Salary Series: The Miami Heat and Their Self Made Prison
Welcome to the first installment of the new BCB "Salary Series."
In these weekly posts, we will take a look at a particular player or team with an interesting salary structure.
For example, certain contracts around the league have with interesting incentives, rare escalating, or declining dollar amounts, or vary significantly from typical market value.
When it comes to teams, there will be a deep dive on their spending habits, how they got to their current position, and what they can do take advantage of their spending power. Conversely, if they are deep into luxury tax territory, we will look at what they can do to mitigate the damage as much as possible, both short-term and long-term.
Without further ado, I present Salary Series edition 1 featuring the Miami Heat.
This iteration of the Miami Heat was born out of necessity. On July 12, 2014, The Demi-God himself, LeBron James departed his second home of South Beach to return to Cleveland. A player as impactful and accomplished as King James is bound to leave an enormous vacuum in his wake...just ask the presently 9-36 Cleveland Cavaliers team.
When James departed in the Summer of 2014, he left behind a solid, if slightly underwhelming roster. Dwayne Wade was still an effective early 30's version of himself, Chris Bosh hadn't yet been diagnosed with blood clots in his leg, and veterans like Luol Deng were present across the board. Sadly, most of the contributors that season were either over the hill, or just out of their league. Zoran Dragic, brother of Goran Dragic returned to play oversees following this campaign, while recognizable talents like Shannon Brown and Danny Granger washed out of the league completely. (Only real ones remember Zoran Dragic. His stay in the NBA was short, but sweet.) The puzzle pieces just didn't fit...for the most part.
The next two seasons featured a whole lot of revolving door action while the Front Office swapped out young players and interesting veterans to find a combination that worked. Interestingly enough, two players from that failed 2014-2015 season managed to stick around long enough to find a place on this seasons roster: Hassan Whiteside and Tyler Johnson.
This is a perfect representation of the Heat Culture mantra that has been associated with this team for several seasons. From the get go, players know they are going to be required to sacrifice and put everything they have into winning games. So much so, that is pushes certain players away every season. This sometimes grueling lifestyle isn't for everybody.
James Johnson said it best in a 2017 article by HoopsHype: “This culture is real. We have the kind of practices where you can’t go out and hang out all night and think you’re going to be able to come to practice and really go hard because I’ll call you out, everybody on this team will call you out. We won’t leave it to the coaches to call you out. We take care of that ourselves.”
The "real ones" are certainly rewarded for their sacrifice, however. James Johnson himself was rewarded with a 3 year / $43,295,100 contract in 2017. We can certainly argue the value of such an investment by the Heat staff, but Johnson put himself in excellent position for a raise after his career year in 2016-2017. He produced career highs in scoring, (12.8) rebounds, (4.9) three point percentage, (34%) and assists (3.6) while delivering massive value as a secondary playmaker at the forward position. As for the holdovers from the 1st year A.L. (After LeBron) they got sizable paychecks as well.
Tyler Johnson is in the midst of a 4 year / $50,000,000 deal that was offered by Brooklyn, but matched by Miami a couple years back. Impulse buy? Certainly looks that way in hindsight. Whiteside made out even better by receiving a max contract in 2016 worth almost $100 million. His play this season is not indicative of a player worthy of that kind of green, but we'll save that rant for another day.
Back to the situation at hand. If we look at the combined salaries for these three players, it comes out to $59 million, or 58% of the total salary cap. That number stands at $101.9 million for 2018-2019. You're already behind the 8 ball financially if you're committing that much of your spending power to three role players. If we throw in two more salaries in the top six of their payroll (Waiters and Olynyk) the number balloons to $81 million and 81.4% of available salary cap space.
Notice something in common with all of these hefty contracts? With the exception of Whiteside's monstrous deal, they were all delivered within one month of each other. Talk about a spending spree.
We can blame two major factors for the Miami Heat's desire to load up on these contracts. The first is the departure of franchise altering talents. LeBron and Bosh departed for differing reasons, but they both commanded massive amounts of salary due to their All-Star level impact on the court. They each made $19,067,500 in 2013-2014, their last season together. Doesn't seem too extreme by todays standards, but things were different back then. For reference, the salary cap that season was $58.7 million. That means LeBron and Bosh made up 64% of the cap by themselves. Following their absence, Miami was left with tons of money to spend that also paralleled massive a salary cap surge.
What does the average human do when an exuberant sum of money lands in their laps? Gotta spend it on something.
The second reason Miami felt compelled to drop the cash was to remain competitive. This is an organization that has experienced three championship parades and a 27 game winning streak. They absolutely, completely allergic to losing. That ladies and gentleman, is where the necessity to maintain this roster came from.
As you can imagine, this drastically altered the landscape and trajectory of the Heat franchise. This team is now on the hook for $129,652,756 in salary payments this season. On top of that, 100% of it is guaranteed. Zoom out to next season, and that total rises to $132,644,229.
The Heat had absolutely no room to make roster additions this past offseason outside of a mini mid-level exception worth $5,125,932. That's not nearly enough to add an impact piece here. Even a high level backup will set you back at least $10 million these days. This left them with an extremely flawed roster going into this season.
Sure there are some nights where the defense and gritty play will carry them, but there's only so much great conditioning and hustle plays can do for you over the course of a 82 game season. The offense is a huge issue at times due to the lack of a top 30 offensive talent.
So all in all, this situation doesn't paint a pretty picture for their future. In spite of all this, there are still contracts on this roster with positive value. Consider the three young guns that have gotten a fair bit of hype lately for their strong play. Josh Richardson and Justice Winslow were both signed to rookie deal extensions recently. Both of these deals are less than five years in length and they don't exceed a payout of $13 million in any season. Bam is currently still on his rookie deal and will be for another two years, so he will also be quite the bargain for awhile longer.
So where do they go from here? The biggest need for this unit is obviously an offensive star, but acquiring one is easier said than done. Taking a look at guys who could be on the move, there are a few recognizable names that would fit the bill.
How about Jimmy Butler? He almost ended up moving south earlier this season and has publicly stated he wouldn't mind being a part of the Heat bunch. Unfortunately, he has already moved on to Philly and Miami won't have the cap space to sign him to his maximum deal, which would start at over $30 million per season.
Same goes for Kyrie. Uncle Drew is another individual who loves the way Miami goes about their business. This situation has the same hiccups as the one involving Butler. Boston obviously won't move him now and will take their chances in free agency. There wouldn't be enough money to secure him, anyway.
What another options do the Heat have? Since free agency pickups are out of their reach for at least another year, they'll have to look at trades to rectify this dilema. The previously mentioned young prospects on their roster serve as excellent trade pieces that any potential parter would love to acquire. It would be difficult to move on from those guys at serve as a new hope of sorts with franchise legends like Dwyane Wade moving on soon. That leaves the questionable contracts of the Johnson twins, Waiters, Olynyk, Dragic, and the downright heinous Whiteside deal as the other tools to make something happen.
We can't forget about the Golden Arm, though! Who wouldn't want one of the best deadeye shooters in the association? Not many others can quite improvise a shot on the move quite as nicely as Wayne Ellington. Much like Rocky getting creative with his workouts prior to his famed prize fights, Ellington has refined his shot through the crucible of high pressure contests. He will be a guaranteed hot commodity if he hits the open market due to these skills. If we throw together a quick ranking scale for active player, he would arguably come in at five after Curry, Thompson, Redick, and Korver. That's some elite company, no doubt.
Luckily for teams in need of shooting, Ellington might be on the move soon due to a lack of playing time. This is a prime opportunity for the Heat to unload some salary and get an additional draft pick back in return. Ellington's contract will cost the Heat around $9 million after accounting for the luxury tax penalty.
Even if the Heat decline to keep McGruder or Derrick Jones, who are on expiring contracts, they will be in the luxury tax with no real spending power. It's looking like patience will be key for the next season plus as they wait for the bloated contracts to run their course.
Baring a massive course correction, the curse of the 2017 spending spree will haunt the magic city for a little while longer.
Coming next week - Impossible Decisions Await the Boston Celtics