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.
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…
The Miami Heat have made the first use of their NBA D-League affiliate after purchasing operational control this season, with Tuesday’s questionable signing of swingman DeAndre Liggins of the Sioux Falls Skyforce to a 10-day contract.
Liggins had been playing with the Skyforce as an unaffiliated player, and was free to sign with any NBA team.
The 6-foot-6-inch, 209-pound Chicago native was originally recruited out of high school as a point guard by the University of Kentucky for the incoming class of 2008. He spent his first two years mostly coming off the bench, but in his junior year, coach John Calipari decided to start him as a shooting guard. After his junior season, he elected to enter the 2011 NBA Draft.
Liggins was selected with the 53rd overall pick by the Orlando Magic. He spent the year with the Magic on a one-year minimum salary contract, barely playing. He went on sign with the Oklahoma City Thunder for the 2012-13 season, during which time he had multiple assignments with the D-League’s Tulsa 66ers. Read more…
The Miami Heat have dumped the contract of Roger Mason Jr. at the Feb. 20 trade deadline, in a move that saves owner Micky Arison $1.05 million and opens up a roster spot to utilize either on a current free agent or on a player to be waived over the next 10 days.
The Heat will send Mason Jr. to the Sacramento Kings, who are expected to immediately waive him. They’ll also send $786,095 in cash to complete the deal.
While that amount of cash may seem random, it actually isn’t.
Mason Jr. is a 10-year N.B.A. veteran. He is playing under a one-year contract. He is earning $1,399,507, the minimum salary for a player with his tenure. However, he is only required to be paid $884,293 of that amount, equal to the minimum salary for a two-year N.B.A. veteran. The league will reimburse the rest at the end of the season. Therefore, he really only costs the smaller amount, and only the smaller amount is included in team salary for cap and tax purposes. They do this so teams won’t shy away from signing older veterans simply because they are more expensive than younger veterans.
As for the mechanics of how the reimbursement works, he is to be paid his full prorated salary of $8,232.39 per day (equal to his $1,399,507 salary divided by the 170 days in the regular season), until the total reaches $884,293. At that point, he continues to get paid his fully prorated salary but the league reimburses the rest. With the regular season having started on Oct. 29, he earned that much by Feb. 13, 2014. Since that time, his services have essentially been free of charge for the Heat.
However, since the contract has now been traded, the reimbursement will get allocated to the respective teams based on the number of days accrued with each team. Therefore, while the Kings will be responsible for the $452,782 remaining on his contract for the 55 days left in the regular season, they will actually only owe $286,095 after accounting for the reimbursement.
The Heat essentially covered his remaining salary obligations for the Kings, and then topped it off with a $500,000 profit, which serves as the only impetus for Sacramento to make the deal.
In order to send something back, which is required in all trades, the Kings will return the Heat a 2015 second-round pick which is protected for selections 31-49 and 56-60. If the pick ultimately falls within either of its protected ranges and is therefore not conveyed, then Sacramento’s obligation to Miami will be extinguished. This essentially means that the Heat will only get the pick if it lands between pick numbers 50 and 55.
While this range may seem random, it actually isn’t.
The Kings intended to provide enough protection on the pick to ensure that it will never be received. Such trades are commonplace in the N.B.A., and are typically accomplished by trading away a second-round pick on condition that it lands within the last five of the draft. However, the Kings have previously traded the pick to the Boston Celtics with that condition. So, now, the Celtics will receive the pick if it is among the last five, the Heat will receive the pick if it is among the previous five, and the Kings will retain the pick if it is among the first twenty of the second round, as is likely. Read more…
Update (June 7): The Bulls didn’t follow my advice. They did waive Erik Murphy as I speculated. But they added more players too quickly, and ended up rolling the dice with regard to the bonuses of Joakim Noah and Taj Gibson. Noah made All-NBA First Team, and earned his $500,000 bonus. Gibson didn’t make the All Defensive First or Second Teams. As a result, the Bulls missed the tax by just $291,164.
This post has nothing to do with the Miami Heat but I, as a salary cap person, love intricate luxury tax maneuvering. The situation described herein is about as fascinating as it gets for me. It should be noted that the idea for this post was not my own. It stemmed from an incorrect post I read elsewhere, for which I happily provided the correction, and then decided to write a unique version for myself, with my own story line, and drawing my own conclusions. This post is long and it’s tedious, but the end result is utterly spectacular (well… spectacular for people who are amazed by how teams maneuver around luxury tax issues).
Most of us assumed that when the Chicago Bulls acquired the contract of the unremarkable Andrew Bynum in trade last month, it was to drop them below the luxury tax.
It was. But the process has been far more complicated than most of us, apparently including Bulls management themselves, realized.
For a long time, it appeared as if Bynum would be shipped off to Los Angeles, so that the Lakers could capitalize on his unintendedly valuable contract.
The nature of Bynum’s contract essentially meant that he was auditioning for the Cleveland Cavaliers from the date he was signed on July 19 all the way through the guarantee deadline on January 7, an audition he failed. Bynum’s deal called for a $12.25 million salary this season, of which only $6.0 million was guaranteed. Next season’s salary of $12.54 million was fully unguaranteed. Therefore, a two year contract was really just a six month commitment. But it also meant that any team which acquired his $12.25 million salary in trade could immediately thereafter terminate his contract, thus reducing his salary and resulting cap charge from $12.25 million to $6.0 million.
The Lakers have been luxury tax payers for six straight seasons. They were in position to leverage that $6.25 million delta to sneak below the tax for this season, producing huge up-front savings. And because they are unlikely to be taxpayers next year as they tear down their roster and rebuild, two consecutive years below the tax would have had an added benefit – no “repeater taxes,” which are paid by taxpaying teams that were also taxpayers in at least three of the previous four seasons, for the Lakers for the entire life of the current CBA, which will almost certainly be terminated after the 2016-17 season.
It was a potentially massive financial windfall for the Lakers at a cost of just the expiring contract of Pau Gasol (and another irrelevant throw-in to make the math work).
The Cavs had been after Gasol since this past summer, when they had extensive discussions with the Lakers, and were more than eager to make the swap. But the Lakers were demanding more for Gasol than just the massive financial savings. The Cavs refused.
That’s when the Bulls swooped in. Read more…
The Feb. 20 N.B.A. trade deadline is now officially less than a month away.
The Miami Heat started their dealings early this season, shipping Joel Anthony to the Boston Celtics along with a million dollars and two draft picks (one second-rounder and another that was originally Philadelphia’s and will likely become a pair of second-rounders). In return, the Heat got a player from Golden State, but this deal wasn’t about Toney Douglas as much as it was about the benjamins.
Anthony, who lost his role to Chris Andersen last season and had been a reclusive presence on the court ever since, ultimately became a casualty of the Heat’s cash crunch and managing partner Micky Arison’s desire to creep closer to the luxury-tax line. He didn’t get there, not with this deal, but it did save him around $20 million, and it did eliminate one of the obstacles to reshaping the roster after this season, when LeBron James, Dwyane Wade and Chris Bosh can all opt out of their existing contracts.
Now, it’s conceivable that only Norris Cole ($2.0 million) and Udonis Haslem ($4.6 million option) will be under contract on July 1, as Arison, Pat Riley and the Heat try to retain James, Wade and Bosh, and perhaps Mario Chalmers, Ray Allen, Michael Beasley and even Greg Oden.
That’s the long-term vision.
The short-term? The trade did nothing to advance the cause. The Heat, championship material as they are currently constructed, nonetheless have various needs that have yet to be addressed. Read more…
The Miami Heat have traded center Joel Anthony to the Boston Celtics, as part of a three-team deal, in exchange for guard Toney Douglas from the Golden State Warriors.
The Heat also sent the Celtics $1 million in cash and a pair of draft picks to complete the deal: A 2016 second-round pick and a lottery protected first-round pick originally acquired from the Philadelphia 76ers that will become a pair of second-rounders in 2015 and 2016 if the Sixers fail to make the playoffs this season and next.
The trade isn’t about Joel Anthony and isn’t about Toney Douglas.
It’s also not about Greg Oden, who appears to be on the verge of moving into the Heat’s rotation, or about Andrew Bynum, and how money freed up from today’s trade might make such a signing more financially palatable.
This past summer, it was the amnesty release of Mike Miller. Then it was declining to utilize the mid-level exception. Now it’s moving Anthony’s untenable contract off the books, a move, when accounting for his 2014-15 salary will save the Heat at least $20 million. Read more…
In a move that has the Chicago Bulls thinking about the future but could have major implications for the Miami Heat in the present, the Bulls executed a significant trade with the Cleveland Cavaliers Tuesday morning. They sent forward Luol Deng to the Cavs in exchange for center Andrew Bynum, three future draft picks and huge payroll savings.
The Bulls get a first round draft pick owed to the Cavs by the Sacramento Kings, which is top-12 protected in 2014, top-10 protected from 2015 through 2017, and, if not conveyed, converts to a 2017 second round pick if it is in the top 55 and nothing if not. They also get second round picks in 2015 and 2016, acquired by the Cavs from the Portland Trail Blazers. Finally, the Bulls will be able to swap positions with the Cavs in the first round of the 2015 draft as long as the Cavs’ pick is outside the top 14.
In addition to the draft picks, the Bulls will recognize huge payroll savings because Bynum’s current $12.25 million salary is only $6 million guaranteed. The trade will cut about $7.8 million off their cap and get them out of the tax. Chicago will save about $6.8 million in salary payouts and $12.3 million in taxes, as well as qualify for a tax distribution (paid to teams below the tax from half of the tax proceeds of teams above the tax) currently estimated at $3.2 million. That’s more than $22 million in instantaneous savings(1).
In order to recognize the savings, the Bulls will terminate Bynum’s contract shortly. He’ll then be placed on waivers at 5:00 pm, where he’ll remain for the following 48 hours, during which time other teams may assume his contract. No team in the league has the necessary cap space (or a large enough trade exception) to claim him. At 5:00 pm on Thursday, Bynum will become an unrestricted free agent.
Rumor has it that he wants to join the Los Angeles Clippers or the Heat.
Should the Heat be interested? Absolutely! Read more…
The date in which all N.B.A. contracts become fully guaranteed for the rest of the season, Jan. 10, is looming. That leaves the Heat with a decision to make on the non-guaranteed contract of Roger Mason Jr.
Mason Jr. plays a somewhat valuable role for the Heat as a versatile three-point shooting specialist who serves as the team’s third string option at both the point and shooting guard positions. But he (along with Michael Beasley, who has undoubtedly earned his keep), is also the only player who has a less than fully guaranteed contract.
Mason Jr. is a 10-year N.B.A. veteran. He is playing under a one-year contract. He is earning $1,399,507, the minimum salary for a player with his tenure.
When a player has been in the N.B.A. for three or more seasons and is playing under a one-year contract at the minimum salary, the league reimburses the team for part of his salary – any amount above the minimum salary level for a two-year veteran. As a result, the Heat is only responsible for $884,293 of his salary, equal to the minimum salary for a two-year veteran. The league will reimburse the Heat for the rest at the end of the season. Therefore, if Mason Jr. plays out his contract, he really only costs the Heat the smaller amount, and only the smaller amount is included in team salary for cap and tax purposes. They do this so teams won’t shy away from signing older veterans simply because they are more expensive than younger veterans.
As for the mechanics of how the reimbursement works, the Heat is responsible for Mason Jr.’s full prorated salary of $8,232.39 per day (equal to his $1,399,507 salary divided by the 170 days in the regular season), until the total reaches $884,293. At that point, the league reimburses the Heat for the rest. With the regular season having started on Oct. 29, he will earn that much by Feb. 13, 2014. His services from that point on essentially become free of charge.
However, if the Heat want to capitalize on his non-guarantee, they will have to waive him by no later than 5 p.m. on Jan. 7. That’s because all non-guaranteed contracts across the N.B.A. will become fully guaranteed on Jan. 10, so a player needs be gone by no later than Jan. 9 to avoid the guarantee and it takes 48 hours for a waived player to actually clear waivers. Players continue to get paid while they are on waivers.
By that time, Mason Jr. will have already earned $600,965 on his contract. Therefore, if the Heat were to waive him on Jan. 7, they’d be saving a total of $283,328. When including the tax, given the Heat’s current tax position, that amount rises to $991,649.
The Heat is already spending $110,077,842 on player payroll obligations this season, an amount at which the team presumably isn’t anywhere near profitable, so, to some extent, every dollar counts – particularly a million of them.
However, there is some degree of financial justification not to waive him in order to capitalize on his partial guarantee. Read more…
Dwyane Wade has already missed five of the Miami Heat’s first twenty games this season.
The Heat have a lot of legitimate concerns over the health of Wade – he hasn’t been healthy, really, in any of the last three postseasons; he is still recovering from offseason OssaTron treatments to deal with tendinitis in both of his knees, long after the typical recovery timeframe for such procedures; he is in the early stages of a season-long maintenance program designed to treat and preserve his troublesome knees; and they have no good indication of how his thirty-something body will hold up over the rigors of an eight-month NBA season.
They also understand that flipping one of the team’s centerpiece performers in and out of what has become a flotsam of rotations is sending the Heat into a rhythmic chaos.
The Heat over the last two seasons reinvented themselves as a small-ball scoring machine built upon killer shooting, intricate motion offense, and a furious trapping defense. Battier spotted up for 3s and guarded power forwards so LeBron wouldn’t have to, Bosh stretched his range, the read-and-react playbook expanded, and Miami became unguardable.
Now they’re scrambling to maintain any semblance of consistency. They have just a single reserve shooting guard, Ray Allen, on the whole of the roster. Coach Erik Spoelstra has compensated for uncertainty on the perimeter by playing Norris Cole and Mario Chalmers together more, an ultra-small look that could prove untenable as time marches on. LeBron James has played about as many minutes without Wade this season as with him.
The Heat, simply, has no continuity. And so, with no clear alternative, the Heat have initiated trade talks seeking backcourt help. Read more…
Despite his passion for the game, Dwyane Wade was not much more than an average basketball player as a youngster. Initially, he made a bigger impression on the football coaches at H.L. Richards High School in Oak Lawn, on the South Side of Chicago, than he did on basketball coach Jack Fitzgerald’s squad.
A gritty cornerback and wide receiver, Wade showed promise on the gridiron, but he couldn’t kick his obsession for basketball. He idolized former Chicago Bulls star Michael Jordan. So he spent his second season with the Bulldogs on the sophomore basketball team.
Determined to earn time on the varsity squad, Wade worked out rigorously before his junior year in the summer of 1998, improving his ball-handling skills and his outside shot. Wade’s body cooperated, too, as he shot up four inches to six-feet, two-inches tall.
Always a tenacious rebounder, Wade now had the size and skills to excel in all phases of the game. Recognizing an emerging star, Fitzgerald made the junior his go-to guy. Wade did it all for the Bulldogs. If Richards needed to break the press, Fitzgerald put the ball in Wade’s hands. If the team needed a hoop in close, Wade got the ball in the post. For the year, he averaged 20.7 points and 7.6 rebounds, and opened eyes all around Chicagoland.
He responded to the extra attention with an even more marvelous senior season. Wade went for a double-double almost every game that year, averaging 27.0 points and 11.0 rebounds while leading his team to a 24-5 record and a berth in the round of 32 (the title game of the Eisenhower Sectional) of the 256-team 1999-00 Illinois High School Association (IHSA) Class AA State Championship (though without the acclaim of former Heat player Patrick Beverley, who made it all the way to the final four with his Marshall high school team in 2005-06, or Derrick Rose, who won it all with his Simeon high school team in both 2005-06 and 2006-07). Wade set school records for points (676) and steals (106) in a season that year.
The college scholarship offers didn’t come pouring in, though.
Wade dreamed of playing for Michigan, inspired by the Fab Five. But some of the schools looking at Wade, Michigan included, stopped looking when his first ACT score was low. Fearing he wouldn’t be able to cut it academically, most backed off.
“My first set of scores wasn’t bad,” Wade said. “They were disastrous. They sucked.”
Due to his academic problems, Wade was recruited by only four college basketball programs for the incoming class of 2000 – DePaul, Illinois State, Bradley and Marquette. Each remained interested in Wade even though he struggled to get his ACT up to the qualifying standard. In three tries, he never did.
The Golden Eagles nonetheless accepted Dwyane as a partial qualifier, meaning he could practice with the basketball team as a freshman but not suit up for games due to a lack of compliance with the NCAA’s Proposition 48.
Academically ineligible for play during his freshman year at Marquette, Wade sought tutoring to improve his writing skills in order to regain eligibility. When he became eligible to play the following year (2001–02), he led the Golden Eagles in points (17.8), rebounds (6.6), assists (3.4), steals (2.5) and blocks (1.1), and guided the team to a 26-7 record and its first NCAA tournament berth since 1997.
Wade had displayed not only perseverance but also toughness, playing the latter half of the season through injury. After the season, in March 2002, Wade underwent arthroscopic surgery on his left knee to deal with a small tear in his lateral meniscus. The torn portion of the meniscus was removed, and Wade was back on the court training for his junior year within weeks. Read more…