How a drop in NBA revenue could affect Miami Heat’s 2021 grand free agent plan
Before the coronavirus pandemic forced the NBA to halt its season, it appeared as if the Heat would have enough cap room in 2021 not only to sign a max player but also enough to give a second player something in the range of $8 million to $13 million.
That’s now appearing less likely, because lost NBA revenue from the health crisis might lower not only next season’s cap but also the 2021-22 cap if the league and players union decide to “smooth” modest cap drops over multiple years instead of sustaining one potentially significant cap drop in 2020-21.
That’s generally how the league and union have done things during extenuating circumstances in the past.
And if the 2021-22 cap is lowered from the projected $125 million as a result, that will make it risky for Miami to offer Derrick Jones Jr., Goran Dragic or any of its free agents a multiyear contract this summer. (A one-year offer wouldn’t be a problem, because all of them have Bird Rights.)
Here’s where thing stand for the Heat and 2021-22:
If the Heat declines Andre Iguodala’s $15 million option for 2021-22 (which would be expected), Miami’s cap commitments for 2021-22 include Jimmy Butler ($36 million), Tyler Herro ($4 million), Bam Adebayo (eligible for restricted free agency that summer, but his cap hit in 2021-22 will be $12.8 million, regardless of what he’s paid), Kendrick Nunn and Duncan Robinson (each likely with $4.7 million cap hits regardless of what they’re paid), $4 million or so due Miami’s 2020 first-round pick, $1.4 million for both KZ Okpala and Chris Silva (nonguaranteed), Ryan Anderson’s $5.2 million hit and about $4 million in cap holds to fill out a roster.
The Nunn and Robinson cap hits could drop to $2.1 million if they become bench players next season, as explained here.
Using the $4.7 million cap hits for Robinson and Nunn, those 2021-22 cap commitments add to up $78.2 million. With a $125 million cap, that would leave $47 million in space - enough to pay Giannis Antetokounmpo his $37.5 million first-year max in that scenario and have about $10 million left over for a second player.
But a cap reduction could wipe out any significant money for a second player. It also would lower the first year max contract for NBA stars.
Players with seven to nine years of experience are eligible for a max contract worth 30 percent of the salary cap. Players with 10-plus years of experience are eligible for a super-max deal worth 35 percent of the salary cap.
So if the cap is, say $115 million, in 2021-22 because of a coronavirus-related drop in league revenues, Antetokounmpo’s first-year max would drop to $34.5 million. That would be the same number for Victor Olapido, another potential 2021 free agent with fewer than 10 years of NBA service.
For players with 10-plus years of service by 2021 - including Kawhi Leonard - a $115 million cap would mean a first-year max of $40.3 million.
That’s why the NBA needs to give teams some degree of clarity on the 2021-22 cap when the league determines its 2020-21 cap. And why the Heat, at this point, might be wise not to give anyone a contract past 2020-21.
In a worst case scenario for the Heat, the NBA’s revenues could take such a hit that the Heat could fall below having space available for any max free agent in the summer of 2021.
But the Heat believes that if a star wants to come here, it will find a way, as it did with Butler last summer, despite Miami having no cap space at all.
As for Jones, it remains to be seen whether any team will offer him a multiyear deal this summer. The Chicago Sun-Times reported that the Bulls have been evaluating both Jones and Dragic. Because each has Bird Rights, Miami could afford to give both Jones and Dragic lucrative one-year deals - regardless of next season’s cap number — but no longer appears in position to give Jones the type of multiyear deal he might be seeking.
Jones made clear last week that he prefers to remain with the Heat long-term.
One postscript: Because of the potential drop in the cap in the summer of 2021, the Heat might not have been able to afford to keep Justise Winslow long-term — from a cap standpoint — even if he hadn’t been traded to Memphis in February. Remember, Winslow has a $13 million team option for 2021-22. And in a world with a lower cap that summer, Miami likely could not have kept Winslow if it found a star willing to take a max deal in 15 months, and if it wanted to keep all of its other key pieces.
SIMON UPDATE
Heat assistant general manager Adam Simon, who reportedly drew interest from the Chicago Bulls in recent days, will be staying with the Heat, according to a Heat spokesperson.
Simon grew up in South Florida and is very much valued by Miami for his good work in the draft and G League and NBA scouting. Simon was among NBA personnel men who interested the Bulls in their search for a new top executive on the basketball side.
This story was originally published April 6, 2020 at 4:54 PM.
