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Heat Trade Mario Chalmers to the Memphis Grizzlies

November 10th, 2015 No comments
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The Miami Heat announced Tuesday night that it has traded veteran guard Mario Chalmers to the Memphis Grizzlies.

The Heat, in a four-player swap, sent Chalmers and forward James Ennis to the Grizzlies in exchange for guard Beno Udrih and forward Jarnell Stokes.

The financially-motivated trade will save the Heat a projected $7.8 million.

The Heat had a team salary of $92.4 million coming in the trade, which put it $7.8 million over the NBA’s $84.74 million luxury tax threshold. Exceeding the tax threshold could prove very costly for the Heat.

If the Heat exceeds the tax threshold, it would become the NBA’s first team to ever pay the “repeater tax,” which adds an extra $1 for every dollar by which a team is over the luxury tax threshold, over and above the incremental tax rates that would apply.

For every dollar by which the Heat exceeds the tax level this season, it will need to pay at least $2.50 in taxes. That rate increases to $2.75 per dollar for any incremental amount by which the Heat exceeds the tax by $5 million, increasing further to $3.50 per dollar for any incremental amount by which the Heat exceeds the tax by $10 million, increasing further to $4.25 per dollar for any incremental by which the Heat exceeds the tax by $15 million, and increasing an additional $0.50 for each $5 million increment thereafter.

The final tax tally is calculated based upon the Heat’s team salary as of the start of its last regular season game, which prompted months of speculation that Pat Riley would attempt to shed Chalmers’ $4.3 million salary to reduce the team’s burden. Chalmers was reportedly made available in trade throughout the summer, with the Heat asking for essentially nothing in return.  Read more…

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Heat and Grizzlies Discuss Potential Mario Chalmers Trade

November 3rd, 2015 No comments
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ESPN reported earlier today that the Miami Heat has had discussions with the Memphis Grizzlies regarding point guard Mario Chalmers.

The Heat currently has a team salary of $92.4 million, which puts it $7.8 million over the NBA’s $84.74 million luxury tax threshold. Exceeding the tax threshold could prove very costly for the Heat.

If the Heat exceeds the tax threshold, it would become the NBA’s first team to ever pay the “repeater tax,” which adds an extra $1 for every dollar by which a team is over the luxury tax threshold, over and above the incremental tax rates that would apply.

For every dollar by which the Heat exceeds the tax level this season, it will need to pay at least $2.50 in taxes. That rate increases to $2.75 per dollar for any incremental amount by which the Heat exceeds the tax by $5 million, increasing further to $3.50 per dollar for any incremental amount by which the Heat exceeds the tax by $10 million, increasing further to $4.25 per dollar for any incremental by which the Heat exceeds the tax by $15 million, and increasing an additional $0.50 for each $5 million increment thereafter.

At $7.8 million above the tax line, the Heat is facing a projected tax bill of $20.1 million.

Adding that potential $20.1 million to the $92.4 million in salary obligations to the team’s current players, as well as the $2.7 million in cash the Heat has already surrendered in trade and the $216K it has already paid to the departed Shabazz Napier, yields total projected payroll and related obligations of $115 million.

The most the Heat has ever paid was $103 million in 2013-14.

The final tax tally is calculated based upon the Heat’s team salary as of the start of its last regular season game, which has prompted months of speculation that Pat Riley would attempt to shed Chalmers’ $4.3 million salary to reduce the team’s burden.

The Grizzlies, however, are operating above the NBA’s $70.0 million salary cap and do not have a large enough exception to take on Chalmers’ salary without sending back salary to the Heat.  Read more…

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Miami Heat Enter 2015-16 Season As Most Enigmatic Teama in the NBA

October 26th, 2015 No comments
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The Miami Heat may well be the most enigmatic team in the league, as we head into the 2015-16 NBA season.

It is difficult to tell whether Pat Riley is building something special, or relegating his team to the atrocity of mediocrity. The current Heat incarnation is both supremely talented and deeply flawed. It is as promising as it is susceptible to the cruelties of age, injury, poor spacing and poor shooting. It has within it the potential to challenge the Cavaliers for Eastern Conference supremacy and the combustibility to ignite a second straight pre-playoff collapse.

Riley has tossed away multiple first-round draft picks in its effort to chase down LeBron in Cleveland, much like he did to snag him and Chris Bosh five years ago. Only this time around, there is no underlying guarantee that it is going to work.

It is as possible that the Heat has mortgaged its future to build an unremarkable team that will die a slow death as it is that the Heat is in the midst of spectacular turnaround that could vault the team into the realm of the game’s elite. Where within that range the Heat will fare is not yet clear.

Read more…

Cavaliers, Tristan Thompson $14 Million Apart in Contract Talks

September 9th, 2015 2 comments
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Update #2 (10/21/15): Tristan Thompson has agreed to sign a five-year, $82 million contract with the Cleveland Cavaliers. The contract will start at $14.3 million, taking the team’s salary obligations to $109.6 million (including the $428K trade bonus payout to Mike Miller) its projected tax bill to $61.6 million, and its total payroll obligations to $171.2 million for the 14 players it has under guaranteed contract.

That figure would represent the second highest total in NBA history, behind the 2013-14 Brooklyn Nets. The Nets spent $107.7 million on salaries (including it amnesty obligations and incorporating payments made to traded players) and $90.5 million on taxes that season, taking its total payroll obligations to $198.2 million (before accounting for the $2.5 million they received back from the league’s escrow fund).   Read more…

Josh Richardson Signs Three-Year Contract with the Miami Heat

August 3rd, 2015 1 comment
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Josh Richardson, who impressed during summer league, officially signed a three-year, $2.4 million minimum salary contract with the Miami Heat on Monday.

The parties had reached agreement on the general terms of the deal last Tuesday, but needed the extra few days to iron out a few details with regard to the third year of the contract.

The parties had reached agreement on the general terms of the deal last Tuesday, but needed the extra few days to iron out a few details with regard to the third year of the contract.

Richardson will make a fully guaranteed $525,093 this season. The second year, worth $874,636, will be non-guaranteed if he is waived before August 1, 2016 but fully guaranteed thereafter. The third year, worth $1,014,746, will be non-guaranteed if he waived before June 30, 2017 but fully guaranteed thereafter.

The three-year term will require the Heat to utilize a portion of its $3.376 million taxpayer midlevel exception (the most that could be offered utilizing the minimum salary exception is two years). The Heat will now have $2.85 million remaining on that exception.  Read more…

Miami Heat Trades Zoran Dragic to Boston Celtics

July 27th, 2015 No comments
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The Miami Heat has traded shooting guard Zoran Dragic to the Boston Celtics, along with $1.6 million in cash to cover his salary with a $100K profit(1) and the Heat’s second-round draft pick in 2020. In return, the Heat will receive a top-55 protected second-round pick from the Celtics in the 2019 NBA draft.

The agreement comes a day after the Heat reached an agreement to trade point guard Shabazz Napier to the Orlando Magic. The Heat traded Napier to the Magic along with $1.1 million in cash in exchange for a top-55 protected second-round pick in 2016.

The second-round picks being returned to the Heat essentially have no value. The Magic and Celtics would need to have one of the five best records in the entire NBA in 2015-16 and 2018-19, respectively, for the Heat to get them. Otherwise, the obligations are extinguished.

The Heat also receives trade exceptions equal to the salary of each player: $1.7 million for Dragic(2), and $1.3 million for Napier. Miami has up to one year to utilize each exception, which can be used to acquire player(s) making up to value of the exception plus $100K in trade or on waivers without sending back salaries in return. The exceptions cannot be combined.  Read more…

Miami Heat Trade Shabazz Napier to Orlando Magic

July 26th, 2015 8 comments
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The Miami Heat has agreed to trade point guard Shabazz Napier and $1.08 million in cash to cover his base salary(1) to the Orlando Magic in exchange for a top-55 protected second-round pick in the 2016 NBA draft. The deal will be formally announced on Monday.

The second-round pick being returned to the Heat in exchange for Napier essentially has no value. The Magic would need to have one of the five best records in the entire NBA in 2015-16 for the Heat to get it. Otherwise, the obligation is extinguished.

The Heat will also receive a $1.29 million trade exception as part of the trade, equal to the amount of Napier’s total salary. The Heat will have up to one year to utilize the exception, which would allow the team to acquire one or more players with total salaries of $1.39 million in trade (or on the waiver wire) without sending back any salaries in return.

That, by all accounts, is a terrible return on investment for the No. 24 pick from the 2014 NBA draft. It means the Heat essentially traded its 2014 first round pick (No. 26), its 2014 second-round pick (No. 55), its 2019 second-round pick and $1 million in cash in exchange for one season of Napier.

Worse still: Napier showed flashes of promise during his rookie season; he was a low-cost player set to make just $1.3 million this season; and the Heat had him under team control for at least the next three years, after which he was to become a restricted free agent.

Why, then, have the Heat agreed to pull the trigger on the trade?  Read more…

Analyzing the Miami Heat’s Approach with Josh Richardson

July 17th, 2015 No comments
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Update (July 28, 2015): Josh Richardson reportedly agreed to a three-year, $2.4 million minimum salary contract with the Miami Heat on Tuesday. Richardson will make a fully guaranteed $525,093 this season. The second year, worth $874,636, will reportedly be partially guaranteed. The third year, worth $1,014,746, will reportedly be subject to a team option. 

The team option would provide the Heat the additional flexibility described below but, given the partial guarantee on the second year, the overall structure of the contract as presently constructed might not be optimal. If the second year is partially guaranteed and the third is subject to a team option, the third year must have the same guarantee percentages and schedule. By removing the team option, the guarantee dates and percentages for each of the last two years can differ (which, depending upon how the contract is structured, could help either party). Look for Richardson and the Heat to consider this and possibly change the structure before executing the contract. 

The Miami Heat has very much liked what it has seen thus far from Josh Richardson during summer league.

The Heat selected Richardson with the 40th overall pick in 2015 NBA draft, but the versatility and defensive prowess he displayed during summer league in many ways reflects the first-round grade placed upon him by general manager Pat Riley. Richardson was 24th overall on the team’s draft board.

So why has Riley yet to approach Richardson about a contract?

Well… The roster is still in flux. And as long as that holds true, there is no pressing need for Riley to do so… yet.

When a player is selected in the second round of the draft, he remains the exclusive property of the team that selected him until at least the September 5th immediately following the draft.

At that point, the team needs to make a decision.

In order for the team to retain draft rights to the player, it must submit to him a “Required Tender” by September 5th. The tender is an offer of a contract that affords the player until at least the immediately following October 15 to accept, has a term of one season, calls for at least the minimum salary applicable to the player, and can be fully non-guaranteed.

If the team does not issue a tender by September 5, the drafting team loses its exclusive rights to the player, and the player becomes an unrestricted free agent the following day.

The Heat really likes Richardson, and will not let that happen.

Once (or before) the tender is issued, the player has three primary options: (i) forgo the tender and instead negotiate with the team for a different contract, (ii) forgo the tender and instead seek employment outside the NBA, or (iii) accept the tender and play under its terms for the season to come.  Read more…

Miami Heat Signs Gerald Green

July 9th, 2015 No comments
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The foundation of the Miami Heat’s future championship aspirations rests largely on the shoulders of point guard Goran Dragic and center Hassan Whiteside.

Dragic loves to attack the basket. He’s an aggressive guard who keeps defenders backpedalling as he slashes to the rim. He has excellent body control and does a tremendous job of slipping past defenders and finishing through contact. He is the only guard in the NBA to have shot better than 50 percent from the field in each of the last two seasons. If the defense collapses to stop him, he can hit he is his roll-man on the pick-and-roll or a big man down low and is even more likely to hit his corner three-point shooters.

Whiteside has become the poster child of a fan base seeking out hope for the future. He has rewarded us all with boundless energy, youthful exuberance, and quick ascent. In his limited time last season, Whiteside rampaged through the NBA with reckless abandon, utilizing his massive 7-foot-7-inch wingspan to throw down monstrous alley-oop dunks, snatch rebounds out of the sky from high above the rim, swat basketballs as Godzilla would planes, and generally wreak havoc on both ends of the floor. His potential in the pick-and-roll and on the glass is undeniable. But his skills extend far beyond that. His low-post game is still developing, and has the potential in time to make him one of the elite low-post scorers in the whole of the NBA.

Dragic and Whiteside figure to become focal points of the Heat offense for years to come. They figure to be highly successful in plying their trade, but only if they have the floor space with which to do so. Whiteside needs it to maneuver freely down low. Dragic needs it to create clear driving lanes for himself and open looks for others.

Floor-spacing is a critical determinant of success in today’s NBA. The best teams have it. The not so good ones don’t.

Take a look at the two best teams in each conference from last season. In the west, the Golden State Warriors may have the best three-point shooting backcourt in NBA history. The San Antonio Spurs may have the best floor spacing in NBA history. In the east, the Cleveland Cavaliers always have at least three three-point shooters hovering around LeBron James. And the Atlanta Hawks typically have four or even five such shooters on the court.

Those four teams: each among the top five in three-point shooting last season. The Heat? 24th!

The Heat need players who can knock down open outside shots when Dragic and Whiteside collapse the defense. Chris Bosh is an ideal fit in such an approach. But Luol Deng isn’t. And neither is Dwyane Wade.

For as talented as a Dragic-Wade-Deng-Bosh-Whiteside starting rotation might appear, it is not all that difficult to imagine why they might struggle.

There’s an arms race growing across the NBA and, as the Heat discovered last season, those who do not join in a three-point shooting barrage will fall behind. A step behind due to a sheer lack of talent for the skill and perhaps a mile behind philosophically, the Heat has yet to adapt.

The Heat did not have a single real, proven three-point shooter on the entire roster. Until now.

The Heat today announced the signing of legitimate three-point shooting threat Gerald Green to a one-year, $1.4 million minimum salary contract.

Read more…

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Miami Heat of the Future Beginning to Take Shape

July 9th, 2015 No comments
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I have a request. I write posts which I believe are unique, more in depth and more insightful than I can otherwise find elsewhere. I hope you agree. I therefore ask that you please not simply copy my ideas without proper sourcing. 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. 

The NBA announced on Wednesday that the salary cap for the 2015-16 season has increased by 11.0 percent to an all-time high of $70 million. The tax level for the 2015-16 season has increased by 10.3 percent to an all-time high $84.74 million.

These are substantial increases from the league’s previous projections issued just last April – $67.1 million for the salary cap, $81.6 million for the tax level – predicated on the basis of exploding revenues.

What does this mean for the Miami Heat? In terms of flexibility, not a whole lot.

But it does mean huge savings for owner Micky Arison.

The Heat will likely be a taxpayer next season. And that will carry with it severe consequences.

If the Heat exceeds the tax threshold, it would become the NBA’s first team to ever pay the “repeater tax,” which adds an extra $1 for every dollar a team is over the luxury tax threshold, over and above the incremental tax rates that would apply. The repeater tax is triggered when a team has paid the tax in four of the previous five seasons. The Heat has paid the tax in three of the last four years.

For every dollar by which the Heat exceeds the tax level next season, it will need to pay at least $2.50 in taxes. That rate increases to $2.75 per dollar for any incremental amount by which the Heat exceeds the tax by $5 million, increasing further to $3.50 per dollar for any incremental amount by which the Heat exceeds the tax by $10 million, increasing further to $4.25 per dollar for any incremental by which the Heat exceeds the tax by $15 million, and increasing an additional $0.50 for each $5 million increment thereafter.

The Heat entered the summer with two primary, and in many ways conflicting, objectives: Field a competitive yet cost effective team for the 2015-16 season, and maximize cap space for a 2016-17 season during which the salary cap is expected to explode higher on the strength of a new national TV rights deal.

The measure of success in those objectives was to be predicated on the Heat’s dealings with three men: Luol Deng, Goran Dragic, and Dwyane Wade.  Read more…