A year ago, Heat president Pat Riley ended his postseason news conference with a reminder.
“We’ll be back.”
The statement came after the Heat were swept in the first round by the eventual champion Milwaukee Bucks, and indicated that roster changes were coming.
The additions helped the Heat win their most games since the 2013-14 season and earn the top seed in the Eastern Conference.
The successful regular season eventually came to a crashing halt with Miami losing in seven games to Boston in the conference finals.
Roster status: Championship but concerns with health, age and cost
State of the team
The Heat front office has taught us to never underestimate it.
In recent years Miami pulled off two complicated sign-and-trades, first acquiring All-Star Jimmy Butler from Philadelphia, and then last August, Kyle Lowry from the Raptors, despite being pressed against the luxury tax heading into the 2019 and 2021 offseasons.
Those acquisitions came after the Heat missed the playoffs in 2019 and got swept in the first round in 2021.
The opportunity to build out the Heat’s roster this offseason likely will not occur with a blockbuster trade but with their own free agents (notably Victor Oladipo and Caleb Martin) and minor tweaks.
The Heat have $135.7 million in guaranteed contracts with $96 million earmarked toward Butler, Lowry and Bam Adebayo.
Butler and Adebayo are close to untouchable in any trade.
Lowry has $58 million remaining on his contract and struggled healthwise to stay on the court this season and has regressed overall. Before posting 18 points and 10 assists in the Game 6 win in Boston, he’d averaged 5.6 points and shot 26.7% during the playoffs, missing eight games because of a right hamstring injury.
Lowry drew 25 charges this season (third most in the NBA) but overall struggled defensively in the regular season.
Opponents blew by Lowry on 43.8% of drives this season, the highest percentage in his career since player tracking began in 2013-14, per Second Spectrum Tracking. Opponents shot 49.2% with Lowry as the closest defender, also the highest field goal percentage in his career.
He ranks 13th in total minutes among active players, right behind the 76ers’ James Harden.
The remaining $40 million in salary consists of the $16.9 million owed to Duncan Robinson, P.J. Tucker (if he opts in), Tyler Herro and four players on minimum contracts: Max Strus, Gabe Vincent, Omer Yurtseven and Haywood Highsmith.
Miami is challenged to cobble together enough salary to put in a trade.
Robinson is guaranteed $65 million over the next four years, and until Game 5 of the Boston series he played a limited role during the playoffs.
During the regular season, he scored 20+ points in 13 games and the Heat had an offensive efficiency of 115.2. Miami was 12-1 in those games.
If Miami is willing to part ways with him to improve the roster or perhaps in a salary dump, his contract alone is likely not enough.
The cost could come down to one of the Heat’s role players (Strus, Vincent and perhaps Herro if an All-Star becomes available) and possibly a first-round pick. The Heat are allowed to trade their own first in June and in 2023, 2028 or 2029.
Herro is extension eligible and a new contract would contain a poison pill restriction, making the guard close to untradable during the season.
Miami is $13.3 million below the luxury tax before free agency begins, and despite the Heat’s limited budget, they do have the resources (more on that below) to keep this team together and improve in free agency without a trade.
The question will come down to if the Heat are willing to pay the luxury tax for the first time since the 2019-20 season.
By avoiding the luxury tax the past two years, the Heat hit the pause button on the clock to start the repeater tax and avoided paying a significant penalty in the future.
For example, the Warriors are considered a repeater tax team because they paid a penalty in four out of the past five seasons. Instead of a $131 million tax bill, Golden State owes $170 million this year.
A downside of entering the tax is that unlike this season, when Miami is projected to receive a $10.5 million distribution from teams like the Warriors and Nets, the financial relief next year is voided.
Herro recently earned Sixth Man of the Year honors while averaging 20.8 points but has struggled as a starter and has been inconsistent in back-to-back playoffs. So what salary does he merit now?
The answer will help determine if Herro and the Heat reach an agreement on a rookie extension before the season starts or if the guard enters restricted free agency in 2023.
On the court, there is no denying the value that Herro brings, especially in the fourth quarter.
Herro shot 42.3% on 3-pointers in the fourth quarter, ranking sixth among players with 100+ 3-point attempts, per ESPN Stats & Information research. Overall, he scored 361 points in the fourth quarter, 12th most in the NBA while playing the sixth-most total minutes of any player this season. In the playoffs, Herro became the first player in Heat history to score at least 25 points and 5 assists in a game. He did that in a Game 1 win versus Philadelphia.
But Herro struggled in the fourth quarter during the postseason, shooting 28.6% from the field and 15% from 3 in the fourth quarter. His minutes from the regular season also dropped from 9.8 to 8.2 in the fourth quarter.
In the four-game sweep last year to the Bucks, he shot 31.6% both from the field and 3.
The numbers during the regular season back up the argument that Herro is more comfortable coming off the bench than starting.
In his 10 games as a starter, Miami went 5-5.
What does this all mean as it relates to a new contract?
Herro is not a max player like his teammate Bam Adebayo, and if a new agreement is reached it will come with a compromise from both sides.
Herro has little leverage when considering that the Heat are competing against a mid-October deadline (the last day before the start of the season) and not opposing teams with cap space to make an offer. There is no urgency to get a deal done in early July unless of course it benefits the team and the player. An extension in July would be unprecedented considering that only the Celtics’ Robert Williams has signed a non-max extension in the first month of free agency since 2016.
Herro’s former teammate Justise Winslow is the only player in Heat history to sign a non-max rookie extension. That agreement was reached right before the deadline and contained a team option in the last year of the contract.
Herro is certainly going to get a starting salary larger than the $13 million that Winslow received in the first year.
Besides averaging a career-high 20.8 points this season, Herro had 18 games of seven or more rebounds and 22 games of five or more assists. His 20 25-point games this season are the most since Ricky Pierce in 1990-91.
Jeff Schwartz, his agent, should use the four-year, $107 million Jaylen Brown extension as a comp.
That contract started at $23.8 million and was heavily laden with incentives in each season.
Brown averaged 13 points in the season prior to signing the extension and came off the bench in 49 out of 74 games.
Schwartz should also point to the inefficient Heat offense in Games 4 and 5 versus the Celtics, both losses and games that Herro missed with a strained groin.
In the two games, Miami shot 32.6% from the field and 20-of-81 from 3.
The Heat should point to the four-year, $90 million deal Mikal Bridges signed in Phoenix last October.
Bridges finished second in Defensive Player of the Year voting and was named first-team All-Defense.
If an extension is not reached, the Heat would face a 2023 offseason with both their starting and backup shooting guards as free agents: Strus and Herro.
The Heat in 2023 have only four players (Adebayo, Butler, Lowry and Robinson) under contract but are over the cap with $126 million in salary.
The free agents
The Heat are $13.3 million below the luxury tax but do have the resources to keep their own free agents if they are willing to pay a financial cost.
It begins with P.J. Tucker.
Tucker signed a two-year, $14.3 million deal last year and has a $7.3 million player option for 2022-23.
Will that mean the forward opts out and looks for a more lucrative contract with another team, or declines the option and signs with the Heat for the maximum allowed $8.4 million, which represents a $1.1 million raise?
“I told [my agent] that I feel better now than I felt when I was 31 and 32,” Tucker told Andscape’s Marc Spears. “And he was like, ‘Yo, what?’ I feel like during those two or three years I hit my prime. I’m still in the middle of my prime. From my body to my mind, and the way I play the game and understanding how to win, to be a real winner, I feel like I’m hitting my prime, and it’s crazy, man, to be 36, about to be 37 [Tucker turned 37 on May 5] and still feel like that.”
The market outside of Miami for Tucker is in the $6-8 million range, comparable to his salary for next season. If Tucker signs elsewhere, the Heat would have the full $10.3 million midlevel exception available to use.
When the Heat traded for Victor Oladipo in March 2021, the thought was the former All-Star could impact the playoffs that season.
“I think Victor Oladipo will give us an entirely different kind of player than we have on our team,” Heat president Pat Riley told the media then. “Victor gives you a slasher, and a runner, and a quick player, he’s a scorer.”
Little did anyone realize that the statement was meant not for the 2021 playoffs, but this year.
The journey of Oladipo since he ruptured his right quad in late January 2019 is well documented.
There was a brief 33-game sample with the Pacers, Rockets and Heat before he reinjured that same quad in an April 2021 game with Miami. He would eventually require surgery and did not appear in a game until March of this year.
Oladipo is not the same player he was before the injury but has shown signs in the small sample of games this season in Miami of what the future could look like. He averaged 30 points in his last two regular-season games, shooting 11-for-20 from 3. In the closeout win versus Atlanta, he scored 23 points and followed that up with 19 points in Game 2 versus Philadelphia. He recorded nine steals in the conference finals but struggled offensively, shooting 29.5% from the field and 33.3% on 3-pointers.
The Heat have Bird rights on Oladipo and, despite their being over the cap, there are no restrictions on money or years with his next contract.
Oladipo right now is not the $20 million player we saw in Indiana before his injury, nor is he someone who will receive offers for the veterans minimum exception like last offseason.
The free-agent class of two-way wings is weak, and Oladipo should see offers starting at the $6.4 million tax midlevel and up to the $10.3 million full midlevel.
Caleb Martin proved his value during the regular season and eventually saw his two-way contract converted for the remainder of the season.
In 60 games, Martin averaged 9.1 points (13.7 points in 12 starts), shooting 50.7% from the field and 41.3% from 3.
Martin will become a restricted free agent once the Heat tender him a $2.1 million qualifying offer.
Because he signed a one-year contract, the starting salary of a new contract for Martin is $2.2 million (non-Bird) and up to the $6.4 million tax midlevel exception.
Dewayne Dedmon has early Bird rights and Miami can sign him to a contract up to $10.9 million but for no less than two seasons.
The Heat can also sign him using the non-Bird exception that starts at $3.1 million.
Dedmon has proved to be a reliable backup but could be expendable because of his potential cost (plus roster flexibility) and the play of Omer Yurtseven.
In his 12 games as a starter this season, Yurtseven averaged 12.8 points and 12.7 rebounds.
The Heat also have a secret weapon with their player personnel department when it comes to identifying undrafted players and eventually signing them to low-cost contracts.
“It’s an organizational philosophy of ours,” coach Erik Spoelstra told ESPN. “We’ve done it now for several years. We know what we’re looking for. We’re not for everybody, but we love to be dream makers.”
Miami’s undrafted players racked up nearly 40% of its total points this season, second best in the NBA. Robinson (10.9 points per game), Strus (10.6 PPG), Caleb Martin (9.2 PPG) and Vincent (8.7 PPG) accounted for nearly 80% of those 3,595 points.
Each one of those players was signed to the veterans minimum exception.
Offseason cap breakdown
Miami Heat 2022-23 salary breakdown
Guaranteed salary: $128.5M
Total salaries against tax: $135.6M
Tax level: $149M
Tax room: $13.3M
Resources to build the roster
Own first-round pick
Own free agents: Oladipo, Dedmon and Martin
Future assets: Can trade a 2023, 2028 or 2029 first
Exception: $10.3 million midlevel and $4.1 million biannual
Cash: $6.3M to send or receive in a trade
Dates to watch
JUNE 29: Forward P.J. Tucker signed a two-year, $14.3 million contract last offseason but with a player option in the second year. Tucker started 70 games this season, averaging 7.6 points and shooting a career-high 41.5% from 3. If the option is declined, Tucker can sign a new contract with the Heat up to $8.4 million (a $1.1 million raise off the player option). The market for Tucker in free agency outside of Miami projects to be the $6.4 million tax midlevel.
JUNE 29: Do not expect Gabe Vincent, Max Strus and Omer Yurtseven to hit waivers at the end of June. The three players are on non-guaranteed contracts and have played a role either starting or coming off the bench.
JUNE 29: Former two-way player Caleb Martin is eligible to receive a $2.1M qualifying offer. Martin averaged a career-high 9.2 points and shot 50.7% during the regular season.
JULY 1: The $1.8 million non-guaranteed contract of Haywood Highsmith will increase to $50K in protection if he is not waived. The remaining balance of the contract has no salary protection.
Besides Herro, there are no players on the roster who are extension eligible.
The draft assets
The Heat have their own first this June.
They owe Oklahoma City a top-14 protected first in 2025 and an unprotected first in 2026 if not conveyed in the prior season.
Here’s how ESPN’s Jonathan Givony has Miami selecting in June:
No. 27: Trevor Keels, Duke, PG/SG
Few teams have been as successful drafting in the first round as the Heat have over the past few years. The team seems to prioritize finding young players who fit its mentality culturally and have room to grow in Miami’s strong player development infrastructure. Keels is one of the youngest prospects in the draft and brings the type of toughness, feel for the game and winning spirit the organization covets. Improving his body and finding more consistency as a perimeter shooter are priorities for Keels moving forward, something he could elect to try to do with another year in college, potentially. — Givony