Update (6/21/16): As expected, the Miami Heat has formally extended a $1.2 million qualifying offer to Tyler Johnson. The Heat can now match any offer sheet Johnson signs with any other team, which cannot have a starting salary higher than $5.6 million. Johnson now officially reduces the Heat’s cap space by $1.2 million. If it times everything correctly, the Heat can now exceed the salary cap to retain him, whether it be by matching an offer sheet with a starting salary as high as $5.6 million or by signing him outright to a contract starting as high as a projected $6.2 million (the final figure will be determined at the end of July Moratorium). 

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I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. 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 in any way I can.

As an example, the $6.2 million figure presented in this post is my own personal estimate. It has not yet been set by the NBA, nor can it be until the season is complete. It has been projected by various other salary cap experts at wildly different amounts, with recent figures ranging from as little as $5.6 million to more than $8 million.  

Tyler Johnson and Hassan Whiteside have some intriguing parallels.

Both were mid-year signees during the 2014-15 NBA season. Both have been playing under partially guaranteed, two-year minimum salary contracts that expire at the same time. Both will be free agents this July. And both represent a potential future of youth and athleticism at positions of critical need for the Miami Heat.

Despite the similarities, however, their free agency statuses are very different. Johnson’s future in Miami is far more secure, and the price it will take to retain him is far less expensive.

Johnson, like Whiteside, will be a free agent this summer, having accrued two years of service with the Heat. However, Johnson, unlike Whiteside, has accrued just two total years of NBA service, to Whiteside’s four. As such, he will face two critical restrictions that will ensure he remains in Miami.

First, Johnson will be a restricted free agent: This will give the Heat the right to keep him by matching a contract he signs with any other team.

Restricted free agency exists only on a limited basis. It is allowed only for players coming off rookie-scale contracts, and for players who have been in the league three or fewer seasons (as has Johnson). In order to make their free agent a restricted free agent, a team must submit a qualifying offer to the player between the day following the last game of the NBA Finals and June 30. The qualifying offer is a standing offer for a one-year guaranteed contract, which becomes a regular contact if the player chooses to accept it. The amount of the qualifying offer for Johnson will be $1,180,431. If the Heat extends Johnson a qualifying offer, it will have the legal right to match any contract he signs with any other team.

Second, Johnson will be subject to the Gilbert Arenas provision: This will limit what any other team can offer him, all the way down to an amount that the Heat, by rule, will be able to match.  Read more…

“The whole free agency thing… I don’t want to be in it this summer. I don’t want to be on the market at all…. I’m not curious at all… I want to be able to sign my deal [with the Heat] and move on, and not have to deal with any rumors, any free agency, any this, any that. This is where I want to end my career. So we’ll figure it out.”

That was Dwyane Wade, speaking in February to Barry Jackson of the Miami Herald about his desire to avoid testing the free agent market and instead wanting to wrap up a new deal without any of the drama of last offseason, when he and the Miami Heat were initially so far apart on contract negotiations as to threaten the continued tenure of the future Hall of Famer with the only professional organization he has ever known.

Wade’s preference was for a three-year deal that paid out somewhere in the range of $50 million. The Heat’s preference was for Wade to opt into his $16.1 million player option but, short of that, for a three-year deal that paid out somewhere in the range of $30 million. The two sides ultimately settled on a one-year, $20 million contract.

The Heat’s primary concern in taking such a tough stance with Wade wasn’t about how much a large salary would cost for the 2015-16 season, with the Heat projected at the time to become the NBA’s first-ever repeater taxpayer, but rather how a large multi-year contract would impact the team’s flexibility for the 2016-17 and 2017-18 seasons.

What was true last year remains true today, which could portend an equally contentious negotiation.

Wade’s likely demands are both clear and reasonable: He’s going to want a three-year deal with as large a payout as possible, though he may be willing to take the payout over four years, allowing the Heat to reduce the annual cap hits associated with his contract while potentially paying him into retirement if he so chooses in the years ahead.

The Heat’s summer, however, will be primarily dictated not by Wade but by Hassan Whiteside, and by what Pat Riley chooses to do in the wake of a potential Whiteside re-signing. What the Heat can offer Wade will be a byproduct of those decisions.  Read more…

I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. 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 in any way I can.

Dwyane Wade has long proven that winning NBA titles with the only professional organization he has ever known – the Miami Heat — is his primary motivation in playing the sport he loves so much.

His actions for the Heat organization over the course of his brilliant thirteen-year career have served as that proof. He has recruited for it. He has surrendered the spotlight (during the prime of his career) for it. He has sacrificed huge salary dollars — $25 million, to be exact — for it.

Wade may well go down in history as having been perhaps the Heat’s best ever player, despite having never been its highest paid player. He has guided the Heat to five NBA finals appearances and three NBA titles, and has done so while comporting himself with class and dignity.

The future Hall of Fame shooting guard has talked about playing at least three more years. He is likely to want that last large, multi-year contract to close out his career which he so rightly deserves for all that he’s done. But would he be willing to compromise on his desire, if it meant a legitimate shot to pad his title count?

If so, how big of a sacrifice would he be willing to make? And could, or would, the Heat return the favor?

If Wade were willing to make a sizable leap of faith, the Heat could have the tool its needs to manipulate the salary cap to an extreme advantage – maximizing cap space for BOTH this summer AND next summer, all while paying Wade a cumulative total that likely meets or exceeds his current desire.

Let’s review how.  Read more…

I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. 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 in any way I can.

A lot of teams talk about how they are a family. Aspire to it. But very few actually live it the way the Miami Heat organization does.

In the sports world of today, the Heat culture is rare. Heat players are nurtured. They are supported. They are disciplined. They remain family members for life (even if, eventually, they move on).

And, sometimes, they are asked to sacrifice personal successes for the greater good — be it with playing time, money, ego, or whatever else is necessary. Heat players have often sacrificed for the benefit of the organization, in ways that few other organizations can claim.

Hassan Whiteside will become an unrestricted free agent this summer. He will undoubtedly be asked to make a sacrifice, a financial one, this summer.

He certainly doesn’t need to comply. After all, he’s about to turn 27 years old. He’s made just $3.3 million thus far during his NBA career. And at least one team, if not multiple teams, will surely dangle maximum money at him. That temptation can be hard to resist.

Nobody could reasonably fault Whiteside for acquiescing. Nobody can reasonably fault any player for seeking out as much earning power as he possibly can. NBA careers are short, and can end in a flash.

But the Heat will face a challenge this summer. Even though the salary cap is projected to rise to $92 million, and even though the Heat will start the summer with just $48 million in guaranteed contracts, finding enough room to allocate to Whiteside as well as Dwyane Wade, Luol Deng and Joe Johnson will be difficult, let alone finding the room to allocate to any potential upgrades on the open market.

The Heat will have more than enough cap space with which to dole out whatever contract Whiteside demands. But with only around $40 million of free cap space, allocation decisions will be both critical and limited. Paying more money to one player could potentially mean sacrificing another.

The question therefore needs to be asked: How can the Heat balance Whiteside’s desire to maximize his earning power with its need to maintain maximum flexibility?

Can the Heat build a contract that accomplishes both needs? Is it even possible?  Read more…

I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. 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 in any way I can (and do so on a regular basis behind the scenes).

This is the first in a series of eight posts that I believe will cover all aspects of the Miami Heat summer. This one is meant as the general overview. Each subsequent post will cover specific concepts related to this overview in greater detail, as well as provide specific possible scenarios. Though all eight posts are already written, I will publish one per day. 

The NBA salary cap is set to explode higher this summer, from $70 million this past season to an estimated $92 million.

The massive increase will give the Miami Heat a ton of cap room with which to maneuver. Choosing how to allocate it, however, will force the Heat to make some tough decisions.

Miami will start the summer with just six players under contract for the 2016-17 season – Chris Bosh, Goran Dragic, Josh McRoberts, Justise Winslow, Briante Weber ($219K guaranteed) and Josh Richardson (non-guaranteed). Those six players will cost a combined $49.8 million.

Miami will also retain the rights to potential restricted free agent Tyler Johnson.

Due to the nature of Johnson’s contract situation(1), at a cost of just a $1.2 million qualifying offer, Miami will be able to sit back this summer and wait for another team to sign him to an offer sheet which, by rule, can have a starting salary no higher than $5.6 million. Then, assuming it times everything correctly, after all of its cap space is used up elsewhere, the Heat can exceed the cap to match that offer sheet and retain him. If no other team engages with Johnson, the Heat can exceed the cap in signing him to a new contract with a starting salary as high as $6.2 million.

Taking into account the $49.8 million in 2016-17 salaries already on the books, the $1.2 million qualifying offer for Tyler Johnson, and applicable charges for open roster spots, Miami would be left with approximately $40 million in cap space with which to spend on its internal free agents – including Hassan Whiteside, Dwyane Wade, Luol Deng and Joe Johnson, among others – as well as any external free agents it may seek to target.

The Heat could increase its cap space even further if it were to waive and stretch the contract of McRoberts, which has two years and $11.8 million remaining on it. By doing so, the Heat would replace his $5.8 million and $6.0 million salaries for the 2016-17 and 2017-18 seasons, respectively, with a $2.4 million dead-money cap charge that would be placed onto the Heat’s books for each of the next five seasons (through 2020-21). That, in turn, would increase the Heat’s cap space to as much as $43 million.

If Miami could instead somehow find a taker for McRoberts without taking any salary back in return, cap space could grow to $45 million. Beyond player assets and a first-round pick all the way out in the year 2023, however, the Heat doesn’t have much with which to entice a potential trade partner to do so.

Choosing how to allocate that $40 million to $45 million of cap space will be of critical concern.  Read more…

I have a request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree. I therefore ask that you please not simply copy my work without providing proper credit. 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 in any way I can.

The NBA has issued updated projections for the 2016-17 salary cap and luxury tax thresholds.

All 30 teams were informed this week via league memorandum that the 2016-17 salary cap is now projected to be $92 million, while the luxury tax threshold is projected at $111 million.

The numbers represent a substantial increase from the NBA’s initial projections for the 2016-17 season issued last July – which called for a salary cap of $89 million and tax threshold of $108 million – as well as a massive increase over the 2015-16 cap and tax of $70.0 million and $84.74 million, respectively.

The primary reason for the jump is the new national TV rights deals with ESPN/ABC and TNT, nine-year pacts worth a combined $24 billion which will pump in an incremental $1.1 billion of revenues next season.

National TV revenues, however, aren’t the league’s only source of revenue growth. Not by a long shot.

The updated cap figures suggest the league is now expecting revenue growth for the 2015-16 season from sources other than national TV rights to come in at more than 9 percent, when the figures are finalized in less than three months.

The huge increase in revenues, which comes on the heels of a huge increase last season as well (8.2 percent year-over-year growth), will come from a variety of sources.

Gate receipts, which grew by about $100 million in 2014-15, will spike again, along with related concessions and merchandise sales, thanks in large part to the Golden State Warriors’ record-breaking 73 win season and the retirement tour of the Los Angeles Lakers’ Kobe Bryant.

Commissioner Adam Silver has also landed several new sponsorship deals and extensions of existing arrangements at rates that far outpace their previous amounts.  Read more…

The NBA board of governors on Thursday approved a three-year pilot program to allow teams to sell advertising space on their jerseys. The program will begin with the 2017-18 season, and extend through the 2019-20 season.

Each team will be responsible for selling its own sponsorships. The sponsorships, in the form of patches that will measure approximately 2.5-inches by 2.5-inches, will be placed on the front left of game jerseys. Teams can now start engaging with potential advertisers, giving them enough lead time to secure contracts.

The value individual teams could hope to generate from such jersey ad sales could range widely, from perhaps as low as $1 million per year for small-market teams like the Memphis Grizzlies to more than $10 million per year for large-market teams like the New York Knicks and Los Angeles Lakers, which could equate to at least $150 million per year in total.

Individual teams will keep 50 percent of the ad money they generate, and contribute the remaining 50 percent to the revenue-sharing pool for the benefit of smaller-market, lower-revenue-generating teams.

The new revenue would be counted as basketball-related income in accordance with the terms of the 2011 Collective Bargaining Agreement and, therefore, split with the players. It would also, in turn, increase future salary cap levels.

Based upon the currently negotiated split of revenues, players would be in line to receive 51 percent of the new revenues, which equates to $77 million of a potential $150 million total.

Based on the current salary cap calculation methodology, the new revenues would increase future cap levels by at least $2.2 million (excluding any associated adjustments).   Read more…

The Miami Heat ultimately got its man.

The Heat signed Briante Weber to a three-year, $1.9 million minimum-salary contract on Sunday.

The contract will pay out a guaranteed $12,355 for the rest of the season. The second year, at $874,363, will initially be 25 percent guaranteed while the third year, at $1.0 million, will initially be non-guaranteed.

Miami leveraged a small portion of its remaining taxpayer mid-level exception to complete the long-term signing (in much the same way as it previously did with second-round draft pick Josh Richardson).

The Heat quickly identified Weber, a defensive-minded guard in the mold of former Heat guard Patrick Beverley, as an attractive prospect after he went undrafted in June because of reconstructive surgery following a devastating right knee injury in which he tore the ACL, MCL and meniscus in his right knee in January of last season at Virginia Commonwealth.

Despite going undrafted, Weber attracted interest from more than half the league. But he kept close ties with the Heat organization. In September, he failed a physical with the team prior to the start of its training camp. However, the Heat nonetheless signed him to a training camp contract on October 19, then waived him five days later so that it could direct him to its D-League affiliate.  Read more…

The Miami Heat scouting and development machine continues to amaze, having churned out yet another talented prospect at a point in time in which the team needs it most.

With the Heat handcuffed in its ability to execute any roster-building trade scenarios for more than a year by a lack of tradable assets, and possessing just three total draft picks over the next six years (the bare minimum possible under NBA rules), Josh Richardson, its 2015 second-round pick, has transformed himself into a crucial roster component, validating the first-round grade placed upon him by general manager Pat Riley.

Richardson was rated 24th on the team’s draft board. The Heat snagged him with pick No. 40.

Richardson is the latest in a string of unlikely success stories that also includes undrafted guard Tyler Johnson and banished former second-round draft pick Hassan Whiteside. The prospect for success on players selected at such levels across the NBA is notoriously low, yet the Heat appears to have converted an unprecedented triple play which has the potential to lead it to a promising future.

Richardson’s story has been particularly unlikely. Not highly touted out of high school in 2011. An adequate four-year college career at Tennessee, after which most draft analysts had him being selected late into the second-round if at all. The victim of a roster crunch with the Heat that could very easily have left him without NBA work. An uninspiring first half of the first year of his pro career, during which he shot just 25.9 percent from the floor while being shuffled back and forth between Miami and Sioux Falls.

His emergence was borne primarily out of necessity. After the trade of Mario Chalmers and subsequent injuries to Tyler Johnson and Beno Udrih, Richardson’s minutes have started to soar. He now ranks seventh overall among rookies in minutes played since the All-Star break, 395, and first among second-round draft picks.

Still, to get those minutes in the game’s best league, one has to earn it.

Richardson has done just that — leading all NBA players in three-point shooting since the All-Star break at 64.1 percent, including an 83.3 percent mark versus tight defense and 60.6 percent when open. He’s hit at least one three-pointer in each of the last 10 games.  Read more…

The NBA and National Basketball Players Association have agreed to shorten the league’s moratorium period by five days for next season, according to a memo sent from the league office to its member teams on Thursday evening.

It will now last six days, from July 1 to July 6, with free agency beginning on July 7.

Both the NBA and the union had to agree to the change, since the moratorium rules fall under the Collective Bargaining Agreement, an agreement which, as the name states, was collectively bargained. The agreement had called for the moratorium period to run from July 1-11 in 2016.

While teams can still sign their first-round draft picks and players to minimum salary contracts of up to two years in length, and make a few other specific moves that are not impacted by the salary cap, most transactions are prohibited during the moratorium period, including trades and most free-agent signings.

The change was surely inspired by DeAndre Jordan’s notorious free-agent flip-flop last summer that saw the center commit to sign with the Dallas Mavericks on July 3, only to renege on the verbal deal five days later and instead choose to re-sign with the Los Angeles Clippers. Clippers ownership, management and players converged on Jordan at his family’s home in Houston and helped change his mind, then stayed with him for the final hours until the signing could be made official at 12:01 am on July 9, effectively blocking the Mavericks organization from re-gaining access to him.

Technically, even verbal agreements aren’t allowed during moratorium. In theory, then, Jordan didn’t renege on the Mavericks. In practice, however, such verbal agreements are commonplace as early as July 1.

The rule change for next season allows players and teams to execute agreed-to deals faster, and is designed to help reduce second-guessing scenarios such as that with Jordan.

It does, however, come at a minor potential risk.  Read more…