The Miami Heat must now get below the hard cap after the Butler trade. And here’s how
It took a four-team deal to get it done. The sign-and-trade transaction to acquire four-time All-Star Jimmy Butler was completed Monday.
Next on the Heat’s to-do list? Find a way to get below the $138.9 million hard-cap threshold.
There’s a sense of urgency for Miami to accomplish that because the team is receiving the player in the sign-and-trade (the Heat, in this case) cannot be above the hard-cap line at the conclusion of the deal. That means before the trade is fully consummated and announced, the Heat needs to shed additional money to get its team salary below $138.9 million and then must stay under that threshold for the rest of the season.
Miami has some time to achieve this, with trades unable to become official until the end of the NBA moratorium Saturday. The deal could technically even be delayed further if the Heat needs more time to get below the hard-cap line and the other teams in the trade are willing to wait.
How can the Heat successfully get below the $138.9 million cap apron, which is a figure about $6 million above the NBA’s luxury tax threshold?
The Heat comes out of the trade with 14 players on its roster: Butler (a 2019-20 salary of $32.7 million), Ryan Anderson ($21.3 million), Goran Dragic ($19.2 million), James Johnson ($15.3 million), Kelly Olynyk ($13.1 million), Justise Winslow ($13 million), Dion Waiters ($12.1 million), Meyers Leonard ($11.3 million), Tyler Herro ($3.6 million, but has not signed contract yet), Bam Adebayo ($3.5 million), Derrick Jones Jr. ($1.6 million), Yante Maten ($1.4 million), Duncan Robinson ($1.4 million) and Kendrick Nunn ($1.4 million).
The Heat’s team salary stands at a little more than $150 million committed to 14 players. Waiters’ unlikely bonus represents an additional $1.1 million, which needs to be included when calculating payroll for hard-cap purposes.
In order to get under the $138.9 million hard-cap apron, the Heat could be forced to use the “stretch provision” when waiving Anderson unless it is able to shed additional salary in coming days.
Only $15.6 million of Anderson’s $21.3 million salary is guaranteed if he’s released by July 10. But waiving and stretching Anderson would reduce his cap hit to an annual $5.2 million over the next three seasons to create an extra $16.1 million in room from his full $21.3 million salary and is believed to move the Heat just below the hard-cap threshold.
The downside of using the “stretch provision” when waiving Anderson is the Heat will incur an annual $5.2 million cap hit over the next three seasons, which will eat away at some of its 2020 and 2021 cap space, rather than just dealing with a single $15.6 million cap hit this upcoming season if Miami simply released him.
One way the Heat can avoid having to “stretch” Anderson is to shed additional salary.
Trading the final year of Dragic’s contract ($19.2 million) into another team’s cap space or by taking back a player who earns a good amount less would help Miami avoid using the “stretch provision” on Anderson. Dragic’s name was involved in discussions to complete the sign-and-trade transaction, but he was left out of the final deal.
The Lakers, Clippers and Mavericks still have enough cap space to take in Dragic’s contract without having to trade the Heat salary, according to ESPN’s Bobby Marks.
Whatever the Heat chooses to do to get below the hard-cap threshold, it could be forced to use minimum contracts to fill out its 15-man roster because it will still be up against the $132.627 million luxury tax line and $138.9 million apron. The two two-way contract players Miami is allowed to sign do not count against the roster limit or salary cap.
Miami currently holds a $5.7 million taxpayer mid-level exception it can use on one player or split between multiple players. But because the Heat is already above the tax threshold and also hard-capped, there’s a chance it could opt not to use this exception unless considerable salary is shed and also move forward with a 14-player roster (one shy of the NBA regular-season maximum of 15 players).
None of these calculations include second-round pick KZ Okpala or veteran Udonis Haslem, who are both likely to sign minimum contracts with the Heat. Haslem is still deciding whether to return for a 17th NBA season or retire.
This story was originally published July 2, 2019 at 2:13 PM.
