The NBA’s salary cap and luxury tax threshold aren’t expected to rise as much as the league initially projected, a development that could have significant implications for the Miami Heat.

Estimates that were provided by the league to NBA teams on May 31 have the salary cap rising to just $58.5 million and the tax threshold to just $71.6 million for the 2013-14 season, both slight increases from the current levels but considerably lower than what had been projected. The league had previously guided to $60 million and $73 million, respectively, at the beginning of the season. The numbers will be finalized only after the NBA does a full season audit during the first week in July.

The revised projections suggest that revenues for the 2012-13 season are falling short of expectations and, as a result, player salaries are correspondingly too high, triggering escrow adjustments to the following season’s salary cap and tax threshold.  Read more…

We’ve been through this before – a 30+ year-old Dwyane Wade sustaining injury, and thus being unable to perform at the highest of levels at the most critical of times. Last year, it caused perhaps the worst postseason of his career. This year, it is lowering even that standard.

Last time around, it was further structural damage to an already surgically repaired left knee, which required the joint to be drained of excess fluid in May and then an arthroscopic procedure to clean out the area in July. This time around, it’s a bone bruise in the right knee. Three, in fact.

The term “bone bruise” perhaps makes the injury seem less serious than it is. People often think of a bruise as a black-and-blue mark on the skin, which is often nothing more than a minor nuisance. But bones can also be bruised. In fact, bone bruises can be quite severe and extremely painful. They’re not all that uncommon in basketball circles. And the knee is particularly susceptible.  Read more…

There has been widespread speculation in NBA circles over the past year or so about the fate of the Miami Heat for next season and beyond. Articles that emphatically declare the inevitable financially-motivated implosion of Pat Riley’s brainchild have run rampant all across the internet universe.

The cost of doing business in the NBA has increased dramatically under the provisions of the new Collective Bargaining Agreement. The new rules are designed specifically to financially cripple high-spending teams like the Heat, in an attempt to promote competitive balance among all of the league’s 30 teams.

It’s working. Miami’s costs are soaring. But while predictions that call for the Big Three to be broken up to alleviate the hemorrhaging in the years to come are wildly premature and not very likely if things continue to run smoothly on the court, just how much Arison may be willing to spend to surround them depends largely on future luxury tax thresholds.  Read more…

The trade deadline has now passed. The waiver deadline for playoff eligibility has now passed.

The Miami Heat created a roster spot by trading away Dexter Pittman, at a cost of a second round draft pick and some cash, and nobody worthy of the spot has shaken free.

What should the Heat do?

Keep it. For now, anyway. Save some money. It is, after all, a nice insurance policy.

Then deploy it at the end of the regular season. Here’s why.

Both the Miami Heat and the Cleveland Cavaliers have reportedly had a strong interest in signing former Portland Trail Blazer center Greg Oden to a multi-year contract this season. The reason is clear. When healthy, Oden is a game-changing talent who, in his limited minutes thus far as an NBA pro, has made a serious impact down low. And while he’s never intended to play this season, a multi-year contract would have ensured either team his playing services for next season on a low-money contract.

How low?

The Heat’s only available multi-year offer would be a two-year minimum salary contract (i.e., the remainder of this season and next). The Cavaliers are still in position to use cap space to offer an up to four year contract staring at roughly $4 million.

Some in South Florida have been skeptical. Some believe the cost and the risk, when combined, are so great as to not justify the potential reward. But here’s the thing: there is no risk. None at all.  Read more…

The Heat has completed a minor trade with the Memphis Grizzlies at the Feb. 21 deadline that gives the team some financial relief.

Miami sent seldom-used center Dexter Pittman, its 2013 second round draft pick and cash considerations to the Grizzlies in exchange for the draft rights to power forward Ricky Sanchez. The Heat will also acquire an $854,389 trade exception in the deal.

Sanchez will likely never play in the NBA. He was originally drafted in the second round (35th overall) of the 2005 NBA Draft by the Portland Trail Blazers. The Puerto Rican native has since played professionally in the Continental Basketball Association (2005-06), the D-League (2006-08), Puerto Rico (2007-11), Venezuela (2009), Mexico (2009-11), Spain (2011-12) and Argentina (2012-13), where the 6’11”, 220-pound 25-year-old has averaged 12.2 points, 7.1 rebounds, 1.9 assists and 31.9 minutes while shooting 42.2% from the field in 28 games for Libertad de Sunchales this season. His draft rights have been traded four times. He was included because each team is required to send the other something in every trade.

The trade exception holds very little practical value for the Heat either. It will allow Miami to trade for a player(s) with a total salary of up to $954,389 (the value of the exception, plus $100K) without being required to send back matching salaries. It cannot be used to sign a free agent, it cannot be traded to another team, and it cannot be combined with another exception or player in order to trade for a more expensive player. By league rule, teams over the salary cap (as are the Heat) are allowed to acquire minimum salary players without regard to salary matching anyway.

The impetus of the trade for the Heat is the roster spot that it creates. Teams are required to carry no fewer than 13 players, but no more than 15 players, on their rosters during the season. The Heat roster now stands at 14.

The Heat will look to add a player, likely a big man, who is currently a free agent or who might become available via buyout by March 1.

In order for a current player to be eligible for another team’s playoff roster, he must be placed on waivers by 11:59 p.m. on March 1. The player does not have to be subsequently signed by March 1. He can be signed as late as for the final game of the regular season to be playoff eligible. And a player who has not appeared on an NBA roster this season can also be signed any time prior to a team’s final regular season game in order to be playoff eligible.

Possible buyout candidates who may be of interest to the Heat include Jermaine O’Neal of the Phoenix Suns, Samuel Dalembert of the Milwaukee Bucks, Chris Kaman of the Dallas Mavericks, and Timofey Mozgov of the Denver Nuggets.

There is some rationale to believe that each could be a buyout candidate, although none is likely to be. The Suns need the roster spot to accommodate the soon-to-be-acquired Marcus Morris, and O’Neal has reportedly been pushing for the chance to play for a contender in the dusk of his 17-year career. The Bucks have agreed to acquire center Gustavo Ayon as part of a multi-player trade involving J.J. Redick, which would add Ayon to a center rotation that includes incumbent starter Larry Sanders and the reportedly unhappy Dalembert. The Mavs are fading out of playoff contention and are dealing with a reportedly unhappy Kaman who, himself, is dealing with a concussion sustained more than three weeks ago. The Nuggets have been looking to deal the seldom-used Mozgov, though they would seemingly have little reason to buy him out; if they do, it’d be simply to do him a solid.

Pittman, who had been banished to the D-League for the bulk of the season and didn’t figure into the team’s future plans, could always have been waived in favor of the roster spot anyway. Therefore, in essence, this trade was actually all about the money. The Heat sent $281,446 in cash to the Grizzlies to cover the remaining portion of Pittman’s contract – the same payout as would have been required were Pittman to have been waived. However, the Heat is no longer on the hook for the $854,389 in luxury taxes his contract created.

The success of this trade, therefore, hinges on the value placed on the draft pick. In trading Pittman, the Heat is essentially saying that its 2013 second round draft pick is worth less than $854,389 in cash.

They’re probably right. If the season were to end today, the pick would wind up being No. 59 overall in next year’s draft. Depending on how the rest of the regular season plays out, it could reasonably increase only to as high as No. 57.

Generally speaking, players picked at these levels wind up never playing in the NBA, let alone become valuable enough to meaningfully contribute to a title contender.

There are some notable exceptions, however. Manu Ginobili was selected No. 57 overall in the 1999 NBA Draft. Second year point guard Isaiah Thomas was selected with the final pick in the 2011 NBA Draft. But such cases are rare.

And so the trade, unnecessary as it should have been, was probably a marginally good one — at least from the perspective of owner Micky Arison. To see that, think of it this way: Arison probably could not have otherwise sold the No. 59 pick in the 2013 NBA Draft for $854,389.

Of course, the Grizzlies got an even better deal. They had just 12 players on their roster. They needed to get to the NBA minimum of 13. So they took Pittman for free. It’s nothing more than a two-month tryout. If he doesn’t develop, the Grizzlies can waive him at no cost. If he exceeds expectations, Memphis maintains his full Bird rights as a restricted free agent this summer. Yet, smartly, they negotiated for a 2013 second round pick from the Heat as well, again, absolutely free of charge. Free player, free pick. Not a bad day’s work.

Some very big news was quietly made earlier this week.

Speaking on Tuesday at a Beyond Sports United event at Yankee Stadium, Commissioner David Stern estimated that league-wide revenue for the season would increase by about 20% from the last full season in 2010-11, to an all-time record $5 billion.

A year after the long and contentious collective bargaining agreement negotiations of 2011, during which the league claimed losses in the hundreds of millions of dollars and threatened “nuclear winter” if serious concessions weren’t made by its players, the NBA is apparently thriving.

Five billion dollars is a lot of money.

In fact, it’s significantly more money than the league was forecasting just a few months ago.

Since national TV revenue was already set, the league already knew about things like the Lakers’ and Celtics’ new multi-billion dollar local TV deals, and most other major revenue streams (such as ticket sales) have limited growth potential, it’s not entirely clear where all this unexpected growth is coming from. But it’s great news if you’re a Miami Heat fan.

The more revenue the league makes, the higher the salary cap and luxury tax threshold.

The cap and tax are calculated based on projected amounts of revenue (called “BRI”) and benefits for the upcoming season. The calculations take 44.74% and 53.51%, respectively, of this projected BRI, subtract projected benefits, and divide by the number of teams in the league. Adjustments are then made if, in the previous season, the players made less or substantially more in salaries and benefits than the split which was agreed to in the CBA.

The NBA was anticipating a projected BRI for the 2013-14 season of $4.48 billion as recently as July. That, in turn, produced an estimated salary cap of $60 million and an estimated luxury tax threshold of $73 million.

Things appear to have changed quite dramatically.

While it is not entirely clear to what extent Stern was rounding when he threw out the $5 billion number (or if he was even referring to BRI specifically), his reference to a 20% increase from 2010-11 levels still suggests a rather staggering $4.58 billion in BRI for the current season.

And if this season’s revenues are $4.58 billion, then next year’s revenue forecast would presumably be higher than that. At a modest 4% growth rate, the league’s initial growth rate target for next season, projected BRI for 2013-14 would then be set at roughly $4.76 billion. Two weeks into game action, revenue forecasts for next season appear to have increased by over $280 million!

If these BRI projections prove correct, the 2013-14 salary cap would jump to $64 million and the luxury tax threshold to $78 million.

That’s an unexpected $5 million boost to the tax level. That may not sound like much, but it’s massive when considering the league’s new progressive tax system kicks in next season. At the Heat’s current payroll level, such an increase amounts to tax savings for Heat owner Micky Arison of between $9 million and $13 million.

That’s money that could potentially be re-deployed. At this increased luxury tax level, and with some offseason maneuvering, the Heat could potentially utilize its mini-midlevel exception and still keep its total payroll (including salary, tax and amnesty obligations) below the $98 million level at which it is spending this season. That would be huge, particularly given that we started the season thinking this was the best the Heat was ever going to be, that the future was all about maintaining rather than retooling.

And things could get even better.

Remember that uniform advertising plan that was going to be implemented starting next season? Well, it’s reportedly dead. At least for now. Why? I wish I could say it’s because of the strong national movement opposing it. It is, after all, an awful idea. The real reason, though, has a familiar undercurrent to it: apparently the plan is dead because the owners couldn’t agree on how to share the profits.

But things could change. They could figure it out. And if they do, it could mean big incremental dollars. Deputy Commissioner Adam Silver said that the league as a whole could gain $100 million in additional revenue by selling small 2-inch-by-2-inch patches on the jerseys of each team. That’s a potential $2 million incremental increase to both the cap and the tax.

Is an $80 million luxury tax threshold likely for next season? No. But it’s possible.

Not bad for a league claiming to be in dire financial distress less than one year ago.

Dwight Howard didn’t get traded to Miami. Greg Oden probably isn’t going to play in 2012-13. Mehmet Okur appears destined to return to his native Turkey. And the Heat passed up the chance to wait out Samuel Dalembert.

The Heat still needs a center.

In the future lottery-protected first round pick acquired from Philadelphia, the Heat has an asset with which to try to address the issue in trade. The problem is that it’s the Heat’s only significant trade asset. The team can’t offer a first round pick of its own until 2017 at the earliest. And its second round picks are just about worthless.

The biggest issue, however, is that any potential trade requires the Heat to trade away matching contracts. And the contracts of thirtysomethings Mike Miller, Udonis Haslem and Joel Anthony – the team’s most likely trade candidates, players the Heat should be overjoyed to move free of charge simply for tax purposes – are all toxic; each likely holding negative trade value. Any value the Philly pick would have to a trade partner would be more than offset by the toxic Heat contract it would be required to take on for salary matching purposes. Why, then, would any trade partner offer anything of value in return?

A trade simply isn’t very likely.

And that means that if small-ball doesn’t work, the Heat will find itself in a bind.

Haslem is not ideally suited to play alongside Chris Bosh on the front line. Anthony’s limited offensive repertoire and lack of rebounding prowess create as many problems as his presence on defense solves.

Chris “Birdman” Andersen would make a wonderful addition to the Heat rotation as a shot-blocker, two-way rebounder and finisher at the rim, but he likely can’t shoulder the load of starter’s minutes. He’s a tremendous injection of energy from off the bench, but he plays himself to the point of fatigue. He is best in short bursts.

It’s time for the Heat to get a little creative. It’s time to take a risk.

It’s time to consider Andray Blatche.  Read more…

We’re NBA champions.

And we’ve gotten better. It’s a beautiful thing. This Miami Heat team is nearly perfect.

Nearly.

For the third straight season the Heat finds itself in need of a center — one who is both reasonably sized and knows how to rebound a basketball.

While we applaud head coach Erik Spoelstra’s decision to embrace a ‘position-less’ half court offensive philosophy that has Chris Bosh in that role, it is perhaps a less than ideal strategy over the course of a largely meaningless but still very grueling 82-game regular season.

And it’s a strategy not without its risks. Though the strategy (which essentially entails surrounding the Big Three with two wing players rather than a true center) has produced phenomenal results over the past two regular and post seasons, it has been tested over a grand total of just 568 minutes, the equivalent of fewer than 12 games. The Heat has gone all-in on an approach that is still very much unproven.

While ‘position-less’ might be a nice term to throw around, what it really boils down to is an accommodation for the team’s lack of size, and a lack of skill, at the five spot. The approach could prove costly against more physically imposing front lines.

Pat Riley has, at least for now, put his faith in seldom-used third year center Dexter Pittman to fill the void. Riley cemented his belief by choosing to guarantee Pittman’s contract for the upcoming season.

But Pittman isn’t the answer. Neither is Joel Anthony.

So we are left sifting through a slew of uninspiring alternatives.

Darko Milicic. Eddy Curry. Hamed Haddadi. Joel Przybilla. Joey Dorsey. Nazr Mohammed. Ronnie Turiaf. Tony Battie. Etc.

Not one is a difference maker.  Read more…

Since the start of the Big Three era, Pat Riley has scrounged the bottom of the free agent barrel and picked up a slew of uninspiring big men in an attempt to fill a perceived hole in his team’s rotation.

The sad list includes Eddy Curry, Erick Dampier, Jamaal Magloire, Joel Anthony, Mickell Gladness, and Zydrunas Ilgauskas. Even Udonis Haslem and Juwan Howard have been miscast in the role.

Not one has worked out nearly as well at center as Chris Bosh.

During its championship run, the Heat finally found a definitive solution to its problem at center: don’t play one at all. With Bosh starting at the 5, the Heat plowed through the Thunder en route to its first title of the Big Three era, as the unconventional lineups created mismatches on both ends of the floor.

Head coach Erik Spoelstra calls the approach ‘position-less’ basketball. The idea is to have as many versatile players on the court as possible, each capable of contributing to the offense and defending multiple positions. It’s a system predicated on floor spacing and ball movement. In many ways, the Heat is uniquely positioned to exploit such a strategy – few other teams can get away with playing multiple players out of position because they would get crushed on the boards. LeBron James and Dwyane Wade are probably the best rebounders at their positions in the league; this keeps the Heat in the battle.

The Heat believe they have found a permanent formula in their ‘position-less’ basketball scheme. And so today, on the first day free agents are allowed to sign, the Heat avoided the temptation to sign yet another uninspiring center. Instead, the team made official the signings of Ray Allen and Rashard Lewis! Read more…

Working in advance of the league’s October 31 deadline for such moves, Heat president Pat Riley picked up the 2010-11 rookie-scale option on the contract of first-round pick Daequan Cook late in 2009.

Eight months later, Riley changed his mind. Attempting to clear as much salary-cap space as possible for free agency, the Heat traded the underperforming Cook and the 18th overall pick in the 2010 NBA draft to the Oklahoma City Thunder. In exchange, the Heat received the No. 32 selection. That pick became Dexter Pittman.

Pittman signed a three-year minimum salary contract with the last of the Heat’s remaining cap space in July of 2010. The final year, for the upcoming 2012-13 season, was fully unguaranteed, becoming guaranteed if not waived before June 30, 2012. Earlier today, Riley confirmed that the Heat would let that deadline pass, thus guaranteeing his contract.

The decision to retain Pittman is certainly understandable. The Heat desperately needs size. Apart from Pittman, LeBron James is currently the heaviest player on the Heat. Only Chris Bosh and Joel Anthony are taller.

While the Heat implemented its small-ball philosophy with great success during its playoff run, a strategy that the Heat seem destined to employ for the whole of next season, don’t kid yourself. It’s a strategy borne more out of necessity than desire.

But Pittman, who has played a total of 320 big-league minutes over the course of his two seasons in the league, is hardly a definitive answer at center. Any flashes of low-post skill he has displayed have thus far been more than offset by his propensity to foul (sometimes violently).

Therefore, while the decision to retain him may be understandable, the manner in which Riley chose to do so was certainly not. One must question what prompted Riley to offer a guarantee to a player who seemingly didn’t require one. He could have, and should have, waived the wide-bodied center prior to the June 30 deadline, and thereafter re-signed him to a make-good, training camp contract. Of course, the risk with such an approach is that some other team might make Pittman a better offer. But let’s be realistic. A better offer wasn’t coming.

Riley has done this before. In July of 2010, 2009 second round pick Patrick Beverley was offered a questionable (or, frankly, inexplicable) two-year fully guaranteed contract – making him the only player in the league to try out for the team that drafted him, fail to make the team, and then be offered a multi-season guaranteed contract the season after. Despite the guarantee, Beverley was waived one day prior to the start of the regular season. Total unnecessary cost incurred: $2.1 million (including the tax).

Unlike Beverley, however, Pittman’s spot on the roster is all but guaranteed. The cash-strapped Heat can no longer afford to repeat its sins of the past and eat guaranteed salary. It’s simply too expensive. Letting Pittman go would add an additional $1.7 million to a payroll already projected to approach $100 million, the highest in franchise history by a wide margin. The Heat is, for better or worse, invested in Pittman’s continued development.

Said Riley: “We expect improvement. Big guys, when you draft them late or in the second round, it’s a two- or three-year project. He’s going into his third year. We are going to give him a great shot and we expect this year he might be able to really contribute to us.”

The Heat now has eleven players under guaranteed contract for 2012-13. By league rules, the team must employ at least thirteen, but no more than fifteen, on its regular season roster. It can carry as many as twenty during the offseason.