LAS VEGAS – More than one week into the start of a new NBA fiscal year and, as expected, the Miami Heat remain the same team they were when free agency kicked off July 1.
The Heat are one of the handful of teams who have yet to make a move since the calendar turned to July. The only announcement coming from the Heat in recent weeks was the signing of forward Derrick Jones Jr. to a standard NBA contract.
But any future moves by president Pat Riley will be made with the luxury tax in mind. With about $120 million committed to 11 players for the upcoming season, Miami is about $4 million away from crossing that luxury tax threshold and that is something the Heat would like to avoid, especially for a team that is not a contender.
The luxury tax comes into play in several scenarios.
The Heat are one of three teams that have been linked to Carmelo Anthony, who will part ways with Oklahoma City. If the Thunder is unable to trade Anthony, who is due $27.9 million this season, he could be available for a minimum contract. The Heat’s issue is two-fold: Where would Anthony fit in with a roster that is deep with rotational players and where does Miami stand with Wayne Ellington?
Ellington remains a free agent, and the top unrestricted free agent according to some. The fact that Ellington, one of the top 3-point threats in a league that values 3-point shooters, remains on the market is surprising. The Heat could still be hoping to make a trade to shed some salary to bring back Ellington at a higher price (but certainly not close to the $10.9 million they could pay him). If not, will Ellington settle for something close to the $6.3 million he made last season, whether it is with the Heat or another team?
For every dollar the Heat exceeds the $123.733 million luxury tax threshold up to $4,999,999 they pay a tax rate of $1.50. From $5 million to $9,999,999 over they pay a tax rate of $1.75, from $10 million to $14,999,999 they pay a tax rate of $2.50.
If the Heat matches Ellington’s contract from last season and pays him $6.3 million, he would in essence cost them about $9.8 million because of their luxury tax bill. If they were to give him his max of $10.9 million he would cost them more than $23 million.
That is not happening.
And remember, money has dried up around the league. Just three teams – Atlanta, Brooklyn and Sacramento – have space remaining of any significant. With all three building with youth, it is unlikely they would have a need to sign the 30-year-old Ellington?
One caveat: Every team has until the end of the season to get back under the luxury tax line. So, Miami could be willing to go over that line at the start of the season to a certain point with the confidence they can make moves by the trading deadline to get back under.
Other things to watch as the summer progresses when it comes to the Heat:
Kawhi Leonard: This story will not go away even though many believe Leonard could play out the year in San Antonio. Still, talks can continue for months, which means we will be hearing Leonard rumors throughout the summer. Whether the Spurs turn to the Heat and the Heat are willing to give up most of their good young players remains to be seen.
Dwyane Wade and Udonis Haslem: Both players are contemplating retirement and the Heat are awaiting their decisions. Haslem would return on a $2.4 million veterans minimum and the Associated Press reported Wade is seeking the Heat’s $5.4 million mid-level exception. That decision could be tied to what happens with Ellington and any luxury tax implications.
Hassan Whiteside: It is looking more and more unlikely that the Heat are able to move Whiteside and the remaining $52.5 million on his contract. Two teams that could have been trade partners for a 7-foot center came off the board this weekend. The Trail Blazers brought back Jusuf Nurkic on a four-year, $48 million contract on Saturday and today it is being reported the Bucks are signing Brook Lopez to a one year deal.
Veteran minimums: The Heat already have too many rotational players but Riley still will look for any bargains that might fit this roster. And several intriguing names remain on the market including Parker, Marcus Smart, Isaiah Thomas and Rodney Hood. Parker, Smart and Hood are restricted. The possibility of any landing with Miami is remote unless moves are made to free up cap and roster space.
If you weren’t able to ask a question this time, send your questions for future mailbags via Twitter (@Anthony_Chiang and @tomdangelo44). You can also email me at firstname.lastname@example.org.
@adrianw743: What’s a fair offer for Jimmy Butler?
Anthony Chiang:It all depends on whether Jimmy Butler would commit long-term to the Heat. This is very much like the Kawhi Leonard situation. According to a recent report from the Chicago Sun-Times’ Joe Cowley, Butler is “frustrated with the nonchalant attitudes of younger teammates — specifically Karl-Anthony Towns” and does not intend to sign an extension with the Timberwolves. Like Leonard, Butler can become a free agent next summer and leave to another team if Minnesota hasn’t traded him by then. But it’s important to note that the Timberwolves would have to be convinced there’s no way they can repair the relationship before turning to trade possibilities. A trade is probably the last resort at this point. Anyway, if Butler does give the Heat a long-term commitment, everything should be on the table to make a deal work. The Tom Thibodeau-led Timberwolves would probably want a defensive minded replacement for Butler, and Josh Richardson fits that mold perfectly. But in order to make salary matching work, Miami would need to include more than that in the trade.
If Butler does not want to give the Heat a long-term commitment, trading away part of the young core for one season of Butler makes little sense … unless the Heat are willing to bet on themselves in getting him to stay similar to what Oklahoma City accomplished with Paul George. Is that a risk Miami is willing to take? If the Leonard situation is any indication, no. But you have to wonder, what do the Heat really have to lose by taking this risk? Yes, a part of their young core. But worst case scenario, Butler leaves after one season and all of a sudden Miami has cap space to work with. As Oklahoma City general manager Sam Presti (or A Tribe Called Quest) once said, “Scared money don’t make none.”
@iebrahim81: What’s the buzz around re-signing Winslow? We have two seasons left of him before he becomes a RFA.
Anthony Chiang: Actually, the Heat have one season left before Justise Winslow becomes a restricted free agent. If Miami does not extend Winslow’s contract between now and the 2018-19 regular-season opener, he will become a restricted free agent next summer. What will Winslow be looking for in a new deal? Well, Utah’s Dante Exum just agreed to a 3-year, $33 million contract extension. That’s probably close to what it will take to extend Winslow. The problem is the Heat already have $118 million committed to nine players for the 2019-20 season, and the salary cap is projected at $109 million. That means Miami is already capped out, which leaves little room to extend Winslow if other salary can’t be shed.
MIAMI — The Heat entered the offseason with a lot of questions surrounding their roster and very little financial flexibility to make significant changes.
Excluding cap holds, the Heat have 11 players under contract for 2018-19 who are due about $120 million. That puts Miami way above the $101.9 million salary cap and very close to the $123.7 million luxury tax line.
Unable to sign players into space because the Heat are capped out, they will have to rely on exceptions, minimum contracts, the power of Bird rights or even trades to fill out their roster.