As the Heat watches the impressive emergence of several young players - led by Bam Adebayo, Justise Winslow, Kendrick Nunn and Tyler Herro - here’s even more good news:
Because of cap rules and prudent planning by the Heat front office, Miami -- barring a China-related significant drop in the salary cap -- should be able to keep nearly all of its emerging young players longterm and still have the cap space to add a max free agent in the summer of 2021, when Giannis Antetokounmpo, Anthony Davis, Kawhi Leonard, Victor Olapido, Gordon Hayward, Blake Griffin, LaMarcus Aldridge and Paul George are eligible for free agency.
But the numbers are going to be close.
Besides those aforementioned four, the other young players who might be part of the Heat’s future are Derrick Jones Jr., Duncan Robinson, KZ Ozpala and two-way player Chris Silva. And the Heat’s first-round pick next June will give Miami a group of nine young players, provided that pick isn’t used in a trade on draft night or after.
Of those nine, the one who would appear most at risk of needing to be sacrificed to maintain max space in 2021 would be Jones Jr., an impending unrestricted free agent. Miami is not in position to add commitments for 2021-22 beyond deals barely above the league minimum, and Jones should be able to command more than that next summer.
Also, these permutations - in which the Heat would have max space in 2021 and keep nearly all of its young players - involve the Heat renouncing 2021 free agents Kelly Olynyk (has an opt-out next summer), Dion Waiters and James Johnson and not keeping 2020 free agents Goran Dragic and Meyers Leonard beyond next season. (Dragic and Leonard could return on one-year deals next summer.)
But here’s why the Heat should be able to afford to keep nearly all of its young players and have room to bid for a max free agent in 2021:
Though Kendrick Nunn (and Robinson) will be restricted free agents in 2021, their cap holds will be just $2.1 million or in Nunn’s case, possibly $4.7 million. That means the Heat could keep Nunn’s cap hold on its cap ($2.1 million or $4.7 million), spend up to the cap on outside free agents and then go over the cap to re-sign Nunn to anything, including the ability to match any outside offer.
Cap expert Albert Nahmad noted, and a league source confirmed, that Nunn’s cap hold could rise to $4.7 million if he meets starter criteria. A player who is eligible for restricted free agency is considered to have met the starter criteria if he plays at least 2,000 minutes or starts 41 games in the season before he reaches free agency, or if he averages either of those marks in the two seasons prior to his restricted free agency.
So for hypothetical sake, let’s say Nunn consumes $4.7 million and Robinson consumes $2.1 million of the Heat’s 2021-22 cap space, with the cap projected to be $125 million that season. (And we’ll get to the China issue later.)
Beyond those two players, the Heat’s 2021-22 commitments include Jimmy Butler at $36 million, Winslow at $13 million (team option), Herro at $4 million, Okpala at $1.8 million and an Adebayo cap hold of $12.8 million (any first year salary above that can exceed the cap).
Throw in about $4 million for the Heat’s 2020 first-round pick, $3 million or so in cap holds and $5.2 million in dead money on Ryan Anderson, and that’s $84 million on the books for 2021-22.
That would leave Miami with about $38.4 million in space under the $125 million cap projection.
And using that $125 million, that would be enough to accommodate the $37.5 million first-year max salary for players who have played seven to nine years (such as Antetokounmpo and Oladipo) but fall short of the $43.8 million first-year max for older players such as George, Hayward, Griffin and Aldridge. (Here’s where I should note that if the Heat and one of those older players want to make a deal in 2021, they will find a way to achieve it.)
Why the difference in first-year salaries? Ten-plus year veterans can make 35 percent of the cap in the first year, compared to 30 percent for 7-to-9 year vets. And remember, these outside star free agents can make much more and sign for an extra year if they stay with their current teams.
If Adebayo agreed to a deal starting below his $12.8 million cap hold, that could increase Miami’s flexibility. But he stands to make more than that.
There could be a way to keep Jones if he agrees to a modest contract next summer, keeping alive his 2021 Bird rights, and if Miami renounces Robinson in 2021 and moves on from Okpala.
Could any of this be affected if the preseason issue with China leads to a significant reduction in NBA revenue? It could. But remember that first-year max salaries are based on a percentage of the cap. So max salaries will diminish if the cap diminishes. And a league executive said there has been no indication from the league that the cap will fall short of 2021 projections.
But as things stand currently, the Heat should be able to keep nearly all of its young core longterm and have the cap space to add a star to join Butler and the kids.
And credit smart planning for that; keep in mind that if Nunn had signed with the Heat last May instead of on the final day of the season, he wouldn’t have had full Bird Rights and re-signing him might have been challenging if he continues on this current arc.
And make no mistake: Unless the Heat can trade for a star in the next two years, the plan is to continue to preserve that max cap space for 2021 so the Heat can at least make a run at Antetokounmpo and others.