nowhere near market value. His contract also contains a 15% trade bonus which, if he were to be traded this summer, would pay out another $2.9M. Johnson would have the sole power to reduce or eliminate it (which gives him a small degree of leverage over his trade destination), but, if he doesn’t, the Heat would need to pay it, and the team to which he’s traded would need to add it to his cap hit(s). If he’s traded prior to July 1, the bonus would be spread evenly over the 2017-18 and 2018-19 seasons, bringing his cap hits to $7.3M and $20.7M, respectively. If he’s traded after July 1, the bonus would be allocated exclusively to the 2018-19 season, bringing his cap hit to $22.1M. His cap hit for 2019-20, assuming he ultimately exercises his player option, would remain at $19.2M. He’s also highly injury prone, and may even need surgery this summer to repair this damaged left thumb.
James Johnson is every bit the two-way talent he was when Miami signed him to his four-year, $60.0M contract last summer — an underrated downhill attacker of the basket, who we lovingly wish could be just a bit better with his outside shooting, and a highly skilled and versatile defender — but he’ll be 34 years old collecting $16.0M by the time it runs out.
Waiters never really got the chance to prove the second half of last season wasn’t a fluke. The start to the season was not promising. He certainly has a chance to outplay his deal when healthy, but there’s a ton of risk in taking on the three years and $39M+ remaining on it. It’s not even clear if he’ll be ready for training camp.
Olynyk has his own 5% trade bonus, which would pay out $1.1M if he’s traded this summer, but doing so would starve the team of much-needed floor spacing. The Heat would surely be reluctant to do that.
Richardson’s issue is not so much a challenge but an opportunity. The Heat surely don’t want to trade him either. But if he is to be traded prior to July 1, his outgoing salary for trade purposes would be $1.5M (his 2017-18 salary). If he’s traded after July 1, it jumps to $9.4M (his 2018-19 salary). There’s some salary-matching gamesmanship to be had there.
So how can the Heat facilitate a salary-reducing trade (and hopefully improve at the same time)?
They can take back lesser salary in return for any traded player. Every other team in the NBA, except for those who would exceed the luxury tax line in doing so, could take on any one of the Heat’s eight-figure players and send back a player(s) making at least $5M less in return. The trade partner would effectively be buying down the cost of the Heat player, while the Heat would still be recognizing net savings equal to the difference in salaries.
They can throw in assets as a sweetener.
The Heat, in any potential trade they pursue this summer — whether it be to improve the roster, to dump salary, or both — could offer some combination of player assets, cash considerations, and/or draft picks. Potential player assets could include Goran Dragic (who would be eligible to be extended through 2020-21 in the context of a trade), Josh Richardson (whose 4-year extension kicks in next season), Justise Winslow (who is eligible to sign a rookie-scale extension starting in July, or could be made a restricted free agent in the summer of 2019 if not), Kelly Olynyk (who just completed the first season of his 4-year deal) and Bam Adebayo (who just completed the first season of his rookie-scale deal). Cash considerations are fully depleted for the current salary cap year, but will be replenished with the full $5.2M allocation starting in July. As for draft picks, while the Heat can’t currently trade away any first-rounders until the 2023 draft, they will become eligible to trade their 2019 first-round pick after their 2018 first-round pick, which they traded to the Phoenix Suns as part of the Goran Dragic trade, is utilized on June 21 (if they want to add any protections to it, though, they’d need to be creative). At that point, Miami will own six of its next seven first-round draft picks (all but 2021), of which as many as three will be eligible for trade (2019 and 2024 OR 2019, 2023 and 2025). Miami has already traded away most of its second-round picks, but still has its selections in 2022 and 2024 (31-55), both of which are available to trade, as will be its 2025 selection after its upcoming selection, currently owned by the Houston Rockets, is made in the June draft.
But Riley has to be careful in any potential pursuit to shed salary. It’s often very difficult to justify trading away assets to do so, particularly for a team that has so few of them to begin with, when the primary goal for doing so is financial. On the one hand, dumping big salary still won’t provide the team any material cap space for either of the next two seasons. On the other hand, it could incentivize the Heat to re-sign Ellington, utilize their available exceptions, and/or possibly even receive back a quality player in return.
Ultimately, if the Heat can’t identify an acceptable trade this summer that drops them below the tax line, you might find them employ some subtle salary cap management at the fringes. They only project to be as much as $3M over, which can be creatively squeezed out. Perhaps a finalized regular-season roster at 14 players (one below the 15-player max). Perhaps a few end-of-roster guys signed to minimum-salary contracts with the intention of being traded at the Feb. trade deadline. Perhaps a two-way contract that’s ultimately converted after they are. When it comes to the tax line, every dollar will count, and the Heat are masterful at sneaking below it.
However it works out, the hope is that a healthy return of Waiters, a fully immersed Olynyk, and the continued improvement of a solid group of Heat youngsters — Richardson, Winslow, Adebayo, etc. — could propel the team forward to bigger and better things next season and, with a 2019 first-round pick when it’s over, perhaps even bigger things thereafter. But that can be no doubt that such a team needs more. Much more.
And if the ultimate goal is to recover flexibility for a partial or complete rebuild through free agency, it’ll probably have to wait until at least the summer of 2020. Riley will have more than $50M of cap space then (excluding potential Winslow money), or what could possibly be an entirely clean slate in the summer of 2021. He’d be playing with fire though. If it were to fail, and these things tend to be very hit or miss, Miami still has that unprotected 2021 first-round pick it owes to the Phoenix Suns looming in the distance.
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