Dwyane Wade the Victim of Salary Cap Mistakes By His Agent and Team

July 18th, 2010 No comments

Miami Heat general manager Pat Riley and salary cap expert Andy Elisburg have been widely praised not only for their ability to recruit LeBron James, Chris Bosh and Mike Miller to join Dwyane Wade and Udonis Haslem in South Florida but also for their ability to structure their contracts to fit within the confines of a $58.044 million salary cap. Wade, however, has reason to be less than thrilled – with the Heat organization but, more importantly, with agent Henry Thomas.

Wade, James and Bosh were all eligible to receive maximum contracts with a starting salary of $16,568,908. However, in order to accommodate the contracts of Miller and Haslem, each graciously took less. The first year salaries in the contracts of James and Bosh have been finalized at $14,500,000, while the first year salary for Wade has been finalized at $14,200,000.

It remains unclear as to why Wade took a bigger discount than his Big Three cohorts. What is clear, however, is that it was unnecessary. The Heat had the ability to create the necessary room to allow Wade’s contract to match that of James and Bosh, with room to spare, without impacting the contract of any other player. The $300,000 discrepancy will wind up costing Wade $2,272,500 over the life of his deal.

Understanding how this would have been possible necessitates an understanding of certain league rules.  Read more…

Rockets to sign Brad Miller to three-year deal

July 17th, 2010 3 comments

Any visions of seeing Brad Miller in a Heat uniform next season are now official over. The Houston Rockets have come to terms with Miller on a three-year deal worth nearly $15 million.

Miller had been pursued by Atlanta, Boston, Chicago, Denver, Houston and Miami. But in the end, he chose to play with long-time favorite head coach Rick Adelman.

The 34-year-old did some of his best work in a Sacramento uniform with Adelman at the helm.

Said Miller:

It was too good of a deal to pass up. It’s my favorite coach I’ve ever played for. I know Kevin (Martin) real well from our Sacramento days. (Luis) Scola had a heckuva year. And I finally get to play with Yao (Ming) instead of guarding his big butt. The team is pretty solid.

Read more…

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Miami Heat makes Zydrunas Ilgauskas signing official

July 17th, 2010 4 comments

Big Z is surely excited about the chance to play for a title

For Pat Riley and the Miami Heat, the first priority of the summer was the big moves, and with headline names like LeBron James, Dwyane Wade, Chris Bosh, Mike Miler and Udonis Haslem they got it done.

It’s been all about big men since.

Zydrunas Ilgauskas has become the third center to sign with the Heat in less than 24 hours, completing a deal he agreed in principle to about five days earlier. On Friday, the Heat completed contracts with returning Miami veteran Joel Anthony and rookie draft pick Dexter Pittman. And Miami’s next move is expected to be the re-signing of another 7-footer, Jamaal Magloire.

That’s roughly 28 feet of centers in all, with the 7-foot-3 Ilgauskas standing taller than everyone else on Miami’s now-bursting, though questionable, depth chart at center. The Lithuanian — who was drafted by Cleveland in 1996 and has never suited up for any other N.B.A. club — is 12th among all active players with 1,269 blocks, and 21st among current players in rebounds with 5,904.

Saying he’s chasing a dream to win an N.B.A. title, Ilgauskas left a contract offer from the Cavs on the table to accept a two-year minimum salary contract that will pay him $1,352,181 and $1,399,507 for this season and next, respectively. The second year will be subject to a player option.  Read more…

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Everything is Done: How Did It All Happen?

July 17th, 2010 5 comments

The Miami Heat finished last season with 16 players under contract and a team salary far in excess of the salary cap. They then created enough salary cap room to sign everyone who is on the roster today. Now they are far in excess of the salary cap once again.

So how did it all happen? How did they manage to get so far below the salary cap and then above it again all in the same season? With creative financing!

Everything has now been finalized. It’s done. Here’s a step-by-step breakdown.

(Note: The actions below, in some cases, may be out of order. They have been structured so as to make evident the Heat’s thought process along the way, as well as to promote ease of reader comprehension. Full comprehension also requires an understanding of cap holds and roster charges, which are described in detail here.)

This is a snapshot of the Heat’s salary cap situation at the end of last season:

Read more…

Heat signs Joel Anthony and Dexter Pittman

July 16th, 2010 9 comments

One hour ago, the Miami Heat did not have a single center on its roster. Now it has two.

Joel Anthony and Dexter Pittman have each signed contracts.

Joel Anthony

Anthony, soon to be 28 years old, has accepted a five-year, $18.25 million deal.

He will add value to the organization as a defensive and shot-blocking specialist. But the deal is too rich, and far too long.

Anthony is a 6-foot, 9-inch power forward playing out of position at center against a league of giants due to extreme offensive deficiencies. He is perhaps the single worst offensive player in game today. His inability to catch the basketball invites double teams toward his more talented teammates. When he does catch it, he’s often utterly confused as to what to do with it. When he’s on the floor, the Heat effectively plays offense four-against-five.

Even more troubling is how shockingly poor he is at rebounding. He seems to lack both the instincts for finding the ball and the coordination to grab it when comes his way. Oftentimes, any value he creates on the defensive end is entirely offset by his inability to capitalize on it by grabbing a rebound.

If you’re a wildly undersized center who can’t play offense and can’t rebound the basketball, it’s difficult to justify a contract greater than the minimum salary.

Read more…

Matt Barnes to decide today

July 16th, 2010 18 comments

Orlando Magic forward Matt Barnes is close to finalizing a contract that could send him to South Florida for next season.

Barnes said yesterday that he’ll announce his decision at some point today.

He posted the following message to his Twitter account yesterday afternoon: “2maro is the day. I will let my fans know where I’m going to sign. Its gonna SURPRISE you!!!! Keep it locked.”

Barnes, 30, has played for seven teams during his seven-year career and was initially looking for a long-term deal after opting out of his contract with the Magic. He had stated publicly in recent weeks that his first preference would be to return to Orlando, but that is now a practical impossibility with Magic general manager Otis Smith’s decision to match Chicago’s 3-year, $19 million offer sheet to guard J.J. Reddick. Orlando’s team payroll now exceeds $90 million.

Boston and Miami are the presumed favorites for his services, with Dallas and the L.A. Lakers also in the mix. The Mavericks could offer Barnes up to a full mid-level exception contract; the Lakers could offer a contract starting at $1.8 million; the Celtics and Heat could offer minimum salary contracts.

The Heat could certainly utilize Barnes’ skill set. Barnes is a scrappy, experienced combo forward who has found a home in the NBA thanks to the aggressive mentality he brings to the floor. He is lockdown perimeter defender capable of manning the two, three and four positions. He’s also evolved into an underappreciated but effective scorer from in close, who could provide an alternative source of scoring for the second unit. While he has the reputation for being a three-point shooting threat, his conversion rate has never been spectacular. Last season, he shot just 31.9% from distance.

The addition of Barnes along with the possible signing of three-point specialist James Jones would shore up the team’s need for depth at the small forward spot, and allow Pat Riley to focus on areas of greater need.

Barnes averaged 8.8 points and 5.5 rebounds in 26 minutes of action for the Magic last season, starting 58 games.

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Erick Dampier to the Heat?

July 15th, 2010 12 comments

The Miami Heat currently has a grand total of zero centers under contract.

The team does have a commitment from the oversized Zydrunas Ilgauskas as well as a right-of-first-refusal on the undersized restricted free agent Joel Anthony, but either is hardly a definitive answer to the team’s needs at the position. And the free agent options are dwindling.

The Heat is one of five teams currently pursuing Bulls’ free agent Brad Miller, a list that also includes Atlanta, Boston, Chicago and Houston.

Miller appears to be fairly accommodating to the Heat’s financial situation. “I’m in a good situation and realistic about my worth. I’m not worried about having to chase money. I’ve had security for a long time,” Miller said. “I can go to the situation that’s best for me. A very big thing is location and the team.”

While his name has been mentioned as a possibility in South Florida over the past couple of weeks, if the Bulls make the right offer the veteran big man would probably take it. He loves the team, the team loves him, and the Bulls have the cap room to offer substantially bigger dollars that the two years and $2.5 million the Heat can shell out.

But there could be another, and potentially more intriguing, alternative for the Heat: Erick Dampier. Read more…

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Raja Bell signs $10 million deal with the Jazz

July 15th, 2010 3 comments

Raja Bell has agreed to a three-year deal with the Utah Jazz worth nearly $10 million.

Bell, who will turn 34 in September, played in only six games last season with the Bobcats and Warriors before undergoing surgery for a torn ligament in his left wrist. But he is a career 41.1% three-point shooter still capable of solid on-ball defense.

It was anticipated that he would play a big part on the Heat’s second unit next season.

Bell’s departure is certainly a loss. The Heat could use a floor-spacing shooter at the two guard spot, particularly someone also capable of playing strong perimeter defense. He is certainly aging and his athleticism is declining, but he nevertheless remains solid at what he does best. He figured to play significant minutes for the Heat as a potential as the only true reserve shooting guard on the roster behind Dwyane Wade.

The decision to join the Jazz is quite confounding in some respects.

Bell presumably wanted to play for a good team. With his track record, good teams certainly wanted him. That much is evident from the list of clubs after him, a list which reportedly included the Bulls, Heat, Lakers, Spurs, Trail Blazers and Jazz. If you’re 34 years old and looking to win your first championship before you hang it up, you can’t do much better than either the two-time defending champion Lakers or the future perennial favorite Heat. The Jazz doesn’t seem to offer the ten-year veteran an opportunity to win. Read more…

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What could have been, if only

July 14th, 2010 13 comments

Pat Riley had a plan. He executed upon it with deadly precision. He has put together what could very well be the best trio in NBA history. That’s the stuff of legends.

But even the legends make mistakes. And sometimes, they can prove costly.

Here are three bad decisions over the past nine months which never should have been made:

1. Picking up Daequan Cook’s Option.

It’s October 31, 2009. We are four days into the final season before the highly anticipated summer of 2010. Pat is deep within his strategy to maximize cap space, a strategy that had influenced nearly every decision he has made for nearly three years. He is now contemplating how to handle his latest two decisions – whether to pick up the 2010-11 options on Michael Beasley and Daequan Cook.

The choice on Beasley is obvious. Yes, he has been an underperformer. And yes, his $5.0 million salary would cut deeply into the Heat’s precious cap space. But Beasley has an undeniable trade value. He can always be moved in the offseason, if the need arises, in favor of the cap room. There’s simply no risk, therefore, in picking up the option. And if he goes on to have a breakout season, the range of possibilities for Riley in his attempt to build a championship roster in the offseason to come would increase exponentially.

The situation with Cook is completely different. Since winning the three-point shooting contest the year before, he has been completely non-existent. His career numbers are atrocious: 37.8 FG% and 36.7 3P FG%. His place in this league is tenuous at best. He will certainly never be a meaningful contributor for the Heat, not with Dwyane Wade ahead in the rotation. His option would count $2.2 million against the cap. He has negative trade value, so a mistake could prove costly. The choice is obvious, right? Wrong. In a decision that shocked everyone, even Cook himself, Riley chose to pick up his option – violating his own strategy to maximize cap space to make a run at three max contract free agents.

The Heat paid a steep price for the error. On June 23, Riley traded away the team’s 2010 first round draft pick — No.18 overall – to the Oklahoma City Thunder in order to rid himself of the Daequan Cook contract he had opted into just eight most earlier, and were returned the No. 32 pick in the second round.

The Thunder went on to trade Miami’s first round pick to the Clippers for a 2012 top-10 protected first round pick.

The Heat was apparently never destined to utilize its 2010 first round pick, choosing to conserve the cap space rather than seek out widely-recognized favorite for the pick Eric Bledsoe, who was available. And so, as it turns out, had Riley not picked up Cook’s option, he could have flipped the Heat’s No. 18 overall pick for a potential lottery pick in 2012. Or selected Bledsoe.

2. Not Trading Dorell Wright at the Trade Deadline.

It’s February 19, 2010. We’re less than five months away from the summer of 2010. Pat has another decision to make. The season is over in two months. It’s the trade deadline.

The Heat isn’t playing well. It doesn’t matter. It’s all about the offseason. The team is $2.8 million over the luxury tax threshold. Dorell Wright has a $2.9 million salary. Trading Dorell could save the Heat (i) the $1.2 million remaining to be paid on from his $2.9 million salary, (ii) a $2.8 million luxury tax bill, and (iii) an estimated $3.7 million luxury tax check distributed to all teams below the luxury tax threshold. That’s $7.7 million!

The Memphis Grizzlies reach out to the Heat. They are interested in acquiring Wright. They are offering a 2011 first round draft pick in return.

What do you do?

Dorell is the final year of his contract. He will become a free agent in the offseason no matter what decision Riley makes.

So… Is having Dorell Wright on the roster for the final 26 games of the season, for a team going nowhere while it awaits the offseason to come, worth $7.7 million and a first round draft pick?

Pat decided it was. Riley rejected the Grizzlies’ proposal. Memphis went on to acquire Ronnie Brewer from the Jazz in exchange for its 2011 first round pick.

The Heat was eliminated from the playoffs by the Celtics in the first round. Dorrell Wright is no longer part of the Heat’s future.

3. Sacrificing all those draft picks for LeBron James and Chris Bosh.

It’s July 10, 2010. The miracle has come true. LeBron James, Dwyane Wade and Chris Bosh have all agreed to play for the Miami Heat. It’s time for Heat fans to celebrate. But not for Riley. He has a decision to make. The Big Three have committed. Now they need to be signed.

For Wade, it’s easy. The Heat holds his Bird rights. Riley can sign him whenever he wants.

For James and Bosh, it’s not as easy. Riley has two alternatives to offer each player:

  • A six-year contract with an average salary of $18 million: this alternative requires that Riley pursue a sign-and-trade for each player, with the not altogether rational Cavalier and Raptors organizations
  • A five-year contract with an average salary of $18 million: this alternative can be executed immediately

James and Bosh are both perhaps the best in the game at the positions they play. They are both still young. James will be 30 and Bosh 31 at the end of five years, both still in their primes. As long as each could earn at least $19 million in a new contract in year six, the five-year contract is more beneficial from a financial perspective. And no matter what the new CBA to come looks like, each will undoubtedly command a salary far greater than that.

Of course, there is more to consider than just the salaries of James and Bosh. The first alternative, while less attractive to the duo, allows the Heat to add both Udonis Haslem and Mike Miller to the mix. The second alternative requires the Heat to add only Miller. And that’s unfortunate.

But James and Bosh would each be making more money. And the Heat would have six – yes, six! – more draft picks to deploy over the next seven years. Among the six would be four first round draft picks, including a first rounder from the Raptors which is lottery protected from 2011 to 2014 and completely unprotected in 2015 – making it a potential No. 1 overall pick from in 2015 NBA Draft.

That’s not a bad way to start the 2015 offseason — with the potential No. 1 overall pick in the draft a week after the contracts of James and Bosh expire!

So the question needs to be asked: Is Udonis Haslem truly worth four first round draft picks and two second round draft picks over the next seven years?

***

Why does it matter?

The Heat now finds itself in the following situation from a draft pick perspective (picks acquired from other teams in parenthesis):

2011: No first round picks; one second round pick (Minnesota)
2012:
 One first round pick; one second round pick (Memphis; Top 55 protected)
2013:
 No first round pick; one second round pick
2014
: One first round pick; two second round picks (Minnesota)
2015
: No first round pick; one second round pick

This is the situation the Heat could have found itself in had different decisions been made in the three scenarios presented above (picks acquired from other teams in parenthesis):

2011: Three first round picks (Memphis and Toronto lottery-protected through 2014); two second round picks (Minnesota)
2012:
 Two first round picks (LA Clippers); two second round picks (Memphis; Top 55 protected)
2013:
 One first round pick; one second round pick
2014
: One first round pick; two second round picks (Minnesota)
2015
: One first round pick; one second round pick

That’s Dwyane Wade, LeBron James, Chris Bosh, Mike Miller, eight first round draft picks, and eight second draft picks over the next five years.

If only!

Note: 
The math in regards to the contracts of LeBron James and Chris Bosh under a scenario where they were not signed-and-traded assumes the Heat would build out a contract for James, Bosh and Dwyane Wade that pay out identical average salaries over the first five years of their contracts (though Wade, because the Heat own his Bird rights, would be receiving a sixth year guarantee). 

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Reviewing the Miami Heat’s Forgone First Round Draft Picks

July 13th, 2010 No comments

In response to this post, people have been asking for more clarification about the rules regarding the draft. So I offer this post, which hopefully provides you the insight into what protections mean, clarifies the rules surrounding the trading of draft picks, and reviews what it all means for the Heat.

The Heat have traded away multiple first round draft picks in the sign-and-trade transactions that enabled them to acquire LeBron James and Chris Bosh. The years in which those picks will be conveyed are rather straightforward in practical terms. However, literally speaking, there are various rules and protections in place that make it impossible to determine with certainty.

The trading of N.B.A. draft picks is restricted by a series of intricate rules that have been put in place in order to protect teams that are trading away the picks from themselves. History suggests that teams need these protections so as not to unwittingly destroy their own franchises.

No one N.B.A. personality is more historically-renown and nationally infamous for his incompetency than Ted Stepien, former owner and de fact general manager of the Cleveland Cavaliers. In 1980, Stepien parlayed his minority stake in the Cavs into full control of the franchise. After purchasing the club, Stepien thought he could quickly assemble a competitive team, but he proved to be a horrendous judge of basketball talent. He spent ludicrously lavish sums of money on marginal players and made a series of controversial and, to outsiders, ludicrously one-sided player trades.

His first big move happened two months before his purchase of the team went through: He flipped backup guard Butch Lee and a 1982 first-round pick to the Los Angeles Lakers in exchange for backup forward Don Ford and a 1980 first-round pick (needless to say, not a great pick considering the Lakers were competing for titles). Two years later, Los Angeles picked future Hall-of-Famer James Worthy first overall with Cleveland’s pick.  Read more…

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