Heat offseason primer: Miami’s cap, tax, draft, free agent situation: What’s next
A playoff bystander for the first time in seven years, the Heat today begins a long offseason with significant flexibility but also significant challenges in upgrading a roster that appears to have maxed out.
Without counting cap holds of free agents Norman Powell, Simone Fontecchio and Keshad Johnson, Miami could have anywhere from about $30 million to $60 million under the $202 million luxury tax line, depending on whether Andrew Wiggins exercises his $30.2 million player option by June 29. The caveat is that Miami must renounce rights to Powell and Fontecchio to have that extent of flexibility.
Miami will have the ability to use multiple sizable salary cap exceptions if Wiggins opts out or if Wiggins stays but Miami renounces Powell, which remove his cap hold and eliminate his Bird rights.
Asking and answering questions:
▪ Where will the Heat draft?
Phoenix’s late-night win against Golden State in a Western Conference play-in game on Friday assured that the Heat will enter the May 10 NBA draft lottery with the 13th pick and with a 4.8 percent chance of landing a top-four selection and a 1 percent chance of snagging the No. 1 overall pick. If the Warriors had won, Miami would have been slotted 12th and had a 7.1 percent chance of landing a top-four pick and a 1.5 percent chance of getting the No. 1 pick. The Heat is slotted 13th because it has the second-best record of the 14 teams who will not be participating in the playoffs. Among lottery-bound teams, only Charlotte has a better record than Miami. So the Heat can pick only 1st, 2nd, 3rd, 4th, 13th or 14th (if Charlotte moves into the top four).
▪ Who’s projected for the Heat’s expected draft range?
ESPN draft analyst Jeremy Woo lists these players as prospects 10 to 17, in order: Arizona guard Brayden Burries, New Zealand-based forward Karim Lopez, Florida forward Thomas Haugh, Connecticut guard Braylon Mullins, Kentucky center Jayden Quaintance, Washington power forward Hannes Steinbach, Texas Tech point guard Christian Anderson and Michigan forward Yaxel Lendeborg.
▪ Who’s under contract for next season?
Eight players have full guaranteed deals: Bam Adebayo ($51.9 million), Tyler Herro ($33 million in the final year of his contract), Wiggins ($30.2 million player option), Davion Mitchell ($12.4 million in the final year of his contract), Nikola Jovic ($16.2 million in the first year of four-year, $62.4 million extension), Jaime Jaquez Jr. ($5.9 million; can become a free agent in 2027), Kel’El Ware ($4.6 million, with a $7.1 million team option for 2027-28) and Kasparas Jakucionis ($3.8 million).
A ninth, Pelle Larsson, has a $2.3 million team option that will assuredly be exercised.
Three players have very small guarantees or none at all: Dru Smith (fully nonguaranteed $2.6 million for next season) Myron Gardner ($250,000 of $2.6 million salary guaranteed for next season) and Jahmir Young (fully nonguaranteed $2.4 million for next season).
Counting only the eight players with guaranteed contracts, Larsson and Wiggins, that adds up to $161 million, not counting several million that must be allocated toward a first-round pick and not counting cap holds for empty roster spots and the cap holds for Powell, Fontecchio and Johnson that disappear only if Miami renounces them or they sign elsewhere after July 1.
▪ What are the options with Wiggins and how will that affect the Heat’s cap?
If Wiggins opts into the final year of his contract, Miami would be above the projected $165 million salary cap for next season but still below the tax line.
If he opts out of the final year of his contract, Miami would have only $131 million in guaranteed salary for nine players next season (counting Larsson). But in actuality, Miami’s cap number would be at least $10 million higher because of cap holds for empty spots and the first-round pick.
All of these scenarios would leave the Heat with the ability to carve out significant space under the projected $201 million tax line.
Even if Wiggins opts out with the hope of finding a richer multiyear deal elsewhere, Miami could keep his cap hold — until he signs elsewhere — with the hope of facilitating a sign-and-trade that could net the Heat players or a draft pick in return.
So while there is a way for the Heat to create cap space, operating as an over-the-cap team seems the preferable and more feasible route, because it could allow Miami to parlay Wiggins or Powell into another asset if it chooses;or re-sign Wiggins, Powell or Fontecchio; and give the Heat access to two large cap exceptions.
Teams lose the ability to use free agents in sign-and-trades if they renounce them.
▪ What salary-cap exceptions will the Heat have?
If Miami operates as an over-the-cap team, it would have a $15 million nontaxpayer midlevel exception and a $5.5 million biannual exception, provided the Heat remains below the projected $201 million tax threshold, as it very likely will.
Those exceptions cannot be combined.
If Miami operates as a room team (unlikely), it would have cap space and a $9.4 million room exception.
Miami also has two trade exceptions that can be used to acquire players without sending money out — a $16.9 million exception from the Duncan Robinson trade with Detroit and a $5.6 million exception from the Haywood Highsmith trade with Brooklyn. Those exceptions expire July 7 and Aug. 17, respectively.
A $15 million midlevel exception should be enough to lure a good player from a free agent class including Coby White and CJ McCollum.
▪ Of the Heat’s free agents, who’s most likely to return?
Johnson, who’s a restricted free agent, has a decent chance to be asked back on a low-money deal.
Powell is a toss-up at this point; his durability issues and diminished production after the All-Star break make it less likely that the Heat would offer him the lucrative long-term deal that he’s seeking. Perhaps the sides could agree to a short deal at modest money, if the market dries up for Powell elsewhere.
If Wiggins opts out, the Heat could opt to facilitate a sign-and-trade, giving both parties a fresh start.
▪ Who is extension eligible?
Herro, who has one more year left on his current contract, is eligible to sign an extension worth as much as $206.9 million through four seasons this offseason. That negotiating window will open July 1, 2026, and close on June 30, 2027. It’s unlikely the Heat will give him a salary in that range, if it gives him an extension at all.
Powell is already eligible for an extension worth as much as $128.5 million through four years. If Powell can’t agree to an extension with the Heat by June 30, he would become an unrestricted free agent this summer.
Jaquez, who still has one more season left on his rookie-scale contract, is eligible for a five-year extension at a maximum of about $245 million this summer. That negotiating window begins on July 1, 2026, and closes the day before the start of the 2026-27 regular season.
Larsson becomes eligible to sign an extension with the Heat starting on July 6 after the Heat picks up the option in his contract ahead of the June 29 option deadline, and the window to sign an extension remains open until June 30, 2027. He will become eligible to sign an extension worth up to $93 million through four years this summer.
▪ What first-round picks do the Heat have?
Miami owes a first-round pick to Charlotte; that pick is top-14 protected in 2027 and unprotected in 2028 if it doesn’t convey in 2027. The Heat owns every other first-round pick through 2032. The 2033 first-round pick becomes eligible to trade after this June’s draft.
▪ Does the Heat have a second-round pick?
Yes, the one that the NBA ordered Charlotte to give the Heat as apparent compensation for not disclosing an FBI investigation into Terry Rozier before he was traded to Miami. That pick, which originally belonged to Golden State, will be 41st overall.
▪ What first-round picks can the Heat trade?
Miami can trade its first-round picks in 2030 and 2032 before the draft, or two among its first-round picks in 2030, 2031, 2032 and 2033 after the draft (provided the two aren’t in consecutive years).
The Heat also could pick a player on behalf of another team in June’s draft as part of a prearranged trade, which would essentially give Miami three tradable first-round picks.
▪ How will the Heat improve?
Expect Miami to explore any All Star player that becomes available on the trade market, with Milwaukee’s Giannis Antetokounmpo again expected to be a top target. Whether the Heat is willing to part with its lottery pick likely will depend on the quality of the player targeted.
The Heat has been very selective about players it pursues, and it remains to be seen if three disappointing seasons in a row motivate Miami to expand its list of targets.
This story was originally published April 15, 2026 at 9:44 AM.
