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)

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

 

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.

LeBron James recalls six turnovers with striking precision (video)

AP Photo/Charles Krupa
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LeBron James showed off his memory after the Cavaliers’ Game 1 loss to the Celtics, detailing every play of the beginning of the fourth quarter:

He was at it again after Cleveland’s Game 5 loss to the Celtics last night.

Asked about his six turnovers, LeBron perfectly described six turnovers:

The turnover LeBron very noticeably said went off Jeff Green‘s hands was actually assigned to Green. So, that meant LeBron omitted one of his own:

Still, this was incredibly impressive. It was also maybe a little passive-aggressive, the way LeBron notes the ball going off Green’s and J.R. Smith‘s hands.

So, it was quintessential LeBron.

Celtics top Cavaliers in Game 5, setting up Game 7 in Boston?

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LeBron James and a couple Cavaliers teammates left the court well before the Celtics dribbled out their 96-83 Game 5 win Wednesday.

The Cavs are already moving on.

Game 6 will be Friday in Cleveland, and the Cavaliers – down 3-2 in the Eastern Conference finals – must win to avoid elimination. The way Boston has played on the road, it’s even easy to look ahead to Game 7, which is scheduled for Sunday in Boston.

Still, the Celtics bought themselves leeway with their decisive win in Boston tonight. They led by double digits the final 20 minutes, breaking the Cavs’ momentum after two straight wins in Cleveland.

“It’s tough going on the road, playing against somebody else in their house with their crowd,” said Jayson Tatum, who had 24 points, seven rebounds, four assists, four steals and two blocks tonight. “So, we were just comfortable. We came back home and defended home-court like we have all playoffs.”

Boston is now 10-0 at home this postseason – but just 1-6 away. Fueled in part by that historic split, no game in this series has been close. All five have been decided by at least nine points, and the average margin of victory – 18 – is in the 97th percentile for largest ever in a 3-2 best-of-seven series.

So, just as two big Celtics wins in Games 1 and 2 didn’t deter the Cavaliers, this one likely won’t, either. The Cavs should be heavily favorited in Game 6.

Beyond, if it gets that far? That’s a much bigger tossup.

Teams up 3-2 in a best-of-seven series have won 85% of the time. But Boston is missing a key reason it secured home-court advantage, including a chance to break the 2-2 at home rather than on the road – Kyrie Irving. And LeBron James is downright scary in a Game 7, even on the road.

The Celtics at least took care of business tonight, showing a far greater sense of urgency than Cleveland. Brad Stevens changed his starting lineup, inserting Aron Baynes for Marcus Morris, and tightened his rotation to just seven players until garbage time. Boston ran the floor much harder than the Cavs, decisively outrebounded them and beat them to loose balls. Even in altercations, the Celtics had a man advantage.

LeBron (26 points, 10 rebounds five assists and six turnovers) never made his presence felt in the way usually necessary for the Cavaliers to win. Cleveland’s four other starters combined to score just 24 points, two fewer than LeBron did himself.

After Boston seized control early, the Cavaliers made few adjustments in strategy or effort – as if they’re saving those for later.

LeBron James says we don’t know full story of his upbringing, but he’ll reveal it after retirement

AP Photo/Ron Schwane
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LeBron James was on the cover of Sports Illustrated in high school – as a junior.

He has been in the spotlight ever since, somehow living up to the outsized expectations set while he was a teenager. His story has been told and retold – how he and his mom moved around Akron as she struggled to provide for him, how his athletic ability lifted himself and those around him.

But are we missing key details?

Upon passing Kareem Abdul-Jabbar for most shots made in the playoffs, LeBron reflected on his journey.

LeBron:

To know where I come from, you guys know a little bit of the story. But you guys don’t know the full story about where I come from and the struggle that I had. You guys know about the single-parent struggle, and y’all done heard that story. But there’s a lot more to it, which I’ll talk about when I’m done playing ball.

But to know where I come from, small city 35 miles south of here, and to hear I’m in the same category or talked about and jumping these greats in the playoffs — it’s like I was a kid and I watched the playoffs so much and I was like, I would love to be a part of that, that moment, that atmosphere. I think it’s pretty cool. You hear the scoring, the field goals made, and for a kid that really doesn’t care much about scoring.

Like with LeBron’s secret motivation a couple years ago, I’m totally intrigued. When LeBron decides to share, I’ll be all ears.

Larry Nance Jr., Marcus Morris and Terry Rozier exchange shoves after whistle (video)

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Marcus Morris fouled Larry Nance Jr. in Celtics-Cavaliers Game 5 tonight. Nance didn’t like that, got up and shoved Morris. Morris and Terry Rozier didn’t like that, and both shoved Morris.

All three received a technical foul, which seems fair.