A Chris Andersen Decision to Opt Out Could Have Mutual Benefits

June 28th, 2014 No comments

Chris Andersen is impossible to ignore. The sometimes-bearded, sometimes-Mohawked 6-foot-10 forward/center has his nearly luminous skin filled in technicolor artwork to mask the body of a man who is part enigma, part cult hero, part unlikely role model.

Andersen’s popularity stems from some cosmic combination of hops, hustle, hair and history. His boundless energy speaks volumes about a life predicated on endurance.

If you’ve followed the story of his life, you might wonder how it’s possible that he’s been able to endure. Or where along his path you might have quit. The “Birdman” never has – not after impossible childhood circumstances, not after tragic personal relationships, not after the drugs that forced a mandatory two-year suspension from the league, and certainly not after the most bizarre of stories destroyed his reputation.

In May of 2012, detectives in the Internet Crimes Against Children unit of the Douglas County, Colorado came to his door – confiscating both his computers and his dignity, causing widespread rumors and whispers of hard drives and the age of consent, and forcing him to live under the worst kind of suspicion. He was amnestied by the Denver Nuggets two months later. Nobody would touch him. Serious talent wasting away. He kept quiet while his life was falling apart. Six months passed by. Nothing. His lawyer finally spoke up, proclaiming his client’s innocence. Within a week, Miami had signed him.

The next phase of his life story couldn’t be scripted much better. It’s a story of equal parts success and sacrifice.

A championship. A new two-year contract. Minimum salary. He was eligible for more. We all wanted to give it to him. He deserved it. But he sacrificed for team, his owner and his fans. Then, last September, complete vindication. It was revealed that he’d been the target of an elaborate online extortion plot engineered by a woman in rural Manitoba, Shelly Lynn Chartier. The case was so complex that even he didn’t know exactly what happened. He’s moved on. He even has a TV show in the works, called “Urban Outdoorsmen.”

The question now, for Heat fans, is how his journey will continue. Has a decision to make. He has one year left on his minimum salary contract if he wants it. Or he can opt out. It would appear he’s made it. It would appear he intends to opt out.  Read more…

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Miami Heat Trade Up to Acquire Shabazz Napier in 2014 NBA Draft

June 26th, 2014 No comments

The Miami Heat had perhaps never been as obvious about their intentions as they were in preparation for the 2014 NBA Draft. They wanted former UConn point guard Shabazz Napier.

They got their man, by making a trade for his draft rights with the Charlotte Hornets.

In return, the Heat dealt draft rights to its two picks P.J. Hairston (26th) and Semaj Christon (55th), a 2019 second-round draft choice, and $1 million in cash.

Napier was projected by many to be a mid-first round pick, with teams such as the Orlando Magic, Atlanta Hawks and Chicago Bulls showing strong interest. The Heat had made an all-out effort in recent days to move up in the draft to improve their odds of selecting him but lacked the resources to get up too high.

Yet as the draft continued, Napier’s name kept getting bypassed.

When he was ultimately selected at No. 24 by the Hornets, there was a brief moment of exasperation. The NBA’s draft order is determined as the inverse of each team’s record at the end of the preceding regular season. The Heat had tied the Portland Trail Blazers and Houston Rockets, finishing the 2013-14 regular season with identical 58-24 records. The NBA therefore held a pair of tiebreakers among the three teams on April 18 to determine the allocation of pick Nos. 24, 25 and 26. Portland, which had previously surrendered its pick to the Hornets in a February 2011 trade for Gerald Wallace, ultimately won a tiebreaker with Miami and Houston, and Houston then won a tiebreaker with Miami. The Heat, therefore, appeared to have lost out on Napier because of draft order tiebreaker unluckiness.

Moments later though, it became apparent that the Hornets had made their selection of Napier on behalf of the Heat. The Heat were apparently unwilling to wait and hope that Napier would fall to them two spots down. Between the Hornets at No. 24 and the Heat at No. 26 stood the Rockets, who are vying for the services of free-agent-to-be LeBron James. The Heat were fearful that the Rockets could poach Napier, a James favorite, as a means to improve their roster, to make the Heat a less desirable destination for James, or both.  Read more…

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Would the Big Three Take Less to Help the Miami Heat?

June 21st, 2014 5 comments

Update (6/28): I wrote the following article several weeks ago, and posted it exactly one week ago. Since that time, several things have changed (e.g., the Heat traded up in the draft to select Shabazz Napier, several Heat players opted out of their contracts, the Heat have been rumored to be seeking a trade partner for Norris Cole, etc.), which slightly alter the figures presented in this post. This table provides an updated depiction of the hypothetical situation described below.

The day LeBron James, Dwyane Wade and Chris Bosh agreed to join together with the Miami Heat in the summer of 2010, they laid out a plan. They would each play four years together, then re-evaluate. They each signed nine-figure, six-year deals containing opt out rights prior to the final two. They were expecting titles. We all were.

Through the first three of those years, all was as projected to be. Three straight NBA Finals appearances, two straight titles. But that was before this past year turned into a disaster, before they got throttled by the San Antonio Spurs.

James, Wade and Bosh are all on vacation now, a sort of rejuvenation for a trio who have played more basketball over a four year stretch than any other in league history. They will each take some time to consider their futures, to consider whether or not they wish to terminate their contracts.

The wait is unnerving. It is a reminder that the Heat and James, in particular, have a very uncertain future together, that his potential free agency, which could arrive in just days, looms over this city with as much significance as did Wade’s four years ago. It’s caused us to lose our equilibrium. It’s caused us to lose our perspective. We need to “get a grip” on reality. The Miami Heat, as presently constructed, can still be a championship-caliber team.

Sure, the team has it flaws. Lots of them. And they need to be addressed. But we, as fans, are hoping for much more than that. Cutting corners in the repair of a leaky dam will eventually cause it to burst. Like it did in 2006-07. Which caused 2007-08. Nothing short of a complete overhaul, then, will appease us.

A tear down and restructure requires sacrifice. It requires James, Wade and Bosh to each opt out of his contract and take less. Much less. It’s the only way. But is it possible?  Read more…

Where Do the Miami Heat Go From Here?

June 20th, 2014 No comments

The Miami Heat’s bid for a three-peat – to many, the ultimate basketball accomplishment, and a prerequisite for dynasty status – has fallen short. In the wake of this frustrating failure, we’re all left wondering what the future holds. We’re all left wondering if this is the end of something great, or maybe just a bump in the road at the start of something greater.

LeBron James, Dwyane Wade and Chris Bosh are all eligible to become free agents this summer, but, following last Sunday’s crushing loss to the San Antonio Spurs, they deflected questions about their NBA futures. They each plan to take some time and talk with their families before eventually deciding how to move forward. The wait is infuriating. The uncertainty unnerving.

Of the 15 players currently under contract, 13 can or will become free agents at season’s end.

There are eight players with expiring contracts: Greg Oden, James Jones, Mario Chalmers, Michael Beasley, Rashard Lewis, Ray Allen, Shane Battier and Toney Douglas. Battier will retire. Allen may retire. The status of the rest remains unclear.

There are five players with player options/ETOs: James, Wade and Bosh, as well as Udonis Haslem and Chris Andersen. Haslem and Andersen are likely to be back with the Heat next season, though they may opt out of their contracts to help the Heat maneuver around salary cap issues. Andersen has reportedly already declared his intention to decline his option.

The final two current Heat players are under contract through next season as well: Norris Cole and Justin Hamilton. Hamilton’s salary is non-guaranteed.

The Heat also has its first round pick (No. 26 overall), its second round pick (No. 55 overall), and its 2013 second round pick James Ennis to consider.

Amid this cloud of uncertainty, the Heat did receive a bit of good news in April, when the NBA issued new projections for the 2014-15 salary cap and luxury tax thresholds. All 30 teams were informed via league memorandum that an increase in the cap from this season’s $58.6 million to $63.2 million next season is expected. A corresponding rise in the luxury tax threshold from $71.7 million to $77.0 million is also expected. These are the last non-binding forecasts that will be provided by the league until the official cap and tax thresholds for next season are announced in early July, following a league-wide audit.

With the gravity of these projected increases, many of us have been seduced into thinking that the Heat will have the necessary maneuverability with which to materially improve this summer. But does that line of thinking have any basis in reality? It all depends upon what you believe James, Wade and Bosh are willing to sacrifice.  Read more…

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Dwyane Wade’s Looming Free Agency Decision

June 18th, 2014 15 comments

With the 2013-14 NBA season now at its tragic end, it seems as though the biggest topic of conversation is whether LeBron James is going to opt out of his contract with the Miami Heat, two years prior to its expiration, and explore his options as a free agent. As pundits weigh in and teams’ salary cap experts scramble to figure out how they might be able to get their hands on the greatest player of this basketball generation, Dwyane Wade’s potential free agency looms quietly in the background.

Wade just completed the fourth of a six-year $108 million contract he signed in the summer of 2010. He, like James, structured his contract to give himself the ability to opt out after both the fourth and fifth seasons. The first of those opt out decisions needs to be made by June 30.

We as fans can’t possibly overstate the importance of Wade to the Heat franchise, both on and off the court, but we also can’t ignore his advancing age or the health restrictions that cause him to miss so many games and render him ineffective in so many others. And so, we tell ourselves that the Heat brass needs to try to persuade him — for all of his undeniable status as a Heat legend, as well as the chief co-linchpin alongside Pat Riley who brought the Big Three together — to opt out and instead take a Tim Duncan-style pay cut for the good of Miami’s flexibility.

We tell ourselves that Wade should take a discount because he simply isn’t worth the $42 million he has coming to him over the next two years. We tell ourselves that Wade should take a discount because he is making tens of millions of dollars in endorsement money. We rationalize our convictions any which way we can. We ignore the reality: Wade is owed this money.  Read more…

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LeBron James and the Next Decision

June 17th, 2014 5 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 short. In the wake of this failure, we’re all left wondering whether this is the end. We’re all left wondering whether LeBron James is going to opt out of his contract with the Heat, and evaluate his options as an unrestricted free agent.

A betting man would still put his money on James staying. There are lots of reasons to think he will remain in Miami. The Heat have made it to the NBA Finals for four straight years, winning two. The conference in which the team plays is in shambles, installing them as early favorites to win future titles. He’s got the real Big Three in Heat owner Micky Arison, president Pat Riley, and coach Erik Spoelstra. He’s got a great market. He’s got the sun. He’s got the beach. He’s got the tax shelter. His two young sons enjoy South Florida and play middle school and AAU basketball, and his wife opened a juice bar in Miami last December. After four seasons in Miami, James’ ties run deep.

A skeptical man might say he’d be a fool to stay. The Heat’s reign at the top of the basketball world appears to be closing. Dwyane Wade’s skills are in decline, and his injuries are starting to mount. Chris Bosh isn’t quite the player he was envisioned to be. Shane Battier is done. Ray Allen may also be done. The “Birdman” is old. As is the entire team. The oldest in the NBA, in fact. There’s no youth. No promise for the future. And the rest of the league has caught up to the Heat of the present. If the Heat had a margin of error before — some cushion between themselves and everyone else — it’s gone.

James doesn’t need to make up his mind this summer. His contract runs for two more seasons, with an opt-out prior to each. He could decide to make another run next season and re-evaluate in 2015, or even play two more seasons and make a decision in 2016.  Read more…

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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…