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NBA two-way contracts explained and how they impact the Miami Heat

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NBA rosters expand, in a modified way, up to 17 players, which may help teams deal with injuries.

NBA: Washington Wizards at Miami Heat Steve Mitchell-USA TODAY Sports

A brief primer, via dleaguedigest, on the new NBA two-way contracts clears up the confusion surrounding them.

How do the new contracts affect the Miami Heat salary cap?

“A player an NBA team wishes to designate with a two-way contract will receive $50,000 in training camp, a number that is paid by the NBA D-League and is not a salary cap hit against the NBA team.”

Are players are limited in how long they can shuttle between teams?

“A player on a two-way contract can spend a maximum of 45 days with the NBA team, at which [point] they will earn 1/170 of the rookie minimum contract per day.”

“According to a source, a player can earn approximately $275,000 per contract if they meet the maximum requirements.”

After 45 days in the NBA they must be signed to a regular contract or released as free agents.

Can any player sign a two-way contract?

“Anyone with three years or fewer NBA service.”

“Players can sign either one-or-two-year two-way contracts with an NBA team, with the exception of players having three years of service in the NBA (they may only sign a one-year deal).”

Can the Heat sign players to the two-way contracts anytime?

“According to a source, January 15th is the deadline for two-way contracts to be signed each season.”

Larry Coon pointed three additional team-friendly advantages of the new rules.

“Players accrue Bird rights (toward free agency) while on two-way contracts, and they are subject to restricted free agency at the end of their contracts if they were called up by the parent NBA team for at least 15 days of the previous season.”

“As with NBA players on D-League assignment, the parent team retains full rights to its two-way players. Poaching, at least for the two-way players, is no longer a worry for NBA GM’s.”

“Two-way players can be traded. However, they can't be traded for 30 days after they are signed, and trades of two-way players don't generate trade exceptions for the parent team.”

The new two-way contracts make the competition for floor time more intense among team members. Tyler Johnson and Hassan Whiteside are both D-League alumni, whom the team molded into quality players. Given the ability to sign second and third-year NBA-experienced athletes, Heat development culture might give seasoned players another chance to plead their case, for up to 45 days in Miami, and improve the team during the course of the season should they be signed to a regular contract.

For the Heat, signing two players before Jan. 15th gives them some breathing room to be outside of the 15-man roster limitation should someone become disabled anytime during the season for a month or so. A D-Leaguer might sign up because of the potential to earn up to $275,000 should he see action in the maximum of 45 days.

The 45 days compares favorably to 10-day contracts, which might cover only 3 or 4 games. The replacement talent level would inferior to an injured starter, but when several incidences occur at once any help is appreciated. An added bonus would be when a player breaks out with an outstanding effort when given a chance, such as Josh Richardson had in his rookie season.

Importantly the two-way deals count towards Bird Rights, which allow teams to go over the cap space if they sign player after two seasons. This works best for high-risk, high-upside players, who need to develop their game up to NBA standards or stay healthy for a season or two. Someone like Briante Weber, who was passed over due to his torn ACL, would be an example of a player having to prove he could come back at full strength.

If Miami can free up Chris Bosh’s roster spot, that move would allow their 2017 draft selection to become the fifteen man on the roster. According to mock draft scenarios the pick likely would be a front court player. Since the draft is on June 22, 2017, the Heat will have a better idea on who to pursue from other teams, if anyone, once free agency starts on July 1.

Retaining both James Johnson and Dion Waiters will leave a potential starting foursome of Hassan Whiteside, Goran Dragic, Waiters and Johnson. The fifth starting spot will be a battle among several candidates to earn the distinction. Competition for the rotation squad will be spirited, as a quality bench is essential during the course of the long season.

Last season Derrick Williams seemed like the front-runner for power forward, but Johnson won over the hearts of Heat fans with his inspired performance during the course of the season and snagged the power forward position. Using the same exact formula as the Heat did with JJ, the last starting spot on the team won’t be automatically given to Justise Winslow, but earned by merit alone on deciding who deserves to become a starter.

The candidates from last year to fill out the rotation include Winslow, Luke Babbitt, Rodney McGruder, Josh Richardson, Josh McRoberts, Tyler Johnson, Wayne Ellington, Willie Reed, Okaro White. They don’t include a possible trade or free-agent signing for an elite player(s) to upgrade the roster to championship caliber. Usually first-round draft choices don’t earn starting spots in their rookie season.

Last season Johnson and Johnson thrived off the bench, but this is a new season, which calls for adjustments by the Heat to become more than a 41-41 team. The extra two roster spots guarantee increased depth and help as needed, with the perspective that the future for Miami is now.