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Posts Tagged ‘Udonis Haslem’

Miami Heat Create NBA-Record $55 Million in Potential Cap Space

June 29th, 2014 5 comments

Many years from now, Saturday, June 28, 2014, could be remembered as a critical day in Miami Heat history. It marks the day when guard Dwyane Wade and forwards Chris Bosh and Udonis Haslem declared their intentions to join LeBron James and Chris Andersen in opting out of their contracts. It could ultimately mark the day in which the destruction of the Big Three era was initiated in earnest, or the day in which the remodeling of Pat Riley’s two-time championship-winning creation received a major boost.

Agent Henry Thomas, who represents all three players, has reportedly informed Heat president Pat Riley of their choices. Wade will exercise his Early Termination Option for the remaining two years and $41.8 million on his contract, Bosh will do the same for the two years and $42.7 million remaining on his contract, and Haslem will not exercise his player option for the lone season remaining on his $4.6 million contract.

Technically, there is no mechanism to notify the league that an option or ETO will not be exercised. Since the contracts of Wade and Bosh contain ETOs for this summer, they are required to inform the league of their intentions. Since Haslem’s contract contains a player option, he need do nothing but wait.

These actions, particularly in the wake of James, Wade and Bosh meeting last week on Miami Beach, make it rather clear that the Heat’s stars, as well as its supporting players, have decided to work together to provide the Heat the salary-cap flexibility with which to add additional components to a roster that earlier this month lost in the NBA Finals to the San Antonio Spurs, cutting spectacularly short the 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.

Without the opt-out decisions, the Heat would have gone into the offseason far in excess of what is projected to be a $63.2 million salary cap for the 2014-15 season, and without much ability to materially improve. Instead, the moves enable the Heat to create as much as an all-time NBA-record $55 million in cap space with which to reconfigure the roster(1).  Read more…

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

February 27th, 2014 No comments

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

Riley reportedly rejected.

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

The Mechanics

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

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

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

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

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

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

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

Categories: Commentary Tags: ,

Everything is Done: How Did It All Happen?

July 17th, 2010 5 comments

The Miami Heat finished last season with 16 players under contract and a team salary far in excess of the salary cap. They then created enough salary cap room to sign everyone who is on the roster today. Now they are far in excess of the salary cap once again.

So how did it all happen? How did they manage to get so far below the salary cap and then above it again all in the same season? With creative financing!

Everything has now been finalized. It’s done. Here’s a step-by-step breakdown.

(Note: The actions below, in some cases, may be out of order. They have been structured so as to make evident the Heat’s thought process along the way, as well as to promote ease of reader comprehension. Full comprehension also requires an understanding of cap holds and roster charges, which are described in detail here.)

This is a snapshot of the Heat’s salary cap situation at the end of last season:

Read more…

More on Udonis Haslem’s Contract

July 12th, 2010 11 comments

Per Ira Winderman of the South-Florida Sun Sentinel:

Udonis Haslem will be back with the Miami Heat next season.

The veteran power forward confirmed his return Monday afternoon to the Sun Sentinel in a text message that read: “Turned down full mid level from Dallas and Denver. See u next season.”

Instead of packages from other teams that could have reached $34 million over five seasons, Haslem, 30, is expected to sign off on a four-year Heat package at about a third of that total, although details still are being sorted out.

With the Michael Beasley trade official, it would now appear that the contracts of both Udonis and college roommate Mike Miller can be finalized.

Of note is the final quoted paragraph above, in which it is suggested that Haslem is expected to accept a package worth approximately one-third that of a full Mid-Level Exception deal. I would be shocked if this were true.

A full mid-level deal would pay Haslem exactly $33,437,000 over five seasons. One-third of that value is just $11,145,667. Spread over four years, that implies a starting salary of $2,487,872. I have previously suggested an alternative which could pay UD around $20 million over five seasons (60% of such an MLE deal), which seems much more palatable to all parties involved. Time will tell.

In any case, Miller and Haslem will split 8.5 million 2010-11 dollars. Each would be eligible to receive 8.0% annual, non-compounding raises for up to five total seasons.

This is not the first time Udonis has provided a hometown discount. Only days into the July 2005 negotiation period with the Heat, Udonis agreed to a five-year, $30.25 million mid-level contract. After completing the negotiations, Jason Levien, Haslem’s agent at the time, estimated that he left around $10 million on the table in order to meet Haslem’s hometown wishes.

These are rare and altruistic acts for a player in the me-first world of professional sport.

Categories: Commentary Tags:

It’s Official!!!

July 9th, 2010 8 comments

With 13,000 Heat fans anxiously waiting in AmericanAirlines Arena to welcome its newest trio of superstars, Dwyane Wade, LeBron James and Chris Bosh were upstairs finalizing their contracts. Minutes later, they emerged through a cloud of Canes-like smoke… along with some unexpected news. Udonis Haslem is returning to join the party.

Haslem’s commitment was, needless to say, a shocking revelation. Even I had previously reported that Udonis would not be back. The Heat was out of cap space, the team was unable to utilize his Bird rights, and he was not about to sign for the league minimum.

So, how was it possible?

In short, the triumvirate agreed to reduce the value of their contracts. And Riley turned around and utilized the recovered cap space to secure the beloved power forward, as well as newcomer Mike Miller.

But why would they so drastically reduce their salaries? Well, pure generosity. Udonis and Mike are friends of the Big Three, and the Big Three did right by their friends in their desire to put together a championship-caliber roster and close-knit team.

How much did they sacrifice? Let’s take a look. Read more…

Q&A: Under-the-table-agreements

May 27th, 2010 No comments

The following question to Ira Winderman has piqued some interest from my shockingly tiny reader base:

“In all your posts, you are undermining and flat out discarding one very real possibility for the Heat to round out the roster. That is, for veterans like U.D., J.O. and Q, and even possibly Dorell, to sign a one-year minimum deal and keep their Bird Rights.”

It is easy to understand the connotation behind this question, though it is not explicitly stated. The concept would be for the Heat to sign any or all of the players mentioned to one-season minimum contracts. Doing so would allow the Heat to maximize cap space this summer and, with Bird rights intact, exceed next year’s salary cap to grant them significant raises for their troubles.

While this is quite a creative concept, the premise is inherently flawed.

This approach is illegal. Teams are not permitted to make direct agreements with a player that are not reported to the league. If they do, the penalties can be severe. Such a violation is considered by the league to be among the most serious a team can commit. A violation can result in a fine of up to $5.0 million, forfeiture of draft picks, voiding of the player’s contract, and/or the suspension for up to one year of any team personnel who were involved. In addition, the player himself can be fined up to $100,000, and prohibited from ever signing with that team.

You might be saying to yourself that the easier solution would be to report the agreement to the league in order to avoid any allegations of wrong-doing. Future contracts, however, are also illegal.

You might also be saying to yourself the league would never find out. This is very risky business – particularly for complementary players – with the penalties being so severe.

In the summer of 1999, the Minnesota Timberwolves tried this approach with Joe Smith. Smith left the Philadelphia 76ers to sign with the Timberwolves. The two sides made an under-the-table agreement that Smith would play under three consecutive one-year contracts at below market value ($1.75 million, $2.1 million and $3.6 million), and the Timberwolves would reward him by using their Bird rights to sign him to a much larger contract beginning with the 2001/02 season (reportedly worth between $40 and $86 million over seven years, dependent on performance clauses).

The league discovered the arrangement the following season, and responded by fining the team the maximum (at the time) $3.5 million, taking away their next five draft picks (two were later returned), and voiding Smith’s then-current contract. Owner Glen Taylor and GM Kevin McHale also agreed to leaves of absence (in lieu of suspensions). Most interestingly, the league also voided Smith’s two previous, already-completed contracts. This essentially stripped the Timberwolves of any Bird rights to Smith.

If Riley were to be found in violation, leniency would not be something that would be afforded. Pat has a history of violations of league rules. Read more…