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Kevin Durant Faces an Intriguing Free Agency Decision

May 23rd, 2016 No comments
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I wrote this post on May 1, 2016, after the San Antonio Spurs steamrolled the Oklahoma City Thunder in the first game of their Western Conference semifinals match-up, but decided to wait to publish it in the order of offseason posts I have selected. The Thunder have since defeated the Spurs in six games, and blown out the Golden State Warriors to take a 2-1 lead in the Western Conference finals. I no longer feel it is realistic, no matter what happens from here, to think that Durant would leave the Thunder this summer. But since I already went through the trouble of writing this post, and since teams such as the Miami Heat will take a shot, I will publish it anyway. 

I do have a request though. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I do it strictly for you. I don’t get paid in any way (beyond donations). I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

Four years ago, an upstart Oklahoma City Thunder team was blasting its way into the 2012 NBA Finals on the strength of four stud young draft picks — Kevin Durant, Russell Westbrook, Serge Ibaka and James Harden — who were each 23 or younger, supremely athletic and immensely talented. They seemed destined to stake their claim as the preeminent Western Conference powerhouse for the next decade or so.

Things haven’t worked out as planned thus far.

The Miami Heat went on to take out the Thunder in five games, in what appeared at the time to be the first of many such showdowns. But Oklahoma City then traded Harden to the Houston Rockets prior to the start of the 2012-13 regular season, after the sides couldn’t agree on a contract extension. Harden wanted a max contract that would’ve paid out $61 million over four years, while the Thunder were only willing to offer as much as $54 million.

It was a controversial decision, made as part of a long-term plan to avoid ever having to pay the league’s new and harsher luxury tax. As it turns out, though, Oklahoma City could’ve given Harden his max deal and still only have had to pay the tax for, at most, one season. The Thunder has since paid the tax twice in the three years since he’s been gone.

Over those three years, a Westbrook torn right meniscus ended any shot at a title in 2013, an Ibaka strained left calf contributed to the team’s premature playoff exit in 2014, and an improperly healed Durant Jones fracture in his right foot led to the Thunder missing the playoffs outright in 2015.

In that space of time, competition at the top end of the Western Conference stiffened. Stephen Curry established himself as the best shooter and his Golden State Warriors the best team in NBA history, while the San Antonio Spurs brilliantly reinvigorated their aging core with acquisitions of Kawhi Leonard and LaMarcus Aldridge.

Now we’re left wondering if a team once projected as an NBA Finals mainstay can return even once.

Durant will be 28 to start the 2016-17 season. The lanky 19-year-old rookie from the University of Texas has since collected an MVP trophy, four scoring titles, five (and soon to be six) NBA First-Team selections and seven All-Star Game appearances, but he doesn’t have an NBA title to his name.  Read more…

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Chris Bosh Status and Insurance

May 22nd, 2016 No comments
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Chris Bosh is facing an uncertain future. That the Miami Heat could receive salary cap relief in the unlikely event that he does not return to play and it is determined that continuing to play would constitute a medically unacceptable risk is now widely known (and is described in detail in this post). There is also a separate, but related, concept at play: insurance.

This post describes how the Heat could collect insurance to offset Bosh’s future salary payments.

This post was written quickly, in answer to multiple questions I have received on the topic. While, as a person who has dealt with his own life-altering medical experience, I hate describing these types of issues, it seems irresponsible for me not to at least quickly address issues the Heat organization is surely considering. Hopefully these two posts will cover all related questions. 

I do, however, have one request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I do it strictly for you. I don’t get paid in any way (beyond donations). I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see it being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

The NBA has for decades secured league-wide temporary total disability insurance coverage for the benefit of its member teams. Every team in the league is required to participate in the program, which covers approximately 150 players per season.

That the league-wide program is mandatory is done for a key reason: Doing so allows the insurance provider to mitigate its risk, more accurately project potential claims, to feel confident it is not being asked to provide coverage for only the most injury-prone players and, ultimately, to reduce the cost of coverage and make it more affordable.

Such a program is possible only in a highly regulated environment like that in the NBA, where individual payouts are limited by maximum salary rules and teams are required to spend at least 90 percent of the salary cap each season on player salaries.

Under the terms of the NBA’s insurance program, each team is required to submit for underwriting consideration five players, each of whom must be among the team’s five highest-paid players based on either the current season or total remaining salary. Teams may submit for consideration more than five players if they so choose.  Read more…

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Chris Bosh Status Remains Unclear

May 20th, 2016 No comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can (and do so on a regular basis behind the scenes).

Miami Heat forward Chris Bosh is facing the harsh reality known to many who have been treated for blood clots: unfortunately, a recurrence can be common.

In February 2015, Bosh was diagnosed with a deep vein thrombosis (DVT), a blood clot which formed in a deep vein of his calf. A piece of that clot then broke off from the wall of the vessel, traveled via the bloodstream up the body, through the right side of his heart, and lodged in an artery of his lung, blocking blood flow through the lung – a very serious, even life-threatening, condition known as a pulmonary embolism (PE).

Pulmonary embolisms can cause damage to the lung tissue, and put increased strain on the heart. This could even cause the heart to become enlarged, or in a worst-case scenario, lead to heart failure.

Bosh was rushed to South Miami Hospital, where he avoided a potential life-threatening situation.

Blood clots can form in people who have a genetic predisposition to them, but most commonly they are caused by long periods of immobility in many cases from prolonged air travel (particularly for players of Bosh’s height, 6-feet, 11-inches, where leg room is more limited), after having undergone surgery, or after having experienced a recent trauma, making professional athletes, who frequently deal with one or all of these issues, particularly susceptible.

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). Blood thinners can stop clots from forming, slow down the formation of clots, stop clots from getting bigger, or prevent clots that have already formed from travelling to other parts of the body. Treatment is typically continued for three to six months.

Blood thinning medications save lives. But, they also pose one possible and very 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.

Bosh missed the remainder of the 2014-15 while taking Xarelto, one of a handful of the newer anticoagulant drugs on the market today.

After treatment with blood thinning medications along with adequate rest after treatment, many athletes, including Mirza Teletovic with the Brooklyn Nets this past season and Anderson Varejao with the Cleveland Cavaliers two seasons prior, have been able to resume play and go on with their careers.

Bosh returned to play start the 2015-16 season. He indicated upon his return that, according to testing, he was not aware of any hereditary issues he may have that would increase the risk for recurring episodes, leading to optimism that he could resume his career without further incident.
Read more…

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Tyler Johnson Is a Big Part of Miami Heat Future

May 19th, 2016 No comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

Tyler Johnson and Hassan Whiteside have some intriguing parallels.

Both were mid-year signees during the 2014-15 NBA season. Both have been playing under partially guaranteed, two-year minimum salary contracts that expire at the same time. Both will be free agents this July. And both represent a potential future of youth and athleticism at positions of critical need for the Miami Heat.

Despite the similarities, however, their free agency statuses are very different. Johnson’s future in Miami is far more secure, and the price it will take to retain him is far less expensive.

Johnson, like Whiteside, will be a free agent this summer, having accrued two years of service with the Heat. However, Johnson, unlike Whiteside, has accrued just two total years of NBA service, to Whiteside’s four. As such, he will face two critical restrictions that will ensure he remains in Miami.

First, Johnson will be a restricted free agent: This will give the Heat the right to keep him by matching a contract he signs with any other team.

Restricted free agency exists only on a limited basis. It is allowed only for players coming off rookie-scale contracts, and for players who have been in the league three or fewer seasons (as has Johnson). In order to make their free agent a restricted free agent, a team must submit a qualifying offer to the player between the day following the last game of the NBA Finals and June 30. The qualifying offer is a standing offer for a one-year guaranteed contract, which becomes a regular contact if the player chooses to accept it. The amount of the qualifying offer for Johnson will be $1,180,431. If the Heat extends Johnson a qualifying offer, it will have the legal right to match any contract he signs with any other team.

Second, Johnson will be subject to the Gilbert Arenas provision: This will limit what any other team can offer him, all the way down to an amount that the Heat, by rule, will be able to match.  Read more…

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Analyzing the Miami Heat Approach to Dwyane Wade

May 18th, 2016 No comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can (and do so on a regular basis behind the scenes).

“The whole free agency thing… I don’t want to be in it this summer. I don’t want to be on the market at all…. I’m not curious at all… I want to be able to sign my deal [with the Heat] and move on, and not have to deal with any rumors, any free agency, any this, any that. This is where I want to end my career. So we’ll figure it out.”

That was Dwyane Wade, speaking in February to Barry Jackson of the Miami Herald about his desire to avoid testing the free agent market and instead wanting to wrap up a new deal without any of the drama of last offseason, when he and the Miami Heat were initially so far apart on contract negotiations as to threaten the continued tenure of the future Hall of Famer with the only professional organization he has ever known.

Wade’s preference was for a three-year deal that paid out somewhere in the range of $50 million. The Heat’s preference was for Wade to opt into his $16.1 million player option but, short of that, for a three-year deal that paid out somewhere in the range of $30 million. The two sides ultimately settled on a one-year, $20 million contract.

The Heat’s primary concern in taking such a tough stance with Wade wasn’t about how much a large salary would cost for the 2015-16 season, with the Heat projected at the time to become the NBA’s first-ever repeater taxpayer, but rather how a large multi-year contract would impact the team’s flexibility for the 2016-17 and 2017-18 seasons.

What was true last year remains true today, which could portend a second somewhat contentious negotiation.

Wade’s likely demands are both clear and reasonable: He’s going to want a three-year deal with as large a payout as possible, though he may be willing to take the payout over four years, allowing the Heat to reduce the annual cap hits associated with his contract while potentially paying him into retirement if he so chooses in the years ahead.

The Heat’s summer, however, will be primarily dictated not by Wade but by Hassan Whiteside, and by what Pat Riley chooses to do in the wake of a potential Whiteside re-signing. What the Heat can offer Wade will be a byproduct of those decisions.  Read more…

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Getting Creative With Hassan Whiteside

May 17th, 2016 4 comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

A lot of teams talk about how they are a family. Aspire to it. But very few actually live it the way the Miami Heat organization does.

In the sports world of today, the Heat culture is rare. Heat players are nurtured. They are supported. They are disciplined. They remain family members for life (even if, eventually, they move on).

And, sometimes, they are asked to sacrifice personal successes for the greater good — be it with playing time, money, ego, or whatever else is necessary. Heat players have often sacrificed for the benefit of the organization, in ways that few other organizations can claim.

Hassan Whiteside will become an unrestricted free agent this summer. He will undoubtedly be asked to make a sacrifice, a financial one, this summer.

He certainly doesn’t need to comply. After all, he’s about to turn 27 years old. He’s made just $3.3 million thus far during his NBA career. And at least one team, if not multiple teams, will surely dangle maximum money at him. That temptation can be hard to resist.

Nobody could reasonably fault Whiteside for acquiescing. Nobody can reasonably fault any player for seeking out as much earning power as he possibly can. NBA careers are short, and can end in a flash.

But the Heat will face a challenge this summer. Even though the salary cap is projected to rise to $92 million, and even though the Heat will start the summer with just $48 million in guaranteed contracts, finding enough room to allocate to Whiteside as well as Dwyane Wade, Luol Deng and Joe Johnson will be difficult, let alone finding the room to allocate to any potential upgrades on the open market.

The Heat will have more than enough cap space with which to dole out whatever contract Whiteside demands. But with only around $40 million of free cap space, allocation decisions will be both critical and limited. Paying more money to one player could potentially mean sacrificing another.

The question therefore needs to be asked: How can the Heat balance Whiteside’s desire to maximize his earning power with its need to maintain maximum flexibility?

Can the Heat build a contract that accomplishes both needs? Is it even possible?  Read more…

A Preliminary Look at the Miami Heat 2016 Offseason

May 16th, 2016 1 comment
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can (and do so on a regular basis behind the scenes).

This is the first in a series of eight posts that I believe will cover all aspects of the Miami Heat summer. This one is meant as the general overview. Each subsequent post will cover specific concepts related to this overview in greater detail, as well as provide specific possible scenarios. Though all eight posts are already written, I will publish one per day. 

The NBA salary cap is set to explode higher this summer, from $70 million this past season to an estimated $92 million.

The massive increase will give the Miami Heat a ton of cap room with which to maneuver. Choosing how to allocate it, however, will force the Heat to make some tough decisions.

Miami will start the summer with just 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.

Miami will also retain the rights to potential restricted free agent Tyler Johnson.

Due to the nature of Johnson’s contract situation(1), at a cost of just a $1.2 million qualifying offer, Miami will be able to sit back this summer and wait for another team to sign him to an offer sheet which, by rule, can have a starting salary no higher than $5.6 million. Then, assuming it times everything correctly, after all of its cap space is used up elsewhere, the Heat can exceed the cap to match that offer sheet and retain him. If no other team engages with Johnson, the Heat can exceed the cap in signing him to a new contract with a starting salary as high as $6.2 million.

Taking into account the $49.8 million in 2016-17 salaries already on the books, the $1.2 million qualifying offer for Tyler Johnson, and applicable charges for open roster spots, Miami would be left with approximately $40 million in cap space with which to spend on its internal free agents – including Hassan Whiteside, Dwyane Wade, Luol Deng and Joe Johnson, among others – as well as any external free agents it may seek to target.

The Heat could increase its cap space even further if it were to waive and stretch the contract of McRoberts, which has two years and $11.8 million remaining on it. By doing so, the Heat would replace his $5.8 million and $6.0 million salaries for the 2016-17 and 2017-18 seasons, respectively, with a $2.4 million dead-money cap charge that would be placed onto the Heat’s books for each of the next five seasons (through 2020-21). That, in turn, would increase the Heat’s cap space to as much as $43 million.

If Miami could instead somehow find a taker for McRoberts without taking any salary back in return, cap space could grow to $45 million. Beyond player assets and a first-round pick all the way out in the year 2023, however, the Heat doesn’t have much with which to entice a potential trade partner to do so.

Choosing how to allocate that $40 million to $45 million of cap space will be of critical concern.  Read more…

NBA Increases 2016-17 Salary Cap Projection to $92M, Tax to $111M

April 16th, 2016 No comments
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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see my work being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.

The NBA has issued updated projections for the 2016-17 salary cap and luxury tax thresholds.

All 30 teams were informed this week via league memorandum that the 2016-17 salary cap is now projected to be $92 million, while the luxury tax threshold is projected at $111 million.

The numbers represent a substantial increase from the NBA’s initial projections for the 2016-17 season issued last July – which called for a salary cap of $89 million and tax threshold of $108 million – as well as a massive increase over the 2015-16 cap and tax of $70.0 million and $84.74 million, respectively.

The primary reason for the jump is the new national TV rights deals with ESPN/ABC and TNT, nine-year pacts worth a combined $24 billion which will pump in an incremental $1.1 billion of revenues next season.

National TV revenues, however, aren’t the league’s only source of revenue growth. Not by a long shot.

The updated cap figures suggest the league is now expecting revenue growth for the 2015-16 season from sources other than national TV rights to come in at more than 9 percent, when the figures are finalized in less than three months.

The huge increase in revenues, which comes on the heels of a huge increase last season as well (8.2 percent year-over-year growth), will come from a variety of sources.

Gate receipts, which grew by about $100 million in 2014-15, will spike again, along with related concessions and merchandise sales, thanks in large part to the Golden State Warriors’ record-breaking 73 win season and the retirement tour of the Los Angeles Lakers’ Kobe Bryant.

Commissioner Adam Silver has also landed several new sponsorship deals and extensions of existing arrangements at rates that far outpace their previous amounts.  Read more…

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NBA Owners Approve Advertising on Jerseys Starting in 2017-18

April 15th, 2016 No comments
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The NBA board of governors on Thursday approved a three-year pilot program to allow teams to sell advertising space on their jerseys. The program will begin with the 2017-18 season, and extend through the 2019-20 season.

Each team will be responsible for selling its own sponsorships. The sponsorships, in the form of patches that will measure approximately 2.5-inches by 2.5-inches, will be placed on the front left of game jerseys. Teams can now start engaging with potential advertisers, giving them enough lead time to secure contracts.

The value individual teams could hope to generate from such jersey ad sales could range widely, from perhaps as low as $1 million per year for small-market teams like the Memphis Grizzlies to more than $10 million per year for large-market teams like the New York Knicks and Los Angeles Lakers, which could equate to at least $150 million per year in total.

Individual teams will keep 50 percent of the ad money they generate, and contribute the remaining 50 percent to the revenue-sharing pool for the benefit of smaller-market, lower-revenue-generating teams.

The new revenue would be counted as basketball-related income in accordance with the terms of the 2011 Collective Bargaining Agreement and, therefore, split with the players. It would also, in turn, increase future salary cap levels.

Based upon the currently negotiated split of revenues, players would be in line to receive 51 percent of the new revenues, which equates to $77 million of a potential $150 million total.

Based on the current salary cap calculation methodology, the new revenues would increase future cap levels by at least $2.2 million (excluding any associated adjustments).   Read more…

Miami Heat Signs Guard Briante Weber to Three-Year Deal

April 10th, 2016 No comments
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The Miami Heat ultimately got its man.

The Heat signed Briante Weber to a three-year, $1.9 million minimum-salary contract on Sunday.

The contract will pay out a guaranteed $12,355 for the rest of the season. The second year, at $874,363, will initially be 25 percent guaranteed while the third year, at $1.0 million, will initially be non-guaranteed.

Miami leveraged a small portion of its remaining taxpayer mid-level exception to complete the long-term signing (in much the same way as it previously did with second-round draft pick Josh Richardson).

The Heat quickly identified Weber, a defensive-minded guard in the mold of former Heat guard Patrick Beverley, as an attractive prospect after he went undrafted in June because of reconstructive surgery following a devastating right knee injury in which he tore the ACL, MCL and meniscus in his right knee in January of last season at Virginia Commonwealth.

Despite going undrafted, Weber attracted interest from more than half the league. But he kept close ties with the Heat organization. In September, he failed a physical with the team prior to the start of its training camp. However, the Heat nonetheless signed him to a training camp contract on October 19, then waived him five days later so that it could direct him to its D-League affiliate.  Read more…

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