The Anatomy of a Spectacular Miami Heat Failure

June 15th, 2014 4 comments

The Miami Heat’s bid for basketball immortality – four straight NBA Finals appearances and three straight NBA titles, a feat which has only been accomplished once in league history – has fallen spectacularly short. In the wake of this colossal failure, we’re all left wondering how it all went so wrong so quickly – how our team ended up looking so old, so slow, so flawed, so unable to adapt, so unable to defend.

Is it an organizational philosophy that failed us?

“I don’t think you win championships with young, athletic players that don’t have experience. I think we’ve learned over the years that building with young players is very frustrating.”

That was Pat Riley in June 2011, describing his aversion to developing youthful talent.

It is a philosophy that he has expressed many different times in many different ways over the years. It is a philosophy that has permeated his every decision in preparation for and during the Big Three era. It is a philosophy upon which the Stepien-like decisions to surrender a whopping six future first round draft picks in a period of less than five months from February to July 2010 were predicated. It is a philosophy upon which the decision to constantly fill the roster with post-dated bench-warming veterans was predicated.

It was a philosophy which, initially, didn’t bother us. We were all so captivated by the moment. Riley had a plan. He executed upon it with deadly precision. He got the big things so right that it didn’t matter how he handled the little things. In Riley we trusted.

The winning that followed only validated that ideology.

But, quietly, things weren’t as wonderful as they appeared. In the wake of the signings of Dwyane Wade, LeBron James and Chris Bosh in the summer of the 2010, the front office lost sight of its need to build for the future. Everything was always only about the moment.

Some of us couldn’t help but wonder. If your mission is to win as many titles as possible while the Big Three are still in their primes, then wouldn’t you like to have some upside around? Some players who will be getting better with time? Some players who can keep the energy level high when the stars need to rest?

Riley has always had a clear affinity for the seasoned veteran versus the inexperienced rookie. He’d rather have the sure thing than the potential next big thing. But as much as these veterans are low risks to make stupid, rookie-type decisions, none will break free off the dribble in crunch time or make that key defensive stop and then sprint up the floor for a breakaway jam – they’re zero risks to become more athletic, to develop new parts of their games, or to be usable as trade bait should the need arise.  Read more…

Could the Miami Heat afford Carmelo Anthony, Big Four?

June 12th, 2014 3 comments

Now that the New York Knicks have both a president and a head coach with championship pedigrees, one would think there should be no problem luring championship caliber players to a city that’s been starving for a title since 1973. But any visions of grandeur in the Big Apple, at least in the near future, are predicated on the upcoming decision of their star, Carmelo Anthony.

There has been widespread speculation about a lack of desire for the 30-year-old to remain in what would surely be a rebuilding process in New York under the new regime headed by Phil Jackson, with neophyte coach Derek Fisher this week added to the mix. Anthony has the right to become a free agent this summer, or he could remain with the Knicks for another season before his contract expires.

Numerous reports have linked Anthony to the possibility of joining LeBron James in Miami, with the Heat’s James, Dwyane Wade and Chris Bosh all in position to terminate their contracts by the end of the month as well. That flexibility could position the Heat to potentially create salary-cap space to add Anthony to the mix.

The success of the Heat’s 2010 free-agent bonanza has established them as one of the NBA’s destination franchises, with owner Micky Arison empowering big-thinking team president Pat Riley to attempt to pull off another coup despite the limitations of the new and more restrictive collective bargaining agreement.

Discussions have reportedly begun within the Heat organization about trying to grow their so-called Big Three into a Big Four. Heat officials have already started to explore their options for creating sufficient financial flexibility to make an ambitious run at adding the Knicks’ scoring machine this summer in free agency.

Can Pat Riley pull this off again? Is it even possible?  Read more…

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The Changing Landscape of the NBA

May 11th, 2014 6 comments

The NBA is thriving!

Just three years removed from a time when we were all seduced by claims of poverty from owners facing supposed losses that were mounting so quickly and so heavily that they forced a nasty lockout that nearly cost us the entire 2011-12 NBA season, we’ve entered into a period of unprecedented success for a league which has never been stronger.

Profits are soaring.

Just about every team in the NBA that wants to be profitable can now be profitable, and without taking drastic Jeffrey-Loria-like actions that adversely affect their fan bases in doing so (here’s to you, Miguel Cabrera!).(1) Teams aren’t just profitable; they’re wildly profitable. The league as a whole projects to generate roughly $300 million in basketball profit this year. More than half of the league’s teams should produce eight-figure profits. One or two could touch $100 million!

Rising profitability means rising team valuations.

Just last year, the Maloof family sold a 65% stake in the Sacramento Kings along with Sleep Train Arena to a group led by tech entrepreneur Vivek Ranadive at an all-time record valuation of $534 million, despite the team playing in one of the league’s smallest markets. And that was after owners blocked the Maloofs’ agreement with investor Chris Hansen to buy and relocate the Kings to Seattle at a total franchise valuation of $625 million.

That all-time record valuation was eclipsed earlier this month, when Herb Kohl sold the Milwaukee Bucks, widely considering the least valuable team in the league, to hedge-fund billionaires Wesley Edens and Marc Lasry for $550 million (without an accompanying arena), a price which would likely have been significantly higher had Kohl, who paid just $18 million for the team in 1985, not required as a condition to the sale that the team remain in the city and with the fans of Milwaukee. It was a stunning amount for the Bucks, who are universally regarded as having the worst financial situation of any NBA team. And yet, Dallas Mavericks owner Mark Cuban called the purchase price a bargain, suggesting that even the least valuable NBA franchises are truly worth more than $1 billion.

That newly-minted all-time record valuation is about to get shattered. The impending forced sale of the Los Angeles Clippers, who play in the second largest market in the NBA, is about to multiply the current record times four! Former Microsoft executive Steve Ballmer has agreed to buy the team for a whopping $2 billion! That’s the second highest price ever paid for any professional sports franchise. The Dodgers baseball team, also of Los Angeles, were sold to the Guggenheim Group for $2.15 billion in 2012, but that price included land, parking lots and TV deals. The only real estate involved in the Clippers deal is for their training facility in Playa Vista. So, not a bad return on a $12.5 million investment by Donald Sterling in 1981. The deal has been submitted to the league for final approval.

Why the massive change?  Read more…

The Cost of All Those Traded Draft Picks Becoming Clearer for Miami Heat

April 20th, 2014 4 comments

In the summer of 2010, the Miami Heat changed the course of team and league history. As a result of two trade calls held with the NBA league office in less than an hour on July 10, the Heat completed sign-and-trade transactions with both the Cleveland Cavaliers and Toronto Raptors, acquiring LeBron James and Chris Bosh in the process.

James and Bosh were to be paired with Heat incumbent free agent Dwyane Wade as the launching point for what would ultimately become the Big Three era. In the three subsequent seasons, the Heat have gone on to reach the NBA Finals all three times, winning the NBA championship twice. Their pursuit of a third consecutive title begins tonight.

Amidst the jubilation of the day, some questioned the manner in which Heat president Pat Riley chose to acquire his two new players. The Heat had the necessary cap room at the time to sign them outright. Why, then, pursue the trade?

Both players were eligible for maximum salaries of $16.6 million in the first year of any new contract signed, whether it was with their prior teams, with the Heat, or with anyone else. But while the starting salary was to be the same no matter where they signed, the NBA’s Collective Bargaining Agreement gives the home team a financial advantage when it comes to re-signing its own players. Both players’ home teams were eligible to offer their respective player one more year (six instead of five) and bigger annual raises (10.5% instead of 8%). That translated to a maximum potential offer of $125.5 million over six years, versus the $96.1 million over five years that the Heat could offer.

James and Bosh utilized the structure not to make the increased money, but rather to mitigate the impact of taking less. They leveraged the sign-and-trade structure to take a reduced starting salary of $14.5 million – $2.1 million less than the maximum – in order to accommodate the contracts of Mike Miller and Udonis Haslem. (Wade, too, did the same).

Each structured the longer six year deal with the higher 10.5% maximum raises, but with the lower starting salary. The contracts paid out $109.8 million over the six years, roughly $15.5 million less than they otherwise could have made had they accepted full max deals.

The sign-and-trade structure, however, came at a cost for Miami.  Read more…

Salary Cap and Luxury Tax Projections for 2014-15 Keep Rising

April 19th, 2014 2 comments

The NBA has issued new projections for the 2014-15 and 2015-16 salary cap and luxury tax thresholds. All 30 teams were informed this week via league memorandum that the 2014-15 cap and tax threshold are now projected to be $63.2 million and $77.0 million, respectively. The numbers for 2015-16 are now projected to be $66.5 million and $81.0 million, respectively.

It should be noted that these are non-binding forecasts that have been circulated more than months before the official salary cap and luxury-tax threshold for the 2014-15 season are announced in early July, following a league-wide audit (that’s what July Moratorium is for). As part of the audit, accountants jointly appointed by the NBA and the player’s association finalize the total revenue haul during the past season and, on that basis, project the revenues for the upcoming year.

They then take 44.74% of that projected amount, subtract projected benefits, and divide by 30 (the number of teams in the league) to get the salary cap for the season ahead. Adjustments are then made to the cap if players received way too much (or way too little) in salaries and benefits for the then prior season relative to the finalized revenue figure; this serves as a mechanism to maintain the integrity of the agreed-to revenue spit between owners and players. The luxury tax uses a similar formula, but is based on 53.51% of projected revenues.

The salary cap and luxury tax values for the current season are $58.679 million and $71.748 million, respectively, which means the new cap projection for next season represents a 7.75% increase over this season. This is a pretty big jump — the league’s baseline assumption for year-to-year increases is 4.5%.  Read more…

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Miami Heat Sets New Team Record for Player Payroll

April 18th, 2014 No comments

If the Miami Heat haven’t exactly lived up to expectations thus far this season, it isn’t because of their spending.

Despite making some unpopular moves last summer – utilizing the amnesty provision to waive Mike Miller, declining to utilize the mid-level exception – the Heat spent more on player payroll this season than in any other season in team history.

The Heat ended the regular season with a team salary of $80.6 million – which, perhaps surprisingly, amounts to $2.8 million less than last season’s record total.

But team salary isn’t an accurate depiction of a team’s actual spending on player payroll and related costs. There are several adjustments that need to be taken into account.

First, team salary doesn’t factor in mid-season trades. For example, if a team trades a player midway through the season, his salary comes off team salary entirely, even though salary payments will have already been made. Joel Anthony and Roger Mason, Jr. were each traded during the season. Prior to their trades, they had received a combined $2.4 million in salary payments from the Heat. Conversely, the Heat received Toney Douglas in trade midway through the season. Though his $1.6 million salary appears on the Heat’s team salary, the Heat itself was only responsible for $856K of that total. Adjusting appropriately for these trades, then, takes the team’s payroll to $82.2 million.  Read more…

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LeBron James Completes Historic NBA Shooting Season

April 17th, 2014 No comments

The dominant play of LeBron James has been one of the most compelling aspects of the NBA since his entrance into the league eleven years ago, but lately the experience of watching the world’s best basketball player has taken on an entirely new significance. Outrageously efficient shooting has become so predictable for James that every appearance has become appointment viewing.

For those of us who have had the pleasure of watching James so freely master his profession, his play in recent years has been a breathtaking experience. Yet for those players unlucky enough to line up opposite James, his performance must be infuriating. Every touch brings its own terrifying potential, as James approaches his on-court goals with an authoritative certainty. He wants to get to the hoop off the dribble for an easy score, and so he does – without much concern at all for defenses, physical limitations or other factors that inevitably steer the play of basketball mortals.

Every trip down the floor serves as a reminder that LeBron James simply cannot be stopped, and when he’s executing at this high a level, he can’t even be slowed. He is perhaps the most dominant player in NBA history.

Which makes his other exploits on the court all the more remarkable. When one reaches such a level of on-court brilliance, said player tends to develop an arrogance about his play — a me-first attitude that negates the potential contributions of others. Not James. Despite being constantly vilified in the media for his deference, James continues to be perhaps the most selfless superstar in NBA history.

In NBA history, the list of players to average at least 25 points and 6 assists while shooting at least 54% from the field in a season is as follows:

LeBron James.

No other playmaker has ever had a scoring season as potent, and no premier scorer has ever had a season with such productive passing as James. And James hasn’t just done it once; he’s done it twice in a row. And he didn’t just eclipse those numbers; he shattered them!  Read more…

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Dwyane Wade Completes Historic NBA Shooting Season

April 16th, 2014 No comments

Before the playoffs begin, before championship aspirations are fought for, before future planning is deliberated, let’s take a moment to acknowledge something truly remarkable that has quietly transpired in the midst of a largely torturous regular season. Dwyane Wade has completed a historic shooting year.

For a second consecutive season that started with questions about whether his skills were in serious decline, Wade has transcended the doubters, and the injuries, to accomplish the spectacular.

He shot 54.5% from the field in 2013-14.

How good is that?

Well… It represents the best shooting season for any shooting guard in the past 31 years. It represents the second best shooting season for any shooting guard who averaged double-digit points of all time. It represents the third best shooting season for any starting shooting guard of all time. And it represents the fourth best shooting season for any shooting guard of all time.

That bears repeating: Dwyane Wade just produced the best shooting season for any shooting guard in the past 31 years, and the fourth best in NBA history!  Read more…

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Miami Heat Sign Justin Hamilton, Release DeAndre Liggins

March 14th, 2014 1 comment

Many of the mid-season maneuverings by Pat Riley and the Miami Heat have appeared somewhat erratic, confused and questionable. But did they, accidentally or otherwise, end up in the right place? That’s for you to decide.

On Jan. 7, former All-Star center Andrew Bynum was released by the Chicago Bulls. Upon being waived, he expressed an immediate interest in joining the Heat. 

It seemed inevitable. The Heat had a definitive need at the position. They had the non-guaranteed contract of Roger Mason Jr., which could’ve been terminated at no further cost to the Heat, to release in order to free up the necessary roster spot. They had the financial wherewithal to get a deal done, having traded away Joel Anthony in a financially-motivated move that saved the Heat far more than Bynum was sure to cost. They had a player in Bynum who, when healthy and properly motivated, provides exactly what this Heat team needs.

The Heat instead chose not to waive Mason Jr., not to create the roster spot, and not to pursue Bynum. Heat officials were concerned about how adding Bynum would affect Greg Oden, who had done everything the Heat has asked, because Miami wanted to give him minutes. Heat head coach Erik Spoelstra called the decision any easy one, insinuating that Mason Jr. never even had anything to worry about.

Bynum went on to sign with the Indiana Pacers. In his first game with the Pacers, against the Boston Celtics last Tuesday, he showed a great deal of promise – grabbing an avalanche of rebounds, showing explosiveness at the rim and putting his sweet interior passing on display. His 16-minute performance in a reserve roll behind incumbent starter Roy Hibbert was better than anything Oden has produced thus far this season for the Heat. Read more…

Did the Heat Turn Down An Evan Turner for Udonis Haslem Offer?

February 27th, 2014 No comments

It has been suggested that the Miami Heat were engaged by the Philadelphia 76ers with an interesting proposition at the Feb. 20 NBA trading deadline. It has been suggested that Sixers general manager Sam Hinkie proposed a trade to Heat general manager Pat Riley of Evan Turner, in exchange for Udonis Haslem and a future first round draft pick.

Riley reportedly rejected.

Did he do the right thing? Well, that’s for you to decide.

The Mechanics

Let’s get a couple things out of the way before we begin.

First, the rumored trade, as described, doesn’t work. It violates salary cap rules.

Taxpaying teams like the Heat can only take back up to 125% of their outgoing salaries, plus $100K, no matter how much salary the team is sending away.

Haslem makes $4.3 million this year. He can therefore only be traded for a player(s) who makes as much as $5.5 million. Turner makes $6.7 million.

When trades are rumored about, oftentimes only the vital components are leaked. The technical details are often either not yet established or not considered vital, and are therefore not leaked alongside the rest of the trade. If indeed this rumor is true, that may be what’s happened here, particularly because the solution is simple. If the Heat were to add an expiring contract to the deal – say, for example, Rashard Lewis – the trade would be legal.

Second, there’s the matter of the draft pick. The concept of including a first round draft pick is quite vague. When would that pick be conferred? What protections would be attached to it?

The Heat’s current predicament answers these questions, and quite nicely.  Read more…

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