This summer will all be about sacrifice for the Miami Heat.
In wake of their loss to the San Antonio Spurs, which ended in five not-so-close games, it’s clear that they need a facelift — especially their second unit; the one that got outscored 206-109 to the Spurs’. However, if Chris Bosh, Dwyane Wade and LeBron James all opt-in to the fifth year of their six-year contracts, it’ll set the Heat back $67.8 million* right from the get-go, putting them $4.6 million over next season’s projected salary cap of $63.2 million. It’s also $9.2 million shy of the luxury-tax threshold, which doesn’t give the franchise a lot of wiggle room to revamp the roster when they only have four players under contract next season — the other being Norris Cole.
* The Heat amnestied Mike Miller last season, so that figure includes the $6.6 million remaining on his contract. The move itself saved the Heat $17 million in luxury taxes just this season, according to ESPN.
As a result of the new CBA, teams get penalized heavily for going over the luxury-tax threshold. It’s likely that the Heat would exceed that said threshold yet again to reconstruct their roster if the Big Three opt-in, and because they’ve surpassed that limit in each of the last three seasons, they qualify for the “repeater tax,” which essentially adds an extra dollar per dollar spent over the tax level.
The $13.3 million in luxury tax Micky Arison had to fork over in 2012-2013 was the most he has ever had to pay for the team. (To rub salt into the wound, it was nearly twice the amount he paid when the Heat won the championship in 2012.) Yet if the Heat’s cap ends up being at $81.5 million next season — certainly possible seeing as they’d need to sign another 11 players — they’d “only” pay $15.8 million in tax if they weren’t a repeat offender; however, seeing as they are, they’d pay $25.6 million, per Reddit.
There is one way they can avoid this though, and that’s if the Big Three opt-out of their current contracts and sign new, less exhaustive ones to free up space for management to work with. They did it in 2010, each leaving approximately $15 million on the table to join forces. However, seeing as Wade is fresh off of a dismal showing in the Finals and is due nearly $42 million over the next two seasons, there’s a strong chance he opts-in. He took a bigger pay cut than Bosh and LeBron in 2010 — albeit, a tiny one in the grand scheme — and this will likely be his last chance to bring in the big bucks. LeBron may not want to spend the prime of his career on a team that is face-to-face with these kinds of monetary issues. If he becomes a free agent, he’ll have every team knocking down his door, offering him everything he could ever ask for (which might be more than the Heat can offer him at this stage). Bosh has said time-and-time again that Miami is home to him and that his days of being a number one option are long over, but — similar to LeBron — if the right opportunity comes up with the right team at the right price, it’s not crazy to think that he could be coaxed away, especially if LeBron and Wade both decide to leave.
At the end of the day, it’ll come down to how confident they — LeBron, Wade and Bosh — are that Pat Riley can surround them with talent that’ll bring them another championship. By waiving their early termination offer, it’s unlikely management can accomplish that task without going deep into the tax; something Micky Arison probably doesn’t want to do. Being in a weaker Eastern Conference certainly helps their cause when it comes to adding to their core — they got the number two seed this season even with Wade sitting out nearly half of the games, and they waltzed their way into the Finals before losing to the Spurs — but it became clear that they’ll need a big lift to win another championship.
Funnily enough, if there is a team the Heat can learn from in this scenario it’s the Spurs.
Following their collapse to the Oklahoma City Thunder in the 2012 Playoffs, Tim Duncan took a huge pay cut, from $21.16 million in 2011-2012 (making him the third highest player player in the NBA that season) to $9.65 million in 2012-2013. As a result, the franchise freed up some much needed space to re-sign Boris Diaw, Danny Green and Patty Mills; all of whom played an instrumental role in the Spurs’ victory this season. Manu Ginobili signed a two-year, $14 million contract last off-season following his disappointing play in the Finals. It cut his salary in half and allowed the Spurs to re-sign Tiago Splitter to a four-year, $36 million contract. Finally, Tony Parker — the team’s best player for the last few seasons — is only the highest paid player by a small margin. Despite being a three-time member of the All-NBA Second Team and six All-Star appearances, he has never signed a max contract. Instead, the four-year, $50 million extension he agreed to in 2010 was the biggest one of his career.
There’s value in sticking together, and the Heat have something in place that they know works. (Four straight trips to the NBA Finals and two championships is a good testament to that.) They’ve got some big decisions to make this summer with the likes of Mario Chalmers, Rashard Lewis and Michael Beasley becoming free agents, and with Shane Battier and Ray Allen (likely) retiring. They can certainly build this team back up to what it was in 2013, when they beat the Spurs in seven games, but it’ll take some sacrifice on behalf of the Big Three to make that happen. If LeBron, Wade and Bosh all opt-in, Pat Riley will have a tough time building a team that meets their needs. Yet if they opt-out and sign new contracts, the lure of playing alongside perennial All-Stars could attract highly coveted free agents. And who knows, maybe it’ll be enough to bring Carmelo Anthony down to South Beach.