Salary-cap gymnastics behind the Heat’s pursuit of Carmelo Anthony

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The NBA just ratified a new Collective Bargaining Agreement that, among other things, limits a team’s ability to acquire multiple highly paid stars.

Yet, the Heat might chase Carmelo Anthony to join LeBron James, Dwyane Wade and Chris Bosh in Miami.

How can that happen?

There infinite ways the Heat could make room for Melo, but let’s examine a few baseline scenarios. Let’s begin with Miami’s starting position.

Heat’s current 2014-15 situation

Miami has seven players who might be under contract for next season: LeBron, Wade, Bosh, Udonis Haslem, Chris Andersen, Norris Cole and Justin Hamilton.

LeBron ($20,590,000), Bosh ($20,590,000) and Wade ($20,164,000) have early termination options, which are functionally similar to player options. Haslem ($4,620,000) and Andersen ($1,448,490) have player options. Cole’s salary ($2,038,206) is fully guaranteed, and Hamilton’s ($816,482) is fully unguaranteed. The Heat also have two draft picks – Nos. 26 and No. 55.

Hamilton is good as gone. Miami could easily dump Cole and its first-round pick, which comes with a guaranteed salary, without taking back salary. If Andersen and Haslem opt in, I believe the Heat could also trade them without returning salary – perhaps attaching the first-round pick to Haslem as a sweetener if necessary.

Free agents continue to count against the cap, but other than LeBron, Bosh and Wade – who would terminate their contracts in almost any plan –  Miami could easily renounce everyone else.

Essentially, if required to sign Melo, I believe the Heat could fairly easily pare their roster to just LeBron, Wade and Bosh.

There might be some emotional attachment to casting off Haslem and even Andersen and Cole. But remember, Pat Riley practically gave away Michael Beasley in 2010, just two years removed from Miami drafting Beasley No. 2 overall and one year from him making the All-Rookie team, in order to pursue LeBron and Bosh. I think Riley would overcome any internal dilemma based on nostalgia if it meant getting Melo.

So, the rest of this post will suppose the Heat clear their roster to just LeBron, Wade and Bosh.  It also uses the latest projected salary cap, $63.2 million with a $77 million luxury tax, for 2014-15 and predicts the cap will continuously rise by the same amount it’s projected to increase this year.

How much money would everyone sacrifice?

Once Miami’s roster is down to just LeBron, Wade and Bosh – all of whom terminated their contracts in this scenario – cap holds will leave the Heat over the cap. LeBron, Wade and Bosh would each count at 150 percent of their previous salary, and Miami would have nine roster charges (equal to the rookie minimum salary) to reach the minimum roster of 12.

Once LeBron, Wade and Bosh re-sign, though, their 2014-15 salaries would replace their free agent amounts. Then Miami could use its remaining cap room to sign Melo.

Under that scenario – if everyone wants to get paid the same amount, which we’ll call the equality plan – each of the now-big four would make $14,658,494 in 2014-15.

If LeBron, Wade and Bosh re-sign first, they could get higher raises (7.5 percent vs. 4.5 percent) and longer contracts (five years vs. four years) than Melo, so maybe Miami’s original big three would take lower starting salaries and arrange to be on par with Melo over the long run. But for now, we’ll focus on matching salaries only next season.

Of course, $14,658,494 is much less than any of the four could make next season.

Here’s:

  • Max for Melo – both if he stayed with the Knicks or left – and his salary in the equality plan (gold)
  • Max for each  LeBron, Wade and Bosh – they have the same possible max – and their salary in the equality plan (red)

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Melo 2015 2016 2017 2018 2019 Total
Max if re-signs $22,458,402 $24,142,782 $25,827,162 $27,511,542 $29,195,922 $129,135,810
Max if signs elsewhere $22,458,402 $23,469,030 $24,479,658 $25,490,286   $95,897,375
Equality plan $14,658,494 $15,318,126 $15,977,758 $16,637,391   $62,591,769

 

LeBron, Wade, Bosh 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Total
Max if
re-sign
$20,659,633 $22,209,105 $23,758,578 $25,308,050 $26,857,523   $98,133,256
Equality plan $14,658,494 $15,757,881 $16,857,268 $17,956,655 $19,056,042   $69,627,847

Melo would be forgoing about $67 million over his max with the Knicks or $33 million over his max elsewhere. LeBron, Wade and Bosh would each be surrendering about $29 million.

For the Heat, this would be a huge bargain. The salary cap would restrict their ability to sign all four players – and there’s nothing Micky Arison could do about it. Essentially, the rules prevent him from spending, so if LeBron, Wade and Bosh want to pursue this plan, they would have no standing to even negotiate for higher collective salaries.

Miami would then have the room mid-level exception ($2,732,000) and minimum contracts to fill its roster. By design, it’s difficult for teams to add salary quickly once they’ve gone under the salary cap.

The luxury tax would be no concern at all.

For a year.

LeBron, Wade and Bosh can get paid again soon

If LeBron, Wade and Bosh re-sign, Miami would retain their bird rights. A key facet of bird rights: A team can go over the cap to re-sign players with the.

However, because free agents continue to count against the cap until signing, teams have a very limited ability to sign outside free agents and then exceed the cap to re-sign their own free agents. Hence, LeBron, Wade and Bosh would have to cut their salaries to make room for Melo this offseason.

But they wouldn’t need to make room for Melo next offseason.

LeBron, Wade and/or Bosh could sign a one-year deal – rather than a five-year deal – with the same starting salary as the equality plan. Then, next offseason, they could re-sign for max contracts – and significant raises.

Realistically, they would sign a two-year contract with a player option. That way, they could still become free agents in 2015 but would have an extra year of salary protection in case they determine their stock had fallen. (Options can only occur in the final year of a contract, so any deal longer than two years would delay getting a new max contract.)

The Heat would not hold Melo’s bird rights for three years, so he couldn’t take advantage of this plan until 2017. He’d likely receive a four-year contract with a player option regardless.

Here’s:

  • Annual salaries for each LeBron, Wade and Bosh in the equality plan and if they opt out as quickly as possible to re-sign for the max (red)
  • Annual salaries for Melo in the equality plan and if he opts out as quickly as possible to re-sign for the max (gold)

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Melo 2014-15 2015-16 2016-17 2017-18 2018-19 Total
Max if re-signs $22,458,402 $24,142,782 $25,827,162 $27,511,542 $29,195,922 $129,135,810
Max if signs elsewhere $22,458,402 $23,469,030 $24,479,658 $25,490,286   $95,897,375
Equality plan $14,658,494 $15,318,126 $15,977,758 $16,637,391   $62,591,769
Equality plan with early opt out $14,658,494 $15,318,126 $15,977,758 $25,093,282 $71,047,660

 

LeBron, Wade, Bosh 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Total
Max if
re-sign
$20,659,633 $22,209,105 $23,758,578 $25,308,050 $26,857,523   $98,133,256
Equality plan $14,658,494 $15,757,881 $16,857,268 $17,956,655 $19,056,042   $69,627,847
Equality plan with early opt out $14,658,494 $22,137,516 $23,797,830 $25,458,143 $27,118,457 $28,778,771 $127,290,716

New contract from one signed in 2014 is italicized

Projecting the 2017-18 salary cap – and therefore Melo’s max as a free agent in 2018 – is so difficult this far ahead, I didn’t even bother with how a multi-year max contract signed then would play out over its duration.

In the same vein, though far less turbulent of an estimate, LeBron, Wade and Bosh would be relying on the salary cap making another large jump 2015-16. I think that’s quite possible, but there is risk.

There’s also risk in accepting a one-year or even two-year deal with a player option. If a player gets hurt or struggles for other reasons, he might make less than had he just accepted a five-year guaranteed contract. Remember, I’m examining max salaries under these scenarios. Players aren’t guaranteed the max.

But if this worked, LeBron, Wade and Bosh could sacrifice about $6 million each in 2014-15 and then make similar salaries in coming years to the max possible had they signed this offseason.

Melo would sacrifice about $24 million over the next four seasons. So, if they plan to opt out in a year, it would make even more sense for LeBron, Wade and Bosh to accept lower starting salaries than Melo.

If LeBron, Wade and/or Bosh opt out next summer to seek bigger contracts, that could make this pursuit much more expensive for Arison. Would he go for it?

What about a plan that gets expensive for the Heat owner immediately?

Signing-and-trading for Melo

Miami could also acquire Melo in a sign-and-trade. That would make the apron – $4 million above the luxury-tax line – rather than the salary cap the key threshold. With a project cap of $63.2 million and luxury tax of $77 million, that’s a lot of extra wiggle room – and money to pay a big four.

In a sign-and-trade route, if they each want the same starting salary, LeBron, Wade, Bosh and Melo could each make $18,190,703 in 2014-15. That’s a significant jump from the $14,658,494 they could each make by signing Melo through cap space (especially because raises in future seasons are based on initial salary).

If the big four collectively maximizes its salary in a sign-and-trade scenario, there would be a host of complications. The Heat would have no room to sign anyone other than nine minimum-salary players and couldn’t add any salary in a trade for a year.

Of course, completing a sign-and-trade for Melo alone would be complicated. Miami, New York and several players would have to agree – making this a big longshot.

Essentially, the Heat would have to sign-and-trade their own free agents – other than LeBron, Wade and Bosh, of course – to the Knicks.

All players signed-and-trade must receive three-year contracts, but only the first year must be guaranteed. Fortunately for the Knicks if they want to go this route, they won’t have cap room this offseason anyway, even if they lose Melo. So, taking a guaranteed year of salary should be no problem. The Heat can structure all their outgoing contracts so they’re fully unguaranteed for 2015-16 and 2016-17, allowing New York to waive them and maximize its 2015 cap room.

But Miami can’t just re-sign one free agent to a salary equal to Melo’s and send him to New York. Anyone in a sign-and-trade whose salary increases by more than 20 percent brings up base-year-compensation issues and probably requires a third team to make the deal work.

However, the Heat might have enough free agents to complete a sign-and-trade on their own. (Even if renounced, a team can sign-and-trade its own free agents.) If Miami signs-and-trades Mario Chalmers, Shane Battier, Toney Douglas, James Jones, Michael Beasley and Greg Oden on contracts equal to 120 percent of their 2013-14 salaries, that would be enough to acquire Melo with a 2014-15 salary of $18,190,703 – his equality-plan number in a sign-and-trade scenario.

Of course, those six players must agree to leave Miami for New York. Why would they? The way Chalmers has struggled in the Finals, he might not make $4.8 million elsewhere any other way. Battier could participate and then retire, a way to leave an even stronger legacy in Miami. Douglas, Jones, Beasley and Oden are bit players who probably couldn’t get more money elsewhere. They’re just in the right place at the right time. (If Haslem opts in, the Heat could use him in place of Chalmers. Haslem would have no say in it.)

And why would the Knicks agree? For one, Melo would have to convince them he’s leaving regardless. The Heat would also have to send draft picks to make it worth their while. But remember, if everything else comes together, it’s easy to structure a dual sign-and-trade as not to interfere with New York’s 2015 cap space.

As before, Melo would be subject to a short contract and smaller raises than the Heat’s current big three, but all four players come out ahead of the cap-space model.

Here’s:

  • Annual salaries for each LeBron, Wade and Bosh in the equality plan and if Miami gets Melo in a sign-and-trade (red)
  • Annual salaries for Melo in the equality plan and if he joins the Heat in a sign-and-trade (gold)

image

Melo 2014-15 2015-16 2016-17 2017-18 2018-19 Total
Max if re-signs $22,458,402 $24,142,782 $25,827,162 $27,511,542 $29,195,922 $129,135,810
Max if signs elsewhere $22,458,402 $23,469,030 $24,479,658 $25,490,286   $95,897,375
Equality plan $14,658,494 $15,318,126 $15,977,758 $16,637,391   $62,591,769
Equality plan with early opt out $14,658,494 $15,318,126 $15,977,758 $25,093,282 $71,047,660
Equality plan with S&T $18,190,703 $19,009,285 $19,827,867 $20,646,448   $77,674,303

 

LeBron, Wade, Bosh 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Total
Max if
re-sign
$20,659,633 $22,209,105 $23,758,578 $25,308,050 $26,857,523   $98,133,256
Equality plan $14,658,494 $15,757,881 $16,857,268 $17,956,655 $19,056,042   $69,627,847
Equality plan with early opt out $14,658,494 $22,137,516 $23,797,830 $25,458,143 $27,118,457 $28,778,771 $127,290,716
Equality plan with S&T $18,190,703 $19,555,006 $20,919,309 $22,283,611 $23,647,914   $86,405,840

New contract from one signed in 2014 is italicized

However, what’s a win for LeBron, Wade, Bosh and Melo is not a win for Arison, at least not directly. Acquiring Melo in a sign-and-trade and filling the team to the hard cap of the apron would give the Heat a 2014-15 payroll of $87 million, including luxury-tax payments. On the hook for so much guaranteed money, they’d likely face the tax annually – and the repeater penalty.

This sign-and-trade plan, though it offers substantially higher salaries than using cap space, can be combined with the opt-out plan to get even more money to LeBron, Wade and Bosh as soon as 2015 and Melo as soon as 2017.

But a sign-and-trade, with all the moving parts, is so unlikely, let’s just stop here.

A compromise

No matter what, LeBron, Wade, Bosh and Melo must collectively compromise to make this happen. That’s the new Collective Bargaining Agreement working.

The document just can’t completely prohibit players from sacrificing salary to build a team as they see fit.

So many variables remain, including what each of the four key players desires, where the cap is set and whether Miami moves its other players. There’s a lot to sort out.

But – scaled up or down depending on other influences – here’s what might work best if LeBron, Wade, Bosh and Melo are committed to making a big four:

  • No sign-and-trade. It’d be difficult, though not impossible, to get everyone else on board.
  • Haslem and Andersen opt out.
  • Miami trades Cole and its first-round draft pick for future picks.
  • Wade signs a four-year contract that starts higher than the equality-plan salary, because he gave up the most money in 2010. It’s the last major deal of his career.
  • Melo signs a four-year contract with a player option that starts higher than the equality-plan salary, because he has the most to gain by signing elsewhere and gets the smallest annual raises. After the third year, he opts out and re-signs to get a higher salary, potentially the max.
  • LeBron and Bosh each sign two-year deals starting below the equality-plan salary with player options. After next season, both opt out and re-sign for five-year max contracts.
  • The Heat re-sign Haslem to the room exception and Chris Andersen and Ray Allen to minimum contracts.

Will it happen? Who knows?

But it’s definitely workable.

Spurs advance: San Antonio beats Grizzlies 103-96 in Game 6

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MEMPHIS, Tenn. (AP) — The San Antonio Spurs wanted no part of playing a seventh game against the Grizzlies, not with the Houston Rockets looming in the next round.

Kawhi Leonard scored 29 points, and the Spurs advanced to the Western Conference semifinals by beating Memphis 103-96 on Thursday night to take the series 4-2.

Spurs coach Gregg Popovich congratulated Memphis on a great year, especially rookie coach David Fizdale.

“I’m seriously thrilled that we were able to get through that first round,” Popovich said. “That’s the good news. The bad news is that now we have to go play Houston.”

The Spurs now have beaten Memphis four of the five playoff series between these teams, and this was San Antonio’s second straight win over the Grizzlies in the first round. But this was the first time all season that the visiting team won.

“It’s huge for us,” Spurs guard Tony Parker said. “Memphis, you have to give them a lot of credit. They played unbelievable. They’re a great team, and they made it hard on us and so we didn’t want to come back for Game 7. We treated this game as if it was Game 7. We wanted those days off before playing Houston because it’s going to be a fast-paced game against them.”

Parker added 27 points on 11-of-14 shooting, while LaMarcus Aldridge had 17 points and 12 rebounds. San Antonio outrebounded Memphis 46-28, with 16 of those offensive boards. That led to 17 second-chance points.

Fizdale said rebounds, points in the paint and who pressured the best impacted each game in the series.

“I kept stressing that to our guys,” Fizdale said. “To their credit, (the Spurs) won it more games than we did. But it definitely wasn’t from a lack of competition on our part. I can sleep at night knowing my guys battled and competed their tails off.”

The Spurs’ semifinal with Houston will start Monday night in San Antonio.

Mike Conley scored 26 points, leading the five Memphis starters in double digits. Marc Gasol added 18.

The Grizzlies fell to 3-10 in elimination games, losing six straight.

This was a taut game with 16 ties and nine lead changes, especially with four ties in the fourth quarter.

The Spurs took control after the Grizzlies went up 88-81 on three free throws from Conley with 6:29 left. Then Leonard scored eight straight for San Antonio, starting a 22-8 run to finish the game.

“The guys were amazing in the fourth quarter,” Spurs guard Manu Ginobili said. “Huge plays. Great defense too. So, happy to go back home with a win and win the series.”

Even with Conley and Gasol a combined 2 of 10 in the first quarter, the Grizzlies trailed only 24-22 after Conley knocked down a 3 at the end of the quarter for his first bucket of the game. Conley hit another 3 for the final shot in the second quarter, putting Memphis up 50-45. The team that led at halftime won each of the first five games.

Parker hit his first six shots before finally missing his seventh with 29 seconds left in the first half.

The Grizzlies took their biggest lead at 57-47 on a 3-pointer by James Ennis III. That gave Memphis as many made 3s (9 of 17) as the Spurs had attempted (3 of 9) at that point. Randolph’s layup with 7:19 left matched that 10-point lead at 63-53.

Then the Spurs went on a 13-3 run over a 4-minute span to erase that lead on Aldridge’s three-point play at 67-66. Aldridge finished with nine points in helping the Spurs lead 75-74 at the end of the quarter.

TIP-INS

Spurs: They improved to 36-15 with a chance to clinch a series under Popovich, who took over in the 1996-97 season. … Ginobili converted a four-point play with 1:31 left in the third, putting the Spurs up 73-69. … The Spurs wound up tying the Grizzlies’ reserves with 16 points thanks to Mills.

Grizzlies: The Grizzlies set a franchise record hitting eight 3-pointers in the first half, topping the previous mark of seven in the second half May 1, 2005, against Phoenix. … Conley has 20 or more points in five straight playoff games, the longest such streak in franchise history.

HE SAID IT

Popovich: “I’m thrilled we were able to win because if we played 10 times, we each would probably win five.”

FREE THROW WATCH

Fizdale earned a $30,000 fine from the NBA for his “Take that for data” rant about the free throw discrepancy in Game 2. Well, Leonard was 9 of 10 at the free throw line through three quarters compared to the Grizzlies’ 7 of 8. The Spurs were 18 of 20 through three quarters. The Spurs finished 22 of 25 compared to 20 of 24 for Memphis.

 

Cavaliers celebrate Raptors win over Bucks because they don’t have to practice (VIDEO)

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The Toronto Raptors closed out the Milwaukee Bucks on Thursday night in Game 6, 92-89. Toronto’s social media team even tried trolling the Bucks about it.

In any case, the Raptors now move on to the second round, despite their best efforts, to face the Cleveland Cavaliers.

The Cavaliers, meanwhile, have been waiting for an opponent after sweeping the Indiana Pacers.

Cavaliers wingman Richard Jefferson — a Snapchat legend, it should be mentioned — took to the social media platform to celebrate playing the Raptors.

Er, or maybe just the fact that the team didn’t have to practice Friday.

Via Twitter:

Cleveland’s biggest test before the Finals might just be the Raptors, and we will get to see them head-to-head in the second round.

Raptors troll Bucks after closing in Game 6 with RapsIn6.com website (VIDEO)

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Despite a disastrous fourth quarter performance, the Toronto Raptors closed the series against the Milwaukee Bucks on Thursday night. The Raptors came away from Game 6 with a 92-89 victory and a chance to take on the Cleveland Cavaliers in the second round.

Meanwhile, the rivalry between the Raptors and the Bucks appears to be alive and well, as the Raptors pushed a video on social media after the game ended that was pointed toward the Bucks.

In it, the Raptors mascot registers a domain name for the team at RapsIn6.com, then proceeds to sip tea in the style of the famous Kermit meme.

In case you are out of the loop, this is a reference to Brandon Jennings saying Milwaukee would beat the Miami Heat in six games back in 2013.

Meanwhile, game ops at the Bradley Center in Milwaukee played the theme song from the children’s TV show “Barney” during Raptors player introductions.

Nothing really happens if you go to RapsIn6.com. There’s nothing on the website save for the video the Raptors posted to social media, which you can watch above.

Toronto has their core together and presumably will for a little while. The Bucks are a growing young team. I’m cool with them duking it out in the postseason for years to come.

Bucks storm back at home, Raptors hang on for 92-89 win, advance to second round

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Nothing can be easy for the Raptors.

They were cruising, up 25 in the third quarter, whipping the ball around on offense, hitting threes, making sharp rotations on defense, and generally overwhelming a Bucks team that did not look ready for the moment.

Then everything changed. The Raptors offense went ice cold, and the ball movement stopped, and the Bucks were getting big plays from Giannis Antetokounmpo and — out of nowhere — Jason Terry. Across the third-and-fourth quarters the Bucks went on a 34-7 run, hitting 5-of-7 from three, one of those a Terry three to put the Bucks up 80-78.

The Raptors then responded like a veteran team, going on a 9-0 run led by DeMar DeRozan, who was the best Toronto player in the series. The Bucks had their chances, but shot 6-of-14 on free throws in the fourth, and Milwaukee started to look tired like the comeback had taken too much out of them. They made the mental mistakes of a young team learning hard lessons.

Toronto hung on for a 92-89 win, and they take the series 4-2.

The Raptors will open their conference semifinal series against the Cavaliers on Monday night in Cleveland.

The star of the night for Toronto was clearly DeRozan, who finished with 32 points on 12-of-24 shooting. Beyond that, he was quick with the recognition of double-teams and was moving the ball, plus had a key defensive play late. However, his biggest moment was this dunk.

The Bucks came out with some desperation early. Antetokounmpo had 14 in the first quarter and got his team off to a good start, but the Raptors settled down, got the ball inside, kicked out for threes, and led by 28-24 at the half.

Milwaukee fell into playing a lot of isolation basketball, while the Raptors were moving the ball and finding the mismatches. The result was a 13-point second quarter from the Bucks (who shot just 3-of-17 from outside the paint in the first half and 1-of-9 from three), and a 51-38 Raptors lead at the half. DeRozan had 16 at the break.

The second half saw the Raptors seem to pull away, going up 25 at one point and being in total control.

Then the Bucks made it interesting. It started with a 15-3 run at the end of the third, which carried over to the fourth quarter and soon the lead was in single digits. The key was some ball movement for the Bucks, some made threes, great play from Antetokounmpo.

However, the larger issue was the Raptors just came apart on offense. From the 6 minute mark of the third quarter through the middle of the fourth, the Raptors were 4-of-16 shooting total, 2-of-8 from three, and that was led by DeRozan suddenly going 1-of-6. The Raptors let them back in the game.

What veteran teams know how to do — and what the Bucks are still learning — is how to bounce back from those stretches. Kyle Lowry made some solid plays, DeRozan dunked, the Raptors got some stops, and they found a way to hang on for the win.

DeRozan and Lowry — 13 points — were the only Raptors to finish in double figures.

Antetokounmpo had 34 for the Bucks and carried his team for long stretches. Khris Middleton added 19, and Matthew Dellavedova had a dozen off the bench.