As the eyes of many NBA fans shift towards the postseason, some front office executives are thinking about how they can improve the fates of their franchises that are not currently vying for postseason play. The pre-draft process is filled with tons of scouting, evaluation periods, internal discussion and workouts for some of the hopeful rookies that want a spot in the NBA.
Taking the drafting needs and picks into consideration, financial considerations can paint the biggest picture to what decisions will be made beyond the draft. Trading some players, utilizing cap space for taking on others, and preparing for free agency all are highly informed by the team's salary situations – after all, the NBA is a business.
Two Eastern Conference teams that made the playoffs and had early first-round exits have expensive rosters moving forward: the Washington Wizards and Miami Heat. Both are on unique timelines and interesting crossroads with how to build their rosters to win based on their cores. How will each team navigate the postseason?
2017-18 Record: 44-38
2018 Draft Picks: none
Restricted Free Agents: none
Unrestricted Free Agents: G Dwyane Wade, G Wayne Ellington, F Luke Babbitt, F Jordan Mickey, F/C Udonis Haslem
Other Players of Note: G Rodney McGruder (non-guaranteed contract), C AJ Hammons ($1.54 million of a dead cap hit for next year)
Committed Salary: $119,034,903
Luxury Tax Room: $3.4 million
Miami will begin to feel the repercussions of the Tyler Johnson offer sheet once July 1st hits, the cost that the Heat had to pay two years ago in order to keep Johnson. His contract jumps from $5.8 million annually to $19.2 million, and that massive near $14 million increase, when coupled with the Josh Richardson extension that cuts in this year, raises the Heat's salary status dangerously close to the luxury tax bill. There are five roster spots to fill, and the Heat are only $3.4 below the luxury tax (and $9.4 million from the tax apron, where penalties start to be paid to the league).
How will they balance filling those spots with competitive players while avoiding heavy luxury tax penalties? Without any draft picks that becomes more difficult, and many of their players under contract don't hold a ton of value on the trade market.
Order of Operations
1. Rectify with or move on from Hassan Whiteside?
The Heat are struggling to balance Whiteside's beliefs about his abilities, role and playing time versus the needs of the team. The center and coach Erik Spoelstra butted heads frequently during the late part of the season and the playoffs, where Whiteside struggled to guard perimeter-oriented big men and was abused by the likes of Joel Embiid. Hassan still believes in his strengths and wants to be treated like the star player of the organization. Miami's great asset - their depth and versatility - drove Spoelstra to look elsewhere for answers when Whiteside wasn't working out. The result could be lasting damage to their relationship.
Whiteside will make $25.4 million in 2018-19, and has a player option for $27.1 million the next year. Finding someone willing to eat that $52 million for a problematic shot blocker won't be easy. Trading Whiteside can't be done with a sweetener in the way of draft picks, so to get him off the books Miami would have to either give up a desirable young piece or take back some less than desirable pieces. This isn't to say Hassan has no value on the trade market whatsoever, but there are only a few teams left that have the need for a starting center and could commit that amount of money to a big man.
There are a few deals that could be out there for the Heat. They could call Sacramento, assuming the Kings don't get a franchise-caliber center in the draft, and offer Whiteside for Zach Randolph, Garrett Temple and Harry Giles. The same could be said for Phoenix, shipping him west for Tyson Chandler, Jared Dudley and the 2019 Milwaukee Bucks pick. Dallas could get involved for Wes Matthews and a heavily protected first-round pick. Even trading him in division for Nikola Vucevic, Terrence Ross and a second-round pick could provide Miami the needed flexibility.
Part of trading Whiteside is about getting back a quality big man that can either start or come off the bench to have an important impact, but the biggest gain would be cap space in 2019. Those three deals offer potential for both, as well as naturally finding more bodies to fill out the roster for next year without needing to spend in free agency.
2. Let Wayne Ellington go
Ellington is, other than Dwyane Wade, the team's most important free agent. Wade is expected back on a veteran's minimum deal, but Ellington likely is looking for one last payday. He's a big-name shooter at a position that's in demand this summer, and his play from last season should mean there will be plenty of suitors ready to throw the Mid-Level Exception at him. That MLE should be worth around $8.8 million.
Miami doesn't have Ellington's full Bird rights, meaning they could offer him anything as an over-the-cap to retain his services. Instead they hold his Early Bird rights, which allow them to offer a maximum of 105 percent of the average player salary (projected to be at around $8.6 million). That number, dollar for dollar, is just a shade less than a full Mid-Level Ellington could procure elsewhere. Unless Ellington has some allegiance to Miami, it could take the Heat offering a fourth year on a contract to keep him in South Beach.
With the Heat already at $119 million, adding nearly $9 mill more to retain one player pushes them too close to the luxury tax to have flexibility elsewhere – it would be inevitable that they go over the tax apron unless they shed salary elsewhere. At his age, and with the financial commitment that would bog the team down as a result of retaining him, it might be best to simply not try and match full Mid-Level offers for Ellington.
Heat fans won't be happy to see such an important cog in their rotation go, as Ellington shot 39 percent from deep last season. But for all those supporters doubting they can find an adequate replacement, consider this: Ellington is already 30 years old, and keeping him would likely require signing him until he's 33 or 34. Shooters like Ellington log plenty of mileage and, in the way Spoelstra utilized him, that leads to frequent wear and tear. With his limited defensive impact and strong performance in a contract year as indicators he might not be worth the investment, it isn't terrible if the Heat don't decide to keep Ellington.
3. Find a gem in Summer League
There are two main ways the Heat can add to their roster with new players this summer: the Mid-Level Exception and through looking at undrafted rookies. The Mid-Level, likely to be dropped down to $5.45 million so they avoid the tax, could net them a decent piece next year, but also adds a good deal of expense moving forward.
The other route is the one with more sway for the organization since they've proven able to find gems through their G-League program or undrafted rookies with their scouting department. Miami needs to fill out the bottom end of their roster with youth – it's the most cost-efficient way to do so, adds tremendous upside and brings long-term trade value to their group. Being nudged against the tax and with few holes in their rotation to fill, now is the time to take a flier on one or two young players.
Watch what the Heat do this summer closely and who their top performers are. They love versatile pieces, have a strong G-League program run by Nevada Smith, and will undoubtedly unearth at least one more diamond in the rough.
4. Swing a trade for an alpha male?
This one will be pretty difficult for the Heat, and while their glaring need for a go-to option reared its ugly head in the postseason they simply lack the assets to trade for one. Pat Riley lacks the top ingredient in trading for a star player like San Antonio's Kawhi Leonard: draft picks. Without first-rounders or many desirable pieces on their roster that can match salaries in a trade, it will be incredibly difficult to pull off a massive star.
Without fail, Riley will try. The Heat have a culture that lends itself to getting the most out of star players. With an experienced coach, plenty of win-now role players and a division that is wide open, Miami could be on the short list for some high-profile names that want a trade. Pulling it off and making the finances work is a different story though.
5. Stay below the luxury tax apron
Because the Heat have been below the luxury tax the past two seasons, the real line that ownership and the front office should seek to avoid is the projected $130 million luxury apron line. Being just $9 million and change short of the line right now, the Heat need to make sure they stay below that $130 million number. The key reason for that: going above that line two consecutive years would be incredibly costly, and Miami has very little by the way of roster turnover due in 2019. Because they won't have much money come off the books (and likely will add more) it will be difficult for them to duck the line next year if they aren't fiscally responsible this summer.
Many are expecting the Heat to make an aggressive play, shake things up and find ways to get more competitive in the Eastern Conference – we've come to expect as much from Pat Riley. But it seems to be in the cards for them to maintain their consistency and solid all-around approach, explore a Whiteside trade, and stay out of the heavy fire on a seller's market.
2017-18 Record: 43-39
2018 Draft Picks: 15th, 44th
Restricted Free Agents: none
Unrestricted Free Agents: G Ty Lawson, F/C Mike Scott, G Tim Frazier, PG Donald Sloan, F Chris McCullough
Other Players of Note: SG Jodie Meeks ($3.45m player option), F/C Jason Smith ($5.45m player option)
Committed Salary: $124,302,351
Luxury Tax Room: -$302,351
Everybody within the Wizards organization is on edge. For a team that has proudly touted themselves as a legitimate threat in the Eastern Conference the last few years, their middling record and lack of postseason success suggest otherwise. Washington played up or down to the level of their competition frequently, and struggled through injuries and identity crises. Hopefully the "they're better off without John Wall" crowd is silenced and the Wizards can get back to touting the point guard as their franchise player.
The Wall-Beal partnership, long wondered to be contentious, could be an issue moving forward. Those two and Otto Porter are all signed for at least the next three seasons, with the trio earning up to nearly $100 million in 2020-21. Combine them with a somewhat expensive glut of role players and there's little hope the Wizards take a big step forward without a financial commitment elsewhere or a bit of reshaping the roster. It could mean opening one of these three building blocks to the market.
Order of Operations:
1. Duck the luxury tax... Step One: Stretch Ian Mahinmi
The Wizards went into the luxury tax for the first time in franchise history last year, and appear to have no end in sight to their spending. With only $5.7 million between them and the tax apron line, where they'd have to pay a steep repeater tax, Washington will have to be very savvy if they want to avoid paying too much money for a roster that isn't a legitimate championship threat.
The first step to that could come this summer by waiving center Ian Mahinmi via the stretch provision. That provision allows a team to stretch the remaining guaranteed money owed to a player out over 2x + 1 of the remaining years of the contract. Mahinmi, who is owed $31.7 million over the next two years, could be waived and have that money stretched over a five-year span. That could give Washington a costly $6.35 million cap hit until July 2023 - but it would save just under $10 million for next season.
The Wizards don't want to eat $6 million in cash, and the cost of trading him to another team to eat that financial burden is likely in the range of multiple first-round picks, way too high a price to pay. If the Wizards need a little bit more of a blanket and want to make things work with their core without blowing it up, they will consider waiving Mahinmi.
Once this is done, the Wizards will have five open roster spots, $9.5 million before the luxury tax and $15.5 million before the tax apron. That should give them plenty of room to make whatever decisions they find necessary to add players to their core.
2. Marcin Gortat, finding a starting center and "free agency via trade"
Many of the issues chemistry-wise seem to stem from the relationship between John Wall and Marcin Gortat. While the two are connected in their play when things are going well, they both have strong words for each other and flamed out down the stretch. Gortat is already 34, had one of the worst statistical seasons of his career and is on the downslide of his career. He's owed $13.6 million in the 2018-19 season and will be a free agent afterwards.
Now is the time for a tax-saddled team like Washington to explore trading him for a center that is their long-term solution as a starter. If Gortat rides out the remainder of his contract in Washington they'll be without a center and lack the cash to grab a starting-caliber one on the market. Their best course of action is essentially "free agency via trade", where they use Gortat's expiring now to absorb a long-term contract from a team looking for cap space. The $13.6 million from Gortat needs to match incoming salary, and while that on its face might not get them a starting-caliber center, the market of teams looking for cap space could mean it's a seller's market and the Wizards squeeze extra value out of this move.
Finding a trade partner that needs both 2019 cap space and has a salary-matching center isn't exactly easy. Some names that come to mind: Denver and Mason Plumlee and Charlotte and Cody Zeller. If the Wizards want to add a higher-profile name, they'll likely have to package another player and potentially a pick with Gortat to get who they want.
3. Take the best player available in the draft
Over the last few years the Wizards have struggled to find depth and have not drafted at a high level. They should value having the 15th pick in the draft as a blessing in disguise to add another piece that will help them long-term. Their salary situation and the amount of guaranteed money tied up in their Big Three over the next few years dictates the need for low-cost, high-impact players if they are going to compete in the East. Instead of trading this pick to create immediate financial flexibility, they should keep this pick and trade future lottery protected first-round selections if they must offload salary.
With all the changes to their frontcourt that are needed, the Wizards aren't in a position where they must draft a center in order to fill the void. Their roster is still thin enough on the bench and in need of enough pieces that drafting the best player available at 15th should be their top priority.
4. Mid-Level Exception: Split it or use it in full?
Here's the downside to Washington's model of paying high-end players at the top of their rotation and having to fill out their bench annually with minimum contract players: they're forced to play those guys heavy minutes, so they outperform the value of their contract and become too expensive for the Wizards to retain. This style of roster management hinges on hitting year after year in the veteran minimum market – especially for a team that doesn't have a history of drafting well. That exact scenario is why Mike Scott might be too expensive for the team unless they use their Mid-Level Exception on him.
Why is that so relevant this offseason for the Wizards? The Wizards could break that mold with how they utilize their Mid-Level Exception this summer. By spending it all on one player, that would force the trend to continue, and mean Washington needs to sign at least two or three veteran minimum players to fill out the roster. Or, by splitting their Mid-Level among a couple of bench and rotation guys, they would minimize the need for Vet Minimum guys that need to make an impact.
It's an interesting dilemma for the Wizards, and one that President Ernie Grunfeld must be prepared to tackle early in the summer. To complicate matters, the full Mid-Level Exception has enormous value this summer with a truncated market, so a good player would likely be available through this means. Signing such a player, however, would likely hard-cap the Wizards and further tighten their budget this summer -- almost mandating the stretching of Mahinmi.
5. Kelly Oubre Extension: What's the line in the sand?
Oubre is in a unique bargaining position with the Wizards as he becomes extension eligible this summer. His agent should be able to tell that the team needs Oubre long-term, and the biggest way to ensure he's there is to lock him up this summer. Washington will want to keep him below market value, but without the leverage or desire to get into a bidding war for him next year, they will likely pony up and give Oubre a player-friendly deal.
The question becomes where the line in the sand is for the Wizards to walk away from the negotiating table and risk Oubre as a restricted free agent in 2019. He's been a bit of a headache to deal with over the last three years, has shown flashes but inconsistent play and might be blocked to long-term minutes by Otto Porter. Paying a frustrating long-term backup an exorbitant amount of money is a quick way for the Wizards to handcuff themselves. Losing Oubre for nothing would be a difficult blow as well. Grunfeld and company should negotiate with severe caution.
Head Boys Basketball Coach, Boys' Latin School (MD).