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The Death of The Free Agency Rebuilding Plan?

December 21st, 2016 2 comments
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The NBA and the National Basketball Players Association announced last week that they have reached agreement on a new Collective Bargaining Agreement. If the deal is ratified by both sides, which is a formality, the league will be assured of labor peace for at least the next six years.

At the highest of levels, not much would change in the new deal.

The split of league-wide revenues will remain the same – the players will be virtually assured to receive a 51 percent share (as they are in the current agreement). The salary cap will be calculated the exact same way. The luxury tax will be calculated the exact same way, and teams will be penalized just as severely for crossing it.

Rather than pushing for sweeping changes, the NBA was clearly focused on one thing — stopping superstar players from leaving their teams in free agency. Since 2010, several top-tier players have left as free agents, including LeBron James and Chris Bosh (2010), Dwight Howard (2013), and Kevin Durant (2016). Carmelo Anthony (2011), Chris Paul (2011) and Kevin Love (2014) also forced trades under the threat of leaving their teams with nothing in free agency.

To stop the flow, the league created new rules that provide huge financial incentives for a select group of top-tier players to stay with their existing teams – rules with which the players (the union for whom was led by the players who would benefit the most) were more than happy to oblige.   Read more…

How New CBA Changes Will Impact the Miami Heat

December 16th, 2016 4 comments
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When the NBA’s new collective bargaining agreement becomes official, benefits should abound for both players and teams. Minimum salaries, rookie-scale contracts, the mid-level exception, the bi-annual exceptions, and maximum salaries are all increasing, which should placate most players. Various rules will be implemented to entice players to remain with their existing teams, which should placate most teams.

(For full details on all the changes in the new CBA, clink this link.)

But all those changes do come at a consequence – it will be more difficult for teams to rebuild through free agency, teams like the Miami Heat.

The Heat is, as president Pat Riley declared, a rebuilding team.

But Miami has compiled a solid core of multi-talented youngsters — in guards Tyler Johnson and Josh Richardson, forward Justise Winslow, and center Hassan Whiteside — from which to work. And it has a strong lead guard in Goran Dragic to spearhead the charge.

In his first season, Winslow showed promise as a defender. But his offense at times proved to be so limited that defenders constantly sagged away from him, often effectively relegating the Heat to playing four-on-five basketball. If he improves his shooting, he could quickly become one of the Heat’s most vital players. If he doesn’t, his future as a starter (or even on this team) could quickly be jeopardized.

Imagine, for a moment, a Dragic – Johnson – Richardson – Whiteside four-man unit.

In an offense system designed to capitalize upon it, what was once a shocking inability to space the floor – predicated largely on the always imperfect backcourt tandem of Dragic and Wade — could now be considered a strength. And depending upon where Richardson – who led the entire NBA in three-point shooting percentage after the All-Star Break, at 53 percent – and Johnson – who shot 41 percent on three-pointers last season (excluding heaves), despite often being miscast on offense as a point guard, which has continued on this season at full detriment to his development — level off with their shooting, a potentially big one at that.

That type of shooting could provide Whiteside — now a franchise cornerstone with his four-year, $96.4 million contract secured – the much-coveted floor-spacing into which to maneuver.

At 7-feet, 265-pounds, and with a ridiculous 7-foot-7-inch wingspan, Whiteside alters the geometry of the game. He’s not at all a back-to-the-basket big — and the Heat is doing the offense a huge disservice by treating him as such — but he can a huge initiator of offense, whether or not he ever even touches the ball. He hasn’t yet mastered the art of either the pick or the roll, but he has the tools to become of the best roll men in the NBA. And, even if not, his mere presence in the paint sucks in defenses with more force than a Dyson. That yields tons of garbage points and offensive rebounds for him, and open shots for others.

This Heat team may not be showing it on the court thus far this season, but it has the potential to be fast in transition and to capitalize upon a type of floor spacing in the half court it hasn’t had in quite some time.

Imagine what Dragic, a relentless attacker of the rim, and Whiteside, a dominant interior presence, could do in an offense that spaced the floor around them. Is it so preposterous to envision a constant stream of Whiteside pick-and-rolls, and swished corner three-pointers when defenders rotate away from Heat shooters to try to stop it?

Is it so preposterous to imagine that with Whiteside down low; Richardson and Johnson to space the floor around him; and Dragic’s speed and ability to break down a defense; that the team could develop into be a force with which to be reckoned, if they’re able to add a star player or two — perhaps a power forward to replace the unfortunately departed Chris Bosh, a small forward that would allow the Heat to stagger Johnson and Richardson, or both?

The organization has maneuvered around various salary cap issues in order to maximize its free agency options to achieve that goal. The summer of 2017 will be a particular emphasis, with the Heat able to begin the process of removing the salary of Bosh from its cap sheet on or after Feb. 9, 2017 and the salary of Johnson set to soar the season thereafter.

(For full details on Bosh’s contract and its impact on the Heat’s salary cap situation, including potential cap relief and a possible return of his salary to the Heat’s cap sheet in the seasons thereafter, click this link.)

But the new agreement, when ratified, will have several implications for the Heat in pursuit of its desired summer of 2017 rebuild.  Read more…

NBA, Players’ Association Reach Agreement on New CBA

December 14th, 2016 1 comment
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The NBA and the National Basketball Players Association jointly announced Wednesday that they have reached a tentative deal on a new Collective Bargaining Agreement (CBA), pending ratification by both team owners and the league’s players.

In order to give both sides enough time to review the terms of the agreement, hash out a new CBA, and hold their respective votes to ratify it, they have agreed to extend their mutual deadline to opt out of the existing CBA from Dec. 15, 2017 to Jan. 13, 2017.

Ratification of the deal is, at this point, nothing more than a formality. In the meantime, however, a term sheet containing the key terms of the agreement has been distributed. According to that term sheet, the following changes to the current CBA will be made:
Read more…

The Bizarre Saga of Donatas Motiejunas

December 7th, 2016 No comments
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Update (12/15/16):

The Houston Rockets apparently never actually signed Donatas Motiejunas. But whether they did or did not  sign him is irrelevant. In both cases, the Rockets could have conditioned the contract (in a case where they didn’t sign him, as a condition to offering the contract; and in a case where they did sign him, as a condition to the validity of the contract in accordance with Exhibit 6) on him passing a physical exam. The Rockets did so condition it, and Motiejunas failed. Which returned him to restricted free agency once again. 

After consultation with the league office to find an amicable solution to a contentious situation, the Rockets have renounced their rights to Motiejunas, making him an unrestricted free agent. He is now free to sign with an team except the Brooklyn Nets, who are prohibited from signing or acquiring him until December 9, 2017. 

Update (12/9/16):

The Houston Rockets and Donatas Motiejunas have agreed to a new contract. The Rockets’ first refusal exercise notice to match the offer sheet Motiejunas signed with the Brooklyn Nets has been withdrawn, and the new deal will presumably be signed shortly.

The new deal will contain the same basic structure as the offer sheet (as detailed herein), including $31 million in base salary, $4 million in likely bonuses and $2 million in unlikely bonuses. It will have a salary cap hit for this season of $9.3 million (equal to his $8.3 million base salary, plus $1 million in likely bonuses).

The primary differences between the new deal and the offer sheet will be that: (i) the guarantee on Motiejunas’ second year salary will get pushed back to July vs. March 1, and (ii) the Rockets will be able to trade Motiejunas without restrictions after the end of the season (i.e., the end of the regular season or, if he’s on the playoff roster, after the Rockets either win the title or are eliminated) vs. being restricted from trading him without his consent for one year.

The lengthy saga, however, is not quite over just yet.

The Rockets could have conditioned the new contract on Motiejunas passing a physical examination (Exhibit 6 to the Uniform Player Contract). The determination would be made in the sole discretion of a physician designated by the Rockets. The exam would need to be completed within three business days of executing the contract (which, if it were executed today, would be by next Wednesday) and the results would need to be reported to Motiejunas within six business days of executing the contract (which, if it were executed today, would be by the following Monday).  If the physician appointed by the Rockets determines that Motiejunas has failed his physical, he would be returned to restricted free agency. 

Whatever happens, the Nets are now officially prohibited from signing or acquiring Motiejunas for one year from the date the first refusal exercise notice was withdrawn (i.e. until December 9, 2017 or thereafter). 

————

Donatas Motiejunas is having a tough time navigating the difficult world of restricted free agency.

There are two types of free agency in the NBA: unrestricted and restricted. Both types of free agents are free to re-sign with their prior teams. An unrestricted free agent is free to sign with any other team as well, and there’s nothing his prior team can do to stop it. A restricted free agent can also sign with any other team, but his prior team can retain him by matching the terms of that offer. This is called the “right of first refusal.”

Restricted free agency is allowed only in limited circumstances: For first-round draft picks who complete all four years of their rookie-scale contracts, and for players who have been in the league for three or fewer seasons. Only these players qualify for restricted free agency, and only if their prior teams first submit to them a “qualifying offer” at some point between the day following the completion of the NBA Finals and the subsequent June 30. A qualifying offer is a standing offer of a one-year guaranteed contract, which the player can accept at any time while it remains outstanding.

Motiejunas was the twentieth pick in the first-round of the 2011 NBA draft. After having completed the fourth and final year of his rookie-scale contract in 2015-16, the Houston Rockets tendered a $4.4 million qualifying offer on June 30, 2016. Motiejunas therefore became a restricted free agent this summer.  Read more…

Recapping the Miami Heat Summer of 2016

October 21st, 2016 1 comment
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Update (10/22/16): The Heat has chosen to waive Briante Weber and Beno Udrih, and keep Rodney McGruder. The Heat’s backup point guard duties effectively therefore fall to Tyler Johnson.

The final 15-player roster is as follows: Goran Dragic, Tyler Johnson, Josh Richardson, Wayne Ellington, Dion Waiters, Rodney McGruder, Justise Winslow, Chris Bosh, Josh McRoberts, Derrick Williams, James Johnson, Luke Babbitt, Udonis Haslem, Hassan Whiteside and Willie Reed.

The summer of 2016 was perhaps the most polarizing and divisive in Miami Heat history.

For Pat Riley, it was largely about two things: Retaining Hassan Whiteside, and maximizing flexibility to target a whale to complement him in the future. Despite the ensuing hell-fire it would cause.

Dwyane Wade is gone, having felt disrespected by Riley for years.

He would argue that Riley’s refusal to offer one last long-term contract, one befitting the most vital player in Heat history – whose 13-year tenure spanned nearly half the team’s 28-year existence – exemplifies that disrespect. That in the wake of LeBron James leaving two summers ago, Riley clearly made retaining Chris Bosh his first priority (offering a full five-year, $119 million max contract) while leaving himself toiled with a sub-par offer for a talent of his caliber ($15 million, with a player option for a second season at $16 million). That the offer was better last summer ($20 million), but only after owner Micky Arison intervened when highly contentious negotiations with Riley had stalled and only in exchange for an even shorter term (one year). That Riley clearly made his first priority for this season to retain Whiteside, and his second priority to pursue the never realistic pipe dream that was Kevin Durant. Wade is no third option – particularly after what had happened the prior two summers, and particularly when successful pursuits of the first two would severely limit that which would be left over for the organization to compensate himself. After all, it was only Riley’s failed pursuit of Durant that made even the two years and $41 million he did offer possible. The initial offer was downright appalling (some speculating in the neighborhood of $10 million per season).

He would argue that Riley didn’t even have the decency to present that $41 million offer. That Riley never even met with him this summer. That his inaction was intentional. That every move he made this summer had an ulterior motive. That he never truly wanted Wade back.

Riley would surely object to the assertion that Wade was disrespected.

He would argue that he was eager to sign Wade (and James and Bosh) to a full max contract in the summer of 2010, which would’ve paid out an NBA-second-best $126 million over the past six years; it was Wade who chose to take less.

He would argue that he was fully prepared to honor the two years and $42 million remaining on Wade’s contract, which would’ve been sixth highest in the NBA, in the summer of 2014; it was Wade who chose to opt out.

He would argue that offering a string of shorter-term deals is not a sign of disrespect but rather a sign of compromise toward a common goal, in which the Heat could gain flexibility and Wade could benefit financially for enabling it. That these past two summers were a perfect microcosm. Wade had petitioned for a three-year deal paying out in the range of $45 million to $50 million in the summer of 2015; adding the one-year, $20 million deal he took that summer to the two years and $41 million he was offered in July totals to $61 million.

Both would be right. And both would be wrong. But did Riley truly want Wade back?

It seems reasonable to speculate that he may not have.  Read more…

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Pat Riley Says Chris Bosh’s Career with the Heat is “Probably Over”

September 26th, 2016 No comments
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Pat Riley, in a meeting with reporters, said that Chris Bosh’s career with the Miami Heat “is probably over” and that the team is “not working toward his return.”

Bosh, an 11-time All-Star, failed his preseason physical last week. The Heat had been prepared to clear him for play, contingent on him passing. During the testing, however, doctors reportedly found continued evidence of blood clotting.

“We headed down the road very excited to a point where we thought it would work,” Riley said. “And then the physical couldn’t clear him to the next step.”

Bosh was initially diagnosed with blood clots that traveled from his left leg to his lung in February 2015, and was subsequently diagnosed with blood clots in his left calf in February 2016.

Blood clotting is a normal process that occurs in the body to prevent bleeding and promote healing after an injury. The body forms blood clots when the platelets within the blood encounter a damaged blood vessel, and then breaks them down as the damaged tissue heals.

Clots can form unexpectedly, however, without notice or purpose, and have dangerous consequences. Certain clots, such as those that start in the leg or calf (called a deep vein thrombosis, or DVT) and travel to the lungs (called a pulmonary embolism), can be fatal. And those who have endured previous clots in the past are particularly susceptible to a recurrence.

According to the NIH, more than 600,000 people in the U.S. are diagnosed with DVT each year and roughly 30 percent of those patients develop a recurrence within 10 years, with the risk being greatest in the first two years. Recurrence is more likely in those who initially presented with a pulmonary embolism as well, as did Bosh, and is more likely to be another pulmonary embolism (as opposed to a DVT alone), leaving Bosh susceptible to a potentially more serious recurrence.

That Bosh has already endured multiple blood clotting episodes and that he plays a contact sport (professional basketball), both sharply exacerbate the risk of future recurrences. The risk for Bosh is therefore very real.

Blood clots are treated with anticoagulant drugs (blood thinners), which prevent further blood clots from forming as the body’s normal systems work to break up the existing clot(s).

For those who have endured a single clotting episode, blood thinners are typically continued for up to six months. Many professional athletes who have suffered blood clots have been able to successfully resume their careers without incident after completing their initial blood-thinner regimen.

However, people who suffer multiple blood clots are at sharper risk of a recurrence, and are typically therefore recommended to remain on blood thinners for the rest of their lives.

Blood thinners greatly reduce the likelihood of future blood clots, but they can have a potentially serious side effect: bleeding.

Since blood thinners slow the clotting of blood, unwanted and sometimes dangerous bleeding can occur with the use of these medications. Although infrequent, uncontrolled bleeding caused by blood thinners can be very serious. A blow to the head, for example, can cause bleeding on the brain and kill you!

Doctors and teams are therefore hesitant to allow players on blood thinners to return to contact sports, where a potential trauma could have disastrous consequences.

The issue for Bosh, then, becomes:

If he doesn’t take blood thinning medication, he is at risk of sustaining more, potential fatal, blood clots. Playing professional basketball only exacerbates that risk.

If he takes blood thinning medication to reduce the likelihood of a future clot, playing professional basketball puts him at increased risk of sustaining a potentially fatal bleeding event.  Read more…

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Miami Heat Sign Dion Waiters to 2-Year, $5.9 Million Deal

July 26th, 2016 No comments
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Pat Riley wasn’t expecting to use the Miami Heat’s $2.898 million mid-level exception for room teams this summer.

“As far as the $2.9 million room exception, we’re going to hold on to that,” Riley said on July 16. “I don’t think we’re going use it for the rest of the summer. There isn’t anybody out there right now that I want to give it to.”

Little did he know, things would dramatically change just two days later.

There had been mutual interest between Riley and Oklahoma City Thunder free agent shooting guard Dion Waiters since the start of free agency. Any such possibilities, however, were rendered effectively meaningless by virtue the fact that he was a restricted free agent.

Waiters’ restricted free agent status caused two serious problems for Riley(1).

First, it meant that Riley would need to offer a contract that would not only be acceptable to Waiters, but also one that would be high enough such that he could be relatively certain the Thunder would not match. The Thunder, at the time, were expected to match any reasonable offer.

Second, it meant the contract would need to be for at least two seasons in length (not including any option years).

The combination made a Heat pursuit of Waiters effectively impossible. Any first-year salary that, at the start of free agency, figured to be high enough to entice the Thunder not to match would also need to contain a second-year salary high enough to destroy any of the Heat’s grand visions for the summer of 2017. The Heat has big plans for that summer.  Read more…

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Breaking Down Russell Westbrook’s Complex Situation

July 24th, 2016 No comments
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Two months ago, the Oklahoma City Thunder were positioned to perhaps consider themselves the best team in the NBA. They had pushed the defending champion and all-time regular season winning percentage record-holding Golden State Warriors to brink of elimination in the Western Conference Finals, with a home game among three opportunities to close the deal. A single win in three chances, followed by a series win versus a Cleveland Cavaliers team against whom they were projected to be favored, and the Thunder would be NBA champions for just the second time in franchise history, and the first since 1979.

Things didn’t work out as planned.

The Warriors went on to eliminate the Thunder in seven games. A short time later, Kevin Durant went on to join the Warriors, leaving Russell Westbrook and the Thunder to pick up the pieces.

Westbrook is set to become an unrestricted free agent next summer. With the balance of power in the Western Conference dramatically shifted, if a return trip to the NBA Finals is a priority, he may not want to remain in Oklahoma City.

The concept has sparked a fire-storm of speculation about a potential trade, which would at least allow the Thunder to avoid losing two top five NBA players to free agency in the span of a single year without receiving back anything in return.

The ability of Westbrook to leave in free agency next summer, however, is just as problematic for a trade partner as it is for the Thunder. If Westbrook were to leave the following summer, the trade partner would not only lose him without receiving back anything in return but also sacrifice the assets it took to acquire him. To that end, if a trade partner is to risk the type of assets the Thunder will demand for him, it is likely to demand that Westbrook agree to an extension.

The Thunder, for their part, haven’t given up hope of retaining their star point guard either. In fact, it’s very much the opposite. They, too, are positioning to offer Westbrook an extension that would provide the certainty required to build the team’s future around him. And they could make it quite tempting.   Read more…

Breaking Down James Harden’s Renegotiation and Extension

July 19th, 2016 No comments
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Heading into the 2016-17 NBA season, extensions for veteran players had all but vanished for several years — the result of changes to the league’s Collective Bargaining Agreement that make it more beneficial for players to finish out their existing contracts and enter free agency thereafter, even if they plan to re-sign with their prior teams.

The rapidly rising salary cap – which has reached an all-time record $94.1 million this season, a whopping 34.5 percent increase from $70 million in 2015-16 – has, however, created a short-term opportunity for teams to leverage intricate salary cap rules to offer key players extensions that, in some cases, can be too tempting to pass up.

Many teams are finding themselves with more salary cap space than quality free agents on which to spend it. For these teams, that cap space can be used to simultaneously renegotiate and extend the contracts of its key players, giving them more up-front money in exchange for more seasons under team control.

This is exactly what the Houston Rockets elected to do with its key player, James Harden, in what to this point has been the most intriguing utilization of cap space thus far this summer.

Contract renegotiation is a concept largely attributed to various other sports. Only very rarely do they occur in the NBA. They can only occur on or after the third anniversary of the original signing date of a contract (or extension or renegotiation), and they can only increase a player’s salary. To do so, a player’s team must have salary cap space to cover the full amount of the proposed increase.

Heading into this season, Harden had two seasons remaining on his contract — $16,784,032 for this season, and $17,811,626 for next.

Though he signed a “maximum” five-year rookie-scale contract extension in October 2012 that ran through the 2017-18 season, the subsequent jump in the salary cap meant that he was set to earn far less than his current maximum salary for this season.  Read more…

Pat Riley Addresses the Miami Heat Summer

July 17th, 2016 1 comment
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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.  Read more…