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Heat Acquire Goran Dragic From the Suns in Three-Team Trade

February 19th, 2015 No comments
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Note: This post was moved from being an update to a previous post to a new post on its own. The words, however, are the exact same.

The Miami Heat’s long, arduous search for an elite point guard is now over. The Heat has acquired what it hopes is its point guard of the future in Goran Dragic.

The Heat received Dragic and his brother Zoran Dragic from the Phoenix Suns as part of a three-team trade that involved the New Orleans Pelicans. In return, the Heat sent Norris Cole, Shawne Williams, Justin Hamilton and $369K in cash to the Pelicans and Danny Granger, $2.2 million in cash (equivalent to Granger’s salary for next season) and two future first round draft picks to the Suns. The Pelicans sent John Salmons to the Suns to complete the deal. Williams and Salmons will be waived by their new teams. By rule, Williams is not allowed to re-sign with the Heat.

The Heat have struggled thus far this season, their first since LeBron James left after a four-year stay in Miami to return home to Cleveland. But through the struggles has emerged a potential future star in Hassan Whiteside. Whiteside has been rampaging 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. He will now have a first rate point guard off of whom to feed; the Dragic-Whiteside pick-and-roll pairing would seem as deadly as any in the league.

The addition of Dragic presents the prospect of a formidable starting lineup for the Heat, when healthy, in Dragic, Dwyane Wade, Luol Deng, Chris Bosh and Whiteside. It figures to be as talented as any in the Eastern Conference, outside of perhaps the Cleveland Cavaliers. If things go well, the Heat could challenge for an NBA title as early as this season, a concept which seemed all but impossible after James’ departure.

But, while the upside is both massive and readily apparent, this was a risky trade for the Heat.

Miami will send Phoenix the first of its two first round picks two years after its obligation to the Philadelphia 76ers is satisfied (most likely this season). That pick is top-10 protected in 2015 and 2016, and becomes unprotected in 2017 if not previously conveyed, meaning it will be sent to the Sixers in 2015 assuming the Heat make the playoffs. The pick to be sent to the Suns is top-seven protected in 2017 and 2018, and becomes unprotected in 2019 if not previously conveyed. Assuming the Heat don’t even up with one of the seven best picks in the draft in two seasons, it will be conveyed in 2017, but Miami could still wind up sending away a lottery pick.

The second first round pick goes to the Suns in 2021 with no protection whatsoever. The 2021 draft is a long ways away; there isn’t a single player on the roster whose contract extends out that far. There’s a long history of NBA teams making costly mistakes by not worrying about a seemingly distant future. One need only to imagine a scenario whereby an aging Heat team struggles to finish with one of the worst records in the NBA, only to have its premium draft pick stripped away, to see the risk.  Read more…

Goran Dragic to Miami Heat Would be Wonderful But Complicated

February 12th, 2015 No comments
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Note: In my effort to keep things organized, I have moved my update to reflect the acquisition of Goran Dragic to a separate post above. 

After LeBron James left last July, Miami Heat president Pat Riley said “I want this team to be as competitive as it’s ever been.” But he spoke of pursuing two simultaneous courses of action: trying to stay competitive for the following two seasons, while maintaining maximum flexibility for the all-important summer of 2016.

Riley acquiesced to those distinct courses of action by re-signing Chris Bosh and honoring his commitment to Josh McRoberts, contracts that weigh on the team’s summer of 2016 flexibility, but refusing to allow anything to increase the burden any further in filling out the roster.

The NBA has struck gold with the frivolous distraction that is professional basketball. The salary cap will explode higher than helium-sucking angels in the years to come, on the strength of an enormous burst in league-wide revenues. After a relatively tempered rise from the current $63 million to a projected $68 million next season, 2016-17 cap projections are expected to reach as high as $90 million (unless a salary cap smoothing mechanism is implemented), as the league’s massive new $24 billion TV rights deal takes effect.

With just the contracts of Bosh ($23.7 million) and McRoberts ($5.8 million) on the books, the Heat figures to have as much as $60 million of summer of 2016 cap space with which to work.

Will Riley again hit the jackpot in 2016, as he did in 2010?

Such a story could be painted: 2016 Hassan Whiteside could play the part of 2010 Dwyane Wade, the in-prime free agent superstar who loves Miami and recruits others to join him. He would be selling the opportunity to play alongside his dominant interior-oriented self and his ideally-suited perimeter-oriented frontcourt teammate Chris Bosh. He would be selling one of the NBA’s few universally appealing cities, an increasingly critical local income tax haven, as well as the organization’s track record of success.  Read more…

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Heat Re-Signs Tyler Johnson to Two-Year Minimum Salary Contract

February 8th, 2015 1 comment
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It was a simple twist of fate. Had it not been for Dwyane Wade’s third significant hamstring injury thus far this season, he would not even be here at all. And yet, it now appears that combo guard Tyler Johnson could be here for years to come, as the Miami Heat development machine has churned out another talented rookie.

First, it was Hassan Whiteside. Whiteside has been rampaging 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.

Now, it is Johnson, whose exploits have provided promise for the future. Johnson is undersized at 6-foot-3 with a slender frame, but compensates for it with his shooting stroke, athletic abilities and determination. In his limited time, Johnson has shown excellent three-point range that can be leveraged to provide a critical floor-spacing complement to a play-making Wade in the backcourt, as well as the speed and quickness to defend opposing point guards in such a pairing. He has also shown an ability to leverage his big-time athleticism — when he attacks the rim, he’s a potential highlight every time he takes off — to create offensive for himself and others. Despite his physical limitations, Johnson’s skill-set is NBA quality and a perfect fit for the Miami Heat.

For president Pat Riley, head coach Erik Spoelstra and the Heat front office, Johnson, who went undrafted in June out of Fresno State, has become a scouted, developed talent. The team paid him $75,000 to attend training camp before he was waived in late October so that he could be directed to the Heat’s NBA Development League affiliate, the Sioux Falls Skyforce.

Johnson played well for the Skyforce, averaging 18.5 points, 4.3 assists and 4.3 rebounds. He shot 49.0 percent from the field, including 42.6 percent from beyond the three-point line.

Johnson was re-signed by the Heat on Jan. 12, to a 10-day contract paying out $29,843, just before the NBA D-League Showcase in Santa Cruz. It did not amount to much. He was with the team for five games. He was inactive in one and did not play in three others. His only action was 1:44 of mop-up duty in one game, during which he scored two points on a pair of free throws, his only statistics. The Heat then chose not to re-sign him. He went back to the Sykforce on Jan. 22 as an unrestricted free agent.

Five days later, on Jan. 27, Wade strained his right hamstring. Two days after that, Johnson was re-signed to a second 10-day contract.

Johnson had two breakout performances during his second 10-day stint – producing 13 points, nine rebounds, four assists, two steals and two blocks in a road win over the Boston Celtics on Feb. 1, followed by an 18-point effort against the San Antonio Spurs on Friday.

Multiple NBA teams were circling as he again became an unrestricted free agent Sunday morning. The Heat, however, got their man.  Read more…

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NBA Announces Digital Partnership With Chinese Internet Giant Tencent

January 29th, 2015 No comments
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The NBA has formed its largest international digital partnership through an expansion of its arrangement with Chinese Internet giant Tencent Holdings Limited, the league announced in a joint press release issued late Thursday night.

Tencent – a publicly-traded company with a current market capitalization of $163 billion, whose shares trade on the Hong Kong Stock Exchange (HKSE: 0700) and whose American Depository Receipts trade over-the-counter in the U.S. (OTC: TCEHY) – will become the league’s exclusive official digital partner in China.

The new five-year pact will provide Tencent the exclusive right to stream live games, original programming and highlights to hundreds of millions of active users across its online and mobile platforms, including Tencent QQ, Tencent Video, Tencent News and Weixin, the popular messaging app also known as WeChat.

The deal will provide Tencent the right to offer for the first time in China the NBA’s League Pass package, which will allow subscribers to watch a full season’s worth of games live and on-demand on their computers and mobile phones. The deal also provides for interactive gaming and the sale of merchandise.

According to The New York Times, the agreement calls for the NBA to receive a guaranteed payout of $500 million over the life of the deal, with an additional $200 million more expected through a revenue-sharing arrangement. It will start on July 1, 2015, the first day of the 2015-16 NBA season.

It remains unclear as to how much of the revenues in this new deal would be incremental to those provided in its existing arrangement, but the increment figures to be substantial. And it will have a material impact on the salary cap.

By the league’s math, an estimated annual payout of between $100 million and $140 million increases the salary cap by $1.5 million to $2.1 million, respectively, and the luxury tax by $1.8 million to $2.5 million.  Read more…

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The Soon To Be Very Expensive Cleveland Cavaliers?

January 21st, 2015 No comments
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Note: This post has been updated to reflect the most current information as of June 24, 2015.  

The showdown between Stephen Curry and LeBron James proved to be the most popular NBA Finals on television since Michael Jordon was winning his sixth championship back in 1998. Unfortunately for James and the Cavs, they lost.

The Cavs aren’t NBA champions, but they have the roster for it — and the payroll.

If they bring everyone back at the expected rates, including James and Kevin Love once they opt out, the 2015-16 Cavs could end up being the most expensive team in NBA history.

Want to see how expensive?

Pick whatever numbers you want for each player. See what they do to the Cavs’ 2015-16 payroll obligations. You can change any of the numbers with light grey backgrounds, within the parameters of what is legal. If you don’t want a player to return, simply delete his salary (or set it to $0). If you make a mistake, the number will change color to red to alert you. I have added notes for each row to guide you along. If you mess up, just refresh the page and start over.

Read more…

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Hassan Whiteside Is Very Much A Part of Miami Heat’s Future

January 12th, 2015 No comments
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Update (1/27/15): Hassan Whiteside is showing soft touch at the rim, developing low-post moves, and solid range on his jumpers to go along with his world-beating shot-blocking and rebounding skills. His game gets more exciting with each passing day. He is becoming one of the NBA’s elite centers. These developments imply that he is likely to command a starting salary higher than the $6.3 million projected average salary when he becomes an unrestricted free agent in two years. That, in turn, would mean that the Heat would need to carve out cap space for his contract. He would be eligible for anything up to the max, which I am currently projecting at $21 million. 

It was a simple twist of fate. Had it not been for Chris Andersen’s sprained ankle, Chris Bosh’s strained calf and Josh McRoberts’ torn meniscus, he might not even be here. And yet, 7-foot rookie center Hassan Whiteside, the Miami Heat’s mid-season acquisition, is quickly becoming the team’s most vital player.

Whiteside has become the focal point of a fan base desperately seeking out hope for the future during a painful post-LeBron-James transition. He’s rewarding us all with boundless energy, youthful exuberance, and quick ascent. In his limited experience, Whiteside has been rampaging 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.

Whiteside is averaging a staggering 16.6 points, 14.4 rebounds and 4.4 blocks per 36 minutes played. He is shooting 69.2 percent from the field, while players he is defending are shooting just 43.3 percent.

He was never supposed to be this good this quickly. For a city so long starved for anything approaching decent play at the center position, the extraordinary exploits of the budding 25-year-old have been a joy to watch.

But Whiteside is quick to clarify one thing: He is not a rookie, at least in terms of NBA designation. And that distinction, however technical, is more significant than you may realize.  Read more…

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Memphis Grizzlies Seeking Possible Trade For Luol Deng

January 8th, 2015 No comments
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The Memphis Grizzlies, aiming to bolster their scoring and playmaking options on the wing in the increasingly competitive Western Conference, are having discussions about trading for the Miami Heat’s Luol Deng or the Boston Celtics’ Jeff Green in advance of the Feb. 19 trade deadline.

Any Grizzlies offer for Deng or Green is likely to feature the $7.7 million expiring contract of Tayshaun Prince, as well as the promise of future draft compensation to serve as an enticement to complete the trade.

It is not immediately clear how willing Miami would be to trade Deng, who is not even halfway through the first of a two-year, $19.9 million contract he signed with the Heat in the wake of LeBron James’ return to the Cleveland Cavaliers via free agency this past summer.

After James departed, Heat president Pat Riley said “I want this team to be as competitive as it’s ever been.” But he spoke of pursuing two distinct and simultaneous courses of action: trying to stay in the playoff race for the following two seasons – even while the Heat’s 2015 first round pick is owed to the Philadelphia 76ers if it is outside the top 10 – but with a clear focus on maintaining flexibility for the expected availability of several top free agents in the summer of 2016.

With the Heat already at 15-20 as it begins a challenging five-game road trip out west, it is unclear as to how willing Riley might be to sacrifice the former for the benefit of the latter.

Trading Deng could, among other things, damage the Heat’s ability to make the playoffs this season as well as put at risk its ability to clear its first round pick obligation off the books this summer. The pick is top-10 protected for this season and next, and becomes fully unprotected if not previously conveyed.

But trading Deng could also provide the Heat with a far better pick — a top 10 pick — in what is presently considered to be a deep draft this summer as well as with the additional draft pick compensation to be received in the trade. That could set the Heat up quite well for the summer of 2016.

All trade proposals should surely be considered even if not ultimately pursued.

But trade scenarios are complicated.

Deng is earning $9.7 million this season, and he has a player option that would pay him $10.2 million for next season if he exercises it in June. But he also has a trade bonus which, by rule, he cannot waive, in whole or in part, except to make a potential trade legal.

Deng’s trade bonus would be valued at 15 percent of his remaining salary for the season, the amount of which would depend upon the exact day he is traded. If Deng were to be traded today, his bonus would be $840K; if he were traded at the trade deadline, it would be $480K. The amount of the trade bonus, if any, would be allocated entirely to this season.

A straight up trade of Deng for Prince would be legal, but only if Deng were to agree to surrender the vast majority of his trade bonus (all but $20K). Deng would therefore effectively hold veto power over such trade discussions.  Read more…

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Miami Heat Receive Josh McRoberts Disabled Player Exception

December 26th, 2014 No comments
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The Miami Heat lost Josh McRoberts for the rest of the season after he underwent surgery to repair the torn lateral meniscus in his right knee last Monday. As a result, the league office has granted the Heat a disabled player exception equal to half his salary, or $2.65 million.

The Heat can use the exception to acquire one player to replace him:

  • The Heat can sign a free agent to a contract for the rest of the season only, with a salary of up to $2.65 million.
  • The Heat can trade for a player in the last season of his contract only (including any option years), who is making no more than $2.75 million.
  • The Heat can claim a player on waivers who is in the last season of his contract only (including any option years), who is making no more than $2.75 million.

McRoberts’ status with the team will not be affected. He will continue to count as one of the NBA-maximum 15 players on the roster. He can return to the active roster before season’s end if he is able to do so (and any replacement player would not be affected). He can be traded while injured. However, if he does return or is traded before the Heat has used the exception, the team would lose it. Otherwise, it expires on March 10.

The Heat had hoped to use the exception to lure free agent forward Josh Smith to Miami. The Detroit Pistons made an abrupt and shocking move to release Smith last Monday, despite $36 million in guaranteed money still to be paid on his contract. Players that good who are owed that much money virtually never hit the open market in such fashion. Smith, however, chose to sign with the Houston Rockets.

The Heat must now look elsewhere in its search for a player who can replace the injured McRoberts and help improve a thin power rotation. Potential targets are both intriguing and problematic.  Read more…

Heat Apply for Disabled Player Exception, Set Sights on Josh Smith

December 22nd, 2014 No comments
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The Miami Heat formally applied to the league office for a disabled player exception on Monday, shortly after Josh McRoberts had season-ending surgery to repair the torn lateral meniscus in his right knee, in a move they hope will help them land soon-to-be free agent Josh Smith.

The Detroit Pistons made an abrupt and stunning move to release Smith earlier in the day, despite $36.0 million in guaranteed money still to be paid on his contract. His contract has an additional $9.0 million still to be paid on his $13.5 million salary for this season, and calls for salaries of $13.5 million in each of the following two seasons as well.

Smith will now spend 48 hours on waivers, during which time any team with the necessary cap space or a qualifying exception large enough to absorb his $13.5 million salary cap hit can make a claim to pick up the remainder of his contract. The only such team is the Philadelphia 76ers, which is not about to do so.

At 5 p.m. on Wednesday, Smith will clear waivers and become an unrestricted free agent, free to sign with the team of his choosing. Players this good who are owed this much money virtually never hit the open market in this fashion.

A number of teams have expressed an interest in signing Smith once he clears waivers, including the Heat, Houston Rockets, Dallas Mavericks, Sacramento Kings, Los Angeles Clippers and Memphis Grizzlies.  Read more…

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The Curious Case of Greg Monroe

December 18th, 2014 No comments
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According to NBA rules, Pistons center Greg Monroe is now eligible to be traded. According to the Sporting News, he wants that, badly. The Heat have reportedly made an initial inquiry.

But, according to the Sporting News, teams seeking Monroe will need to cough up a first-round pick, and that’s a serious sticking point. It’s a rich asking price for a player who will become an unrestricted free agent at the end of the season, at which point any team can sign him without sacrificing anything in return.

Under normal circumstances, that’d be ok. Because the audience would be different. In free agency, the audience for a player would be limited to teams with the necessary cap room to sign him. The audience for a player in potential trade scenarios might include a handful of teams which don’t project to have the cap space to sign him the following summer, and might be willing to pay a hefty price to gain access to the Bird rights which give them the opportunity to do so. Bird rights are what allow a player’s prior team to exceed the salary cap to re-sign him, for up to as much as a maximum salary. Under normal circumstances, Bird rights tag along with a player in trade.

But Monroe’s predicament is anything but normal.

Monroe, selected by the Pistons with the seventh overall pick in the 2010 NBA draft, completed the fourth and final season of his rookie-scale contract last year. Players coming off rookie-scale contracts can be made restricted free agents – a more restrictive form of free agency whereby the player’s prior team gains a right of first refusal to match a contract he signs with any other team – but only if they first issue a qualifying offer. The qualifying offer is a standing offer for a one-year guaranteed contract, which becomes a regular contact if the player decides to sign it. This ensures that the team does not gain the right of first refusal without offering a contract itself.

Monroe’s representatives steered other teams away from presenting Monroe with any offers last summer because they didn’t want the Pistons to match, and keep Monroe for another four seasons. Instead, Monroe accepted his $5.5 million qualifying offer. Now, after playing out his one-year contract, Monroe will have the freedom to pick his new team in July, and that’s what he wanted: control of his future.  Read more…

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