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To add, the Miami Heat must subtract
The math might not math, but bear with me here...
It’s been nearly four years since the Miami Heat first signed Jimmy Butler—1,440 days, to be exact. Through the cap magic of Andy Elisburg, they did so without cap space, completing a four-way sign-and-trade that included Miami re-routing Josh Richardson to Philadelphia, Hassan Whiteside to Portland, Mo Harkless to the Clippers and Meyers Leonard to Miami.
Since that acquisition, Butler and Bam Adebayo have formed one of the NBA’s best—and most underrated—two-way tandems. The Heat have gone to three conference finals in four years with trips to the NBA Finals in two of those seasons.
Believe it or not, despite not winning the title, the Heat has more playoff wins than any NBA Franchise over that stretch with 38—two more than the Boston Celtics, eight more than the Nuggets, nine more than Milwaukee and 11 more than Phoenix.
They also became the third franchise in league history to make the Finals as a No. 4 seed or lower, joining the Houston Rockets (1980-81, 94-95) as the only other team to do it multiple times.
While it ended unceremoniously, Miami’s 2022-23 postseason run was historic. After coming less than three minutes of getting eliminated from the second play-in game at home against the Bulls, the Heat faced the gauntlet, facing the best possible seed in each matchup before running out of gas against the Denver Nuggets.
The Heat now enter another pivotal offseason in the Jimmy Butler-Bam Adebayo era. The roster hasn’t been perfectly built by any means, but have still come so close … yet so far at securing the franchise’s fourth-ever title.
Now, the opportunity to re-shake the roster comes with a financial wrinkle: To add (talent), Miami must subtract (payroll).
And lots of it.
It enters the offseason with nine players on the roster. The 2023-24 season will be the first year of Tyler Herro’s $120 million extension ($27.0M for 23-24) and Butler’s $146.4 million extension ($45.2M for 23-24) that he signed ahead of the 2021-22 season. Here’s the team’s payroll right now, not including their possible first-round pick:
Jimmy Butler — $45.2M
Bam Adebayo — $32.6M
Kyle Lowry — $29.7M
Tyler Herro — $27.0M
Duncan Robinson — $18.2M
Victor Oladipo — $9.5M (player option; he has until June 29 to pick up/decline option)
Caleb Martin — $6.8M
Nikola Jovic — $2.4M
Haywood Highsmith — $1.9M (non guaranteed, team has until July 15 to guarantee the contract)
In total, the Heat have currently $173.1 million on the books for the 2023-24 season—that this doesn’t include the No. 18 pick, which could sign up to $3.5 million for the first year of his rookie contract, equating to $176.6 million.
But as I discussed in the offseason look ahead, the newly-implemented second-apron -- $17.5 million above the projected $162 million luxury tax threshold -- throws a wrench in the avenues Miami can add talent.
It’s required to have 14 players on their roster by the start of the regular season, by rule; as Bleacher Report’s Eric Pincus noted Tuesday: Assuming the Heat use their No. 18 overall pick, Oladipo exercises his player option (plus Highsmith’s $1.9M becomes guaranteed) and the Heat sign four minimum contracts to get to 14 players, their payroll would be $184.5 million—$5 million above the unsung second apron—with a luxury tax bill of $54.5 million.
They’re not prone to keeping an extra roster spot open. But if it hypothetically added another minimum to make it 15, it would be looking at a $186.5 million payroll with a $62 million luxury tax bill. Take away Oladipo’s player option, and the Heat are still looking at a $175.1 million payroll—$4.4 million below the second apron—with a $24 million tax bill.
None of these aforementioned scenarios includes the free agencies of Gabe Vincent, Max Strus, Kevin Love, Cody Zeller, Omer Yurtseven, Jamal Cain or Orlando Robinson, the former two being the most important.
Teams operating above the second apron have significant restrictions for building a roster. They can’t use their taxpayer mid-level exception, send out cash in trades, trade first-round picks seven years in advance, sign free agents on the buyout market during the regular season or take back more than 110 percent of outgoing salary for 2023-24 (they won’t be able to take back more beginning in 2024-25).
They’re absolutely not the only team fighting this dilemma—paging, Warriors/Clippers … y’all there? Anyone home?
Nevertheless, the Heat must shed salary somewhere in order to gain more financial flexibility to expand their avenues.
Right now, Miami would not even have access to their $12.2 million mid-level exception to sign free agents since it would trigger the hard-cap; any team who pays more than the taxpayer’s portion of their MLE ($5M in 23-24) cannot exceed the $169 tax apron under any circumstance. Even with nine players, Miami’s clearly beyond that point. Not to mention, using the taxpayer’s portion would trigger the second apron, which the Heat also can’t really afford to do.
The only other exception it has is the $4.7 million trade exception from the Dewayne Dedmon deadline deal, which expires on Feb. 8, 2024.
The Heat has salaries to shed with Kyle Lowry—on an expiring—Duncan Robinson and/or Tyler Herro, whose 2023-24 cap figures alone make up 43.2 percent of its payroll. For a more grim move, it could decide to waive and stretch Victor Oladipo -- who tore his patellar tendon in Game 3 against Milwaukee -- putting his 2023-24 salary at $3.2 million for the next three seasons, saving $6.3 million.
That said, if they waive-and-stretched Oladipo, they would not be able to re-sign him, as opposed to if he opted out and re-signed for a smaller cap figure (which is unlikely, but an option nonetheless).
Caleb Martin, who averaged 12.7 points these playoffs and was arguably the best player in the Eastern Conference Finals, on the books for $6.8 million, is certainly a desirable player that teams would covet. He was arguably their third-best player throughout this run—that means something.
Herro, albeit coming off a broken hand, remains the Heat’s most desirable non-Butler/Adebayo asset, even including the No. 18 pick. That doesn’t mean the Heat will find a taker for him, Robinson, Lowry, Oladipo and/or Martin. All it takes is one team, and it would be easy to envision given his shot-creation and shot-making capabilities.
All in all, don’t be surprised if teams at the top—like Miami—offload salary unless they’re willing to endear themselves to the second apron stipulations. Does Miami want to make it more unattainable to build a contender around one of the league’s top duos, or does it want to refurbish this engine with new blood while maintaining flexibility?
Feels like an easy decision, but I digress.
While I’ve been critical of its asset management in the past, it’s not like the Heat is completely lacking in salary fillers or desirable assets. It doesn’t have a treasure trove of assets like the Thunder or Knicks, to name a couple, but the majority of the squad recouped some value throughout the postseason. Of course, it takes two (or sometimes three/four) to tango—and the Heat aren’t trading Butler or Adebayo—so it will need to shed money while accumulating reputable, affordable talent in return.
To nobody’s surprise, reports surfaced Tuesday that the Heat will go star-hunting this offseason—for better or worse.
“They have draft picks at their disposal, and they potentially have tradeable contracts, and I think they’re going to go hunting for a star,” Brian Windhorst, ESPN NBA insider, said on The Hoop Collective podcast Tuesday. “I don’t know if they’ll get one, I don’t know if it’ll all break their way. There’s other teams out there interested in it, and I’m not going to sit here and tell you who it is because I’ll get aggregated, but there are players they’re keeping an eye on and they have the ability to do it, especially if a player says, ‘Hey, send me to Miami.’ And they have a little window here before the second apron kicks in where they may be able to spend a little money. They have some draft picks they can trade. After the draft they can access their 2030 pick. They have the 18th pick in this draft, not that that’s super interesting. I don’t think they can beat all comers on a star trade but if a player says, ‘Send me to Miami’ in the next two weeks, they are not in the worst position of all time to make it.”
The 2023 free agent class is led by Kyrie Irving, James Harden, Khris Middleton, Kristaps Porzinigs, D’Angelo Russell, Fred VanVleet, Draymond Green and Jerami Grant, among plenty others.
It’s not the most star-studded free agent class—and the Heat have no cap space or sign-and-trade affordability to sign one of them—so their most likely route to acquire talent will be through the trade market for, say, a Damian Lillard, Zach LaVine or Bradley Beal—if we’re going to go down the path of players linked to Miami for years-on-end.
As Riley once said (I’m paraphrasing), there’s always obstacles, but sometimes there are none. Perhaps that’s their mindset heading into this pivotal offseason, even though it’s going to have some very tough decisions to make as the offseason takes forth.
To add, they’re going to have to subtract.