Some Kawhi Thoughts

This is an email to a friend, not a post.

Ok. Here’s a small breakdown on what the Heat would face to sign Kawhi…

Kawhi’s max for 2021-22 is $39M. He can take as little as $34M, and still re-sign for the $41M max in 2022-23. So perhaps it’d be safe to say we’re dealing with a first-year salary range of $34M – $39M.

There are two approaches the Heat can take to acquire him: (i) sign him into Cap Room, or (ii) execute a Sign & Trade with the Clippers.

Cap Room:

If the Heat trade away absolutely everyone except for Jimmy Butler and Bam Adebayo, they’d be left with $34M of cap room. Keeping Tyler Herro would subtract another $3M. Keeping Duncan Robinson and/or Kendrick Nunn would subtract as little as $1M each. So you can play with which of the three you want to keep and calculate the resulting cap room; keeping all three would leave the Heat with up to $29M.

Even if the Heat could fit Kawhi into this cap room, they’d have limited resources with which to fill out the rest of the roster (basically just the $5M R-MLE). That means no Oladipo (unless he takes the $5M or less), or any other high-priced free agents. But the upshot is that the act of trading everyone away to create the room could generate some nice future assets.

This would be the best alternative for the Heat if it’s possible, particularly if they could retain Herro and Robinson. But do you really see Kawhi taking a starting salary of just $30M? That’s $9M less than his max for next season, and it also means that he’d need to take at least $5M less than his max the following season. That’s a huge sacrifice.

(You’re well aware of how strongly I disagreed with how the Heat chose to structure the Jimmy Butler trade; well, Ryan Anderson’s awful $5.2M dead-money cap hit is a key reason why this isn’t a realistic alternative… Then, of course, there’s the $12.8M of cap room the Heat surrendered by offering Bam the max a year earlier than necessary; if they had waited, Bam would’ve had the exact same payout and the Heat would’ve been able to sign Kawhi at the max, keep the entire rest of the roster intact (Butler, Bam, Herro, Achuiwa and Okpala), re-sign both Robinson and Nunn, and still had the $5M R-MLE to deploy (making the Heat already nine deep right there).

Sign & Trade:

There are three issues the Heat would need to deal with in a S&T scenario:

1. It requires the Heat give up assets to entice the Clippers to do it.
2. It requires the Heat to send back salaries totaling 80% of Kawhi’s salary.
3. It hard-caps the Heat at a team salary of $143M.

For the first issue, if you’re the Clippers, what would you ask for to facilitate giving Kawhi to the Heat? Multiple future first round picks? Tyler Herro? Duncan Robinson? More?

For the second issue, the Heat would need to send back $27M – $31M in salary to get Kawhi at a first-year salary of $34M – $39M. Let’s set aside whether the Clippers (or any other team) would want the players that make up that salary for a second, and instead focus on how the Heat even gets $27M – $31M in tradable salary. The only tradable players they’d have under contract are Herro, Precious, and Okpala; that’s $8M. There’s two primary ways they can get the other $18M – $23M:

• Exercise the team options of Dragic ($19M) and/or Iggy ($15M)
• Sign-and-trade some of their own free agents

Exercising Dragic’s team option adds $19M, enough for the Heat to acquire Kawhi at a first-year salary of up to $35M. Exercising both Dragic and Iggy adds $34M, far more than enough to acquire Kawhi at the max. But, to take this approach, the Heat would need to exercise those options, bypassing cap room, before the summer even begins, and before they know if Kawhi is even a possibility.

Signing-and-trading their own free agents obviously requires the players to agree to be S&Td, and, whether it’s the Clippers or any other team, the receiving team would need to agree to be hard-capped at $143M. But the good news is that, if you can get past all that, the Heat would have plenty of options to get the extra $18M – $23M (or even the full $34M – $39M). Oladipo can be S&Td for up to $25M before running into BYC issues. There’s also Dragic, Iggy, Ariza, and Bjelica. There’s also Robinson and Nunn, for whom the Heat wouldn’t run into BYC issues if they are signed into cap room. Which, for example, would mean that a hypothetical package of Herro, Robinson and Nunn, with the latter two splitting $28M, which is within the Heat’s max available cap room, would, from a trade math perspective, get it done. The S&Td contract(s) would need to be 3-4 years long, but only the first needs to be guaranteed.

Which approach the Heat would take to get the extra $18M – $23M (or the full $34M – $39M) depends upon how they view next summer’s free agent class. Is there a player out there who is worth more than $10M (the most they’d be able to offer by staying over the cap and using the NT-MLE) and less than $29M (the most they’d be able to offer with cap room, while keeping the core together)? If not, there’s little harm in exercising Dragic’s and/or Iggy’s options. If so, they may want to preserve their cap room rather than giving it all up to get a bit of extra flexibility for what has to be considered a highly unlikely acquisition of Kawhi.

(You’re well aware that, for me, the answer to this question is yes. A few guys the Heat should consider, who could fall in that range, are Lonzo Ball, John Collins, Lauri Markkanen and Bobby Portis. (None of them, however, are as dynamic as the Christian Wood and Nerlens Noel combination I described for that I would’ve targeted last summer, if the Heat hadn’t given Iggy his awful extension.)

For the third issue, 14 players can only make up to $143M. Butler + Bam + dead $ = $69M. The minimum the other 12 players can make is $2M… The rest is basic math. For example, if you pay Kawhi $39M and the other 11 players need to get at least $2M, there’d be an extra $16M left over to allocate. If you give all of it to Oladipo, he could get $2M min + $16M extra = $18M total. If you forget about Oladipo and instead keep Herro (assuming the Clippers don’t demand him), he only makes $2M over the minimum, so there’d be $14M left. If you then re-sign Robinson at say $12M, that’s $10M over the minimum, so there’d be $4M left. Etc. And if Kawhi takes less than $39M, the $16M left over increases dollar-for-dollar.

What It All Means:

Using Cap Room is clearly preferrable, but unlikely. The Heat just don’t have enough cap room to make it work. They’d need to gut the team (outside of Jimmy and Bam) to make an offer palatable to Kawhi, and he’d still need to take at least a $5M discount to make it happen.

Using a S&T structure would be more costly, but also more likely. The Clippers would certainly try to gouge the Heat to facilitate the trade, but Kawhi would be able to get up to his $39M max, and the Heat might have a decent shot to retain some of their players around him, Jimmy and Bam. If they’re super creative, they might even be able to pick up some nice trade exceptions for departing players along the way.

So acquiring Kawhi is clearly possible, and some scenarios are actually quite exciting (e.g., a Herro-Robinson-Butler-Kawhi-Bam starting five). But it’d be very challenging, and it’s far more likely that he simply re-signs with the Clippers for the full max and stays in a city he apparently loves. Even if he does entertain the idea of coming to Miami, the Clippers have a huge built in advantage — the most the Heat could possibly offer is $169M over 4 years, while the Clippers could offer $228M over 5 years. That’s an extra $52M over one extra year for staying in L.A., which may not be easy to recoup at age 34 (though if I’m the Heat, and I were trying to be super-creative to counteract that, I might offer a shorter-term contract that allows him to re-sign with the Heat sooner, and lock in more years on the back-end; or give him the full 4-year max, and offer him an extension in just two years).