Just last month, the Miami Heat was one victory from reaching the NBA Finals for the second time in the past three seasons. This week, the Heat’s front office will be making critical decisions about next season’s roster.
Life moves fast in the NBA, as free agent negotiations across the league are allowed to begin Thursday at 6 p.m. Signings aren’t allowed to become official until July 6.
Entering free agency, the Heat’s salary-cap breakdown for next season includes 10 players: Jimmy Butler ($37.7 million), Bam Adebayo ($30.4 million), Kyle Lowry ($28.3 million), Duncan Robinson ($16.9 million), Tyler Herro ($5.7 million), Nikola Jovic (projected $2.2 million), Max Strus ($1.8 million), Gabe Vincent ($1.8 million), Omer Yurtseven ($1.8 million) and Haywood Highsmith ($1.8 million).
There are several things worth noting about this 10-man list:
▪ Jovic has not signed his rookie-scale contract yet. He’s slotted to make about $2.2 million next season as the 27th overall pick and will be under team control for five seasons. This year’s first-round picks can begin signing their contracts Friday.
▪ The full $1.8 million salaries of Strus, Vincent and Yurtseven became guaranteed Thursday because they were not waived by 11:59 p.m. on Wednesday.
▪ Highsmith’s entire $1.8 million salary for next season is currently non-guaranteed. But the first $50,000 of Highsmith’s salary with the Heat for next season becomes guaranteed if he’s not waived by Friday. Highsmith’s salary then becomes guaranteed for $400,000 if he’s on the roster for opening night and $700,000 if he’s on the roster on Dec. 1. His full salary for next season becomes guaranteed at the league-wide deadline in January.
Not including cap holds, the Heat has about $128.4 million committed to salaries for next season with the latest 2022-23 projections setting the salary cap at $123.7 million, luxury-tax threshold at $150.3 million and potential hard-cap apron at $157 million.
That leaves six players from the Heat’s season-ending roster who will become free agents this summer: Dewayne Dedmon, Udonis Haslem, Markieff Morris, Victor Oladipo and P.J. Tucker will be unrestricted free agents, and Caleb Martin will be a restricted free agent.
The Heat will operate as an over-the-cap team in free agency this offseason since it does not hold cap space.
OPERATING ABOVE THE CAP
By entering free agency over the cap, the Heat has the opportunity to bring back most of last season’s roster by leveraging the Bird rights of its own free agents to re-sign them.
The Heat holds full Bird rights for Haslem and Oladipo, so it can exceed the salary cap to re-sign them up to their maximum salary despite being over the cap.
The Heat holds Dedmon’s early Bird rights, so it can exceed the salary cap to re-sign him to a contract with a starting salary of up to about $11 million but for no less than two seasons.
The Heat does not hold any form of Bird rights for Morris, Tucker and Martin. That means Miami is limited to either the non-Bird exception, the biannual exception, one of the midlevel exceptions or a minimum contract to re-sign them this summer.
As an over-the-cap team, the Heat has a few exceptions to choose from: the $10.5 million non-taxpayer midlevel exception and the $4.1 biannual exception, or the $6.5 million taxpayer midlevel exception. These exceptions can’t be combined, but each one can be split to sign multiple players.
The Heat would be able to use both the $10.5 million non-taxpayer midlevel exception and $4.1 biannual exception in one scenario, but using either of those exceptions would hard cap the Heat at about $157 million. A league source told the Miami Herald that the Heat is looking to avoid the hard cap this year because it would limit the team’s flexibility in the trade market during the NBA’s 2022-23 calendar.
Or the Heat could opt to use the $6.5 million taxpayer midlevel exception instead, which would not hard cap the Heat. But using this exception will prohibit Miami from using the $10.5 million non-taxpayer midlevel exception and $4.1 million biannual exception during the 2022-23 NBA calendar.
The Heat could also choose to allow most of its own free agents to sign elsewhere and bring in new faces. Miami doesn’t have cap space or the luxury of Bird rights to add outside free agents, but it has a midlevel exception, a bi-annual exception if it uses the non-taxpayer midlevel, and minimums to bring in outside talent.
Yahoo’s Chris Haynes reported Wednesday night that Dallas Mavericks point guard Jalen Brunson, who is considered among the top free agents in a weak class, will grant a meeting to the Heat when free agency opens on Thursday night.
Brunson also will meet with the New York Knicks, who are widely considered the heavy favorites to sign him, and the Mavericks.
With no cap space, the Heat would need to pull off a sign-and-trade to acquire Brunson. A sign-and-trade transaction would trigger the $157 million hard cap for the Heat, which it has been trying to avoid.
THE TUCKER CONUNDRUM
How the Tucker situation plays out will likely dictate how the Heat proceeds in free agency.
The Heat’s love for Tucker has been well-documented and the organization wants him back. But it appears the front office has drawn a line as to how far it’s willing to go to make it happen.
Tucker, who turned 37 in June, allowed Wednesday’s deadline to pass without opting in to his $7.4 million player option with the Heat for next season. By not opting in, Tucker will become an unrestricted free agent.
According to multiple sources close to the situation, the Heat is willing to offer Tucker a fully guaranteed contract for the maximum-allowable three years using the non-Bird exception. The deal would include a starting salary of $8.4 million and be worth about $26.5 million through three seasons.
But the Heat is not currently willing to use the $10.5 million non-taxpayer midlevel exception to re-sign Tucker, according to sources, which would allow Miami to offer him a three-year contract worth about $33 million.
Tucker’s preference is to re-sign with the Heat if all things are equal, but it looks like money will be the driving force behind his free agent decision. Tucker, like most players, is looking for the most guaranteed money possible at this late stage of his career.
Tucker and his camp believe there will be teams willing to offer him a contract in the $30 million range over three years using the non-taxpayer midlevel exception.
Keith Pompey from The Philadelphia Inquirer reported that the Philadelphia 76ers intend to use the $10.5 million non-taxpayer midlevel exception to offer Tucker a three-year contract worth around $30 million. Pompey added that Tucker “will choose the Sixers’ three-year, $30 million offer over opportunities to remain in Miami or go back to Milwaukee after free agency begins at 6 p.m.”
Why is the Heat hesitant to offer Tucker a fully guaranteed three-year contract using the $10.5 million non-taxpayer midlevel exception?
First, Tucker is 37 and the deal would end in a year that he turns 40.
Second, such a contract would significantly limit what else the Heat can do in free agency this year. Because using the $10.5 million non-taxpayer midlevel exception on Tucker would not only hard cap the Heat at the apron that’s expected to be set around $157 million, but it would also eliminate the biggest offer it could make to re-sign Martin or add an outside free agent.
If the non-taxpayer midlevel exception is used on Tucker, the most lucrative offer the Heat could make to Martin or any outside free agent would be using the $4.1 million biannual exception.
But the biggest factor could be the Heat’s reluctance to trigger the hard cap because of how much it would limit the organization’s flexibility in the trade market in the coming months.
If Tucker does choose to sign elsewhere, the Heat’s free agent options to replace him in the starting lineup are limited. Among the top forwards in this year’s free agent class are Otto Porter Jr., Kyle Anderson, T.J. Warren, Thaddeus Young, Chris Boucher and Bobby Portis.
The Heat could also trade for Tucker’s replacement if he signs elsewhere in free agency. Small-ball forwards on expiring contracts such as Sacramento’s Harrison Barnes and Phoenix’s Jae Crowder are intriguing options.
Despite multiple reports indicating that Tucker is on track to join the 76ers, sources emphasized that a return to the Heat shouldn’t be ruled out yet.
HEAT’S OTHER FREE AGENTS
▪ The Heat can exceed the salary cap to re-sign Dedmon to a contract with a starting salary of up to about $11 million because it holds his early Bird rights. The Heat can also sign him using the non-Bird exception with a starting salary of up to $3.1 million or just bring him back on a minimum contract worth about $2.6 million.
Whether Dedmon returns will likely depend on how much confidence the front office and coaching staff has in Yurtseven potentially stepping into the backup center role. One league source believes Dedmon’s return to the Heat in free agency is unlikely.
▪ If Haslem wants to continue his playing career, he will likely be back on the Heat’s roster next season on another minimum contract. Haslem, 42, is still undecided on whether he wants to return for a 20th NBA season and will take some time this offseason to make that decision.
▪ Morris might have to settle for a minimum contract or something close to it this summer after appearing in just 17 regular-season games last season because of a neck injury stemming from Nikola Jokic’s shove. It would not be a surprise if Morris signed elsewhere in free agency.
▪ Oladipo’s market is expected to be in the range of the $6.5 million taxpayer midlevel exception. Bleacher Report’s Jake Fischer reported Wednesday that Oladipo “is not expected to return to the Heat and is said to have interest from Washington, Denver and Detroit.”
A league source said an Oladipo return to the Heat remains a possibility if his market remains in the $4 million to $6 million range, with Bird rights allowing Miami to make that signing without having to use its midlevel exception on him.
▪ There’s mutual interest between Martin and the Heat in getting a deal done, according to a league source, but outside factors will determine if that actually happens. What will be left to offer Martin if the Heat needs to use its midlevel exception to bring back Tucker? What will Martin’s market be? Martin and his camp are aware that Tucker’s situation has the potential to impact his future with the Heat, for better or worse.
As it stands at the moment, the Heat holds the right to match outside offers up to the $10.5 million midlevel exception to re-sign him Martin since he’s a restricted free agent.
ONE MORE THING
Herro, who will earn $5.7 million this upcoming season in the final year of his rookie deal, becomes eligible this offseason to sign a contact extension worth as much as $181 million over five seasons, with a first-year salary (2023-24) of $31.2 million. He can sign for five years — instead of four — only if he gets a max contract.
Recent history with players of or close to Herro’s caliber entering their extension window indicates his extension could fall in the range a four-year contract worth around $25 million per season. Jaylen Brown signed a four-year, $107 million extension with the Boston Celtics in the 2019 offseason and Mikal Bridges signed a four-year, $90 million extension with the Phoenix Suns last offseason.
The Heat and Herro have a mid-October deadline (the final day before the start of the regular season) to reach an agreement on an extension. If an extension isn’t agreed to, Herro will become a restricted free agent in the summer of 2023.