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.

Writer recants report that Larry Bird resigned as Pacers president because team didn’t spend enough

Pacers executive Larry Bird
Joe Robbins/Getty Images
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The report from ESPN’s Jackie MacMullan that Larry Bird resigned as Pacers president because the team didn’t spend enough?

Never mind.

Pacers release:

Statement from Larry Bird

“A published report indicated that I left my position as President of Basketball Operations in 2017 because ownership was not willing to spend “big money” and that it frustrated me enough to step aside. Nothing could be further from the truth. I want everyone to know I left there because it was time for me to move on from the Pacers.

“I had worked with Kevin Pritchard and at that time I felt Kevin was ready to take over and he has proven that. I can’t thank Herb and Mel Simon, along with Pacers Sports & Entertainment, for the opportunities to, at first, coach, and then later move into the front office.”

Statement from ESPN senior writer Jackie MacMullan:

“About three weeks ago during a discussion on the podcast The Hoop Collective, I misspoke when I expressed my opinion regarding the business practices of the Indiana Pacers, and inferred that Larry Bird had been frustrated during his time as team president. It was a careless remark, based solely on my opinion, and therefore should have never been said. Larry Bird never expressed those feelings to me, and I apologize to both Larry and team owner Herb Simon for poor choice of my words.”

I don’t know why the Pacers bothered quoting Bird, who still works for the organization as Advisor to the President of Basketball Operations. MacMullan’s clear recantation says everything necessary (and speaks to her integrity and humility).

It’s good this story got cleared up.

Some things that remain true:

Three Things to Know: Is it time to worry about the Laker offense?

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Every day in the NBA there is a lot to unpack — especially with games spread out every day in the bubble — so every weekday during the NBA restart we are here to help you break it all down. Here are three things you need to know from yesterday in the NBA.

1) Is it time to worry about the Laker offense?

The Los Angeles Lakers have the worst offense in the bubble.

We’re not just talking about the 86 points on 35.2% shooting in Wednesday’s loss to Chris Paul and the Thunder, although that was a low point.

Four games into the NBA’s restart, the Lakers are scoring less than a point per possession while shooting 39.4% overall and 25.2% from three. Their offense has been worse than the Wizards in Orlando — and how many Wizards starters could you name right now? The Lakers’ starting five — LeBron James, Danny Green, Kentavious Caldwell-Pope, Anthony Davis, and JaVale McGee — have a dreadful 74.4 offensive rating though four games (and a -30.1 net rating).

Or, since a picture is worth 1,000 words, take a look at the Lakers’ shot chart in the restart.

That’s a lot of red.

Should Lakers’ fans be worried?

Probably not. This is some small sample size theater with just four games. Coach Frank Vogel has been playing around with the lineup rotations, things haven’t been playoff tight. Plus, after the Lakers beat the Clippers opening night they had the top seed all but sewn up, there hasn’t been real motivation for L.A. to play its best.

More importantly, don’t worry because this team still has LeBron James (although he shot just 42% overall and 27.3% from three over the last four games). They still have Anthony Davis, who has been one of the MVPs of the bubble so far. Those two form the best pick-and-roll combo in the league, and so long as they are on the roster the Lakers have a chance to win it all.

The shooting is a concern — and not a new problem. The Lakers were a below-average shooting team in the season before the shut down (21st in the league on open look three-point percentage). We’ve watched LeBron’s play cover up the flaws in a team and take them to the Finals for years, and it certainly could happen again, but the Lakers shooting — and right now their entire offense — is a concern.

2) Philadelphia’s Ben Simmons leaves game with a knee issue

Non-contact injuries keep fans and coaches up at night, which is why Philadelphia’s Ben Simmons walking off the court with a limp and going straight to the locker room with a knee issue Wednesday was very concerning.

Simmons did not return to the game after that.

The good news is there is reportedly no swelling and the MRI came back clean, reports Shams Charania of The Athletic. Officially, Simmons is day-to-day.

Simmons had eight points on 2-of-10 shooting when he left the court. Through three games of the restart — where he is playing more off the ball as a power forward — he’s averaged 11.7 points and seven rebounds a game.

3) Memphis lost again, now 0-4 and could fall out of the eighth seed

The Grizzlies came to the NBA’s restart in Orlando with a 3.5 game cushion for the eighth seed, all they had to do was hold on to that through eight games. Now, after and 0-4 start, that lead is down to just one game over Portland.

On Wednesday, Memphis couldn’t slow down what had been a previously struggling Utah offense and lost 124-115.

The Grizzlies next four games? The Thunder, Raptors, Celtics, and Bucks. Memphis is going to have to find a couple of wins in there without Jaren Jackson Jr., who is out for the rest of this season with a torn meniscus in his left knee.

Before games started in the bubble, the idea of two teams passing Memphis — meaning the Grizzlies would fall even out of a play-in series for the eighth seed — seemed impossible. Right now, both the Pelicans and Spurs are just two games back, and both have soft schedules the rest of the way.

Memphis wanted to get some playoff experience for their talented young roster during the restart. Well, this is it — every game becomes must-win now for the Grizzlies. They need to be a focused team that finds another gear. For them to hold on and get in a play-in series will require a couple of wins in their last four.

The race for eighth in the West remains the best thing at the NBA restart. On Thursday Portland faces Denver, while New Orleans takes on winless Sacramento.

LeBron James: On behalf of basketball community, we won’t miss Donald Trump’s viewership

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NBA players kneeled for the national anthem.

President Donald Trump called the protest – which is meant to call attention to racism, particularly through police brutality – “disgraceful” and said he stopped watching games.

And in yet another predictable turn in this news cycle, Lakers star LeBron James fired back at Trump.

LeBron:

I really don’t think the basketball community are sad about losing his viewership, him viewing the game.

And that’s all I’ve got to say. I don’t want to – I’m not going to get into a – because I already know where this could go, where it could lead to for tomorrow for me. I’m not going to get into it.

But I think our game is in a beautiful position. And we have fans all over the world. And our fans not only love the way we play the game – we try to give it back to them with our commitment to the game – but also respect what else we try to bring to the game and acknowledge what’s right and what’s wrong.

And I hope everyone – no matter the race, no matter the color, no matter their size – will see what leadership that we have at the top in our country and understand that November is right around the corner. And it’s a big moment for us as Americans. If we continue to talk about we want better, want change, we have an opportunity to do that.

But the game will go on without his eyes on it. I can sit here and speak for all of us that love the game of basketball. We could care less.

LeBron has frequently criticized the president. Trump has also criticized LeBron. That’s how it goes.

In this case (and others), LeBron has the moral high ground. Kneeling during the national anthem is a patriotic act designed to make the United States a better place for all its people to live – something far more noble than saluting a piece of cloth during a song.

However, LeBron is wrong to speak for the entire basketball community. A lot of people love basketball. They don’t all hold the same political views. Some care about remaining in the good graces of the president of the United States, whomever that is. Some even care about the approval of Trump specifically.

Is there a limit on how much you love basketball if you’d stop watching because of a peaceful protest before a game? Obviously. But there’s still room to love basketball and also care about other things.

LeBron doesn’t have to personally dignify people who care both about basketball and Trump. But LeBron shouldn’t try to speak on their behalf, either.

LeBron’s rebuke would have been powerful enough (and more fair) on its own.

 

Jazz forward Joe Ingles joins Grizzlies huddle, drapes arms over Memphis players (video)

Jazz forward Joe Ingles vs. Grizzlies
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Jazz forward Joe Ingles has no boundaries with huddles.

Ingles invaded the Grizzlies huddle today, even putting his arms around – and some weight on – Dillon Brooks and Grayson Allen. Gorgui Dieng appeared to notice the intruder just before the video cut away:

Beyond the hijinks, Ingles also scored 25 points – including 12 in the fourth quarter – to lead Utah to a 124-115 win.