The Miami Heat's free agency plans are clear.
"I'd like to run this thing back," Heat president Pat Riley said matter-of-factly late Wednesday night during a Zoom session with reporters.
Riley made this statement about two hours after the Heat added athletic Memphis big man Precious Achiuwa with the 20th pick in the NBA Draft, and fewer than 48 hours before free-agent negotiations were allowed to begin Friday at 6 p.m.
This has been the Heat's plan for weeks, as Riley noted during his season-ending press conference in October that the team's plan is "to take care of our own, as much as we can." That means working to keep most of this past season's roster that won the Eastern Conference intact while also trying to maintain salary-cap flexibility for a possible 2021 offseason run at a superstar like Giannis Antetokounmpo, a balancing act that is doable but would take concessions from both the organization and players.
After center Kelly Olynyk opted in Thursday to his $12.6 million player option for 2020-21, the fourth and final year of the $50 million deal he signed with the Heat in the summer of 2017, Miami's current salary-cap breakdown for this upcoming season looks like this: Jimmy Butler ($34.4 million), Andre Iguodala ($15 million), Olynyk ($12.6 million), Bam Adebayo ($5.1 million), Tyler Herro ($3.8 million), Duncan Robinson ($1.7 million), Kendrick Nunn ($1.7 million), KZ Okpala ($1.5 million), Chris Silva ($1.5 million), and the projected $2.6 million cap hit for Achiuwa. In addition, a $5.2 million waive-and-stretch cap hit for Ryan Anderson is still on Miami's books, as well as a $350,000 waive-and-stretch cap hit for AJ Hammons.
Add all that up, and the Heat has about $85 million committed to 10 players for this upcoming season with the 2020-21 salary cap set at $109.140 million. Teams are allowed to carry up to 20 players during training camp and the preseason, and up to 15 players under standard contracts during the regular season.
That means the Heat can create up to $22 million in cap space, including cap holds, if it renounces the rights to its six impending free agents: Jae Crowder, Goran Dragic, Udonis Haslem, Solomon Hill, Derrick Jones Jr. and Meyers Leonard.
But to keep this past season's roster intact, Miami's plan would instead be to take advantage of Bird rights to retain its free agents. The Heat owns Bird rights with all six players, which allows NBA teams to exceed the salary cap in order to re-sign their own free agents.
Miami also extended a qualifying offer to two-way contract guard Gabe Vincent to make him a restricted free agent in advance of Thursday's deadline, allowing the team to match outside offers from others. Miami's other two-way contract player from last season, center Kyle Alexander, did not receive a qualifying offer from the team.
"I have great faith in our guys," Riley said when asked how optimistic he is the Heat will be able to re-sign most of its free agents. "I think we have great chemistry. I think they have the same feeling themselves. But now we're getting down to the business side of things and I totally get it and I totally understand what free agency means to players. The fact that the core of our team is intact. Our young players are intact. Just the other day, we fully guaranteed both Duncan and (Nunn). So with our free agents, we're going to sit down and we'll talk to them. I feel good about it, but you just never know what's going to happen from that standpoint."
Haslem announced last week that he'll return to the Heat for an 18th season. He's expected to sign a one-year, $2.6 million veteran minimum contract with Miami, but he would count only about $1.6 million against the salary cap in this scenario because of NBA salary-cap rules.
The Heat's other five impending free agents have not declared their intentions yet, with negotiations allowed to begin Friday.
With the Heat's plan to bring back the core of last season's roster, it becomes less about how much cap space Miami has and more about how much room it has below the luxury tax line. The Heat is expected to operate as an over-the-cap team as opposed to a room team in order to try to back most of last season's roster, and it will also have the ability to utilize a $9.3 million midlevel exception, a $3.6 bi-annual exception and a $7 million trade exception.
The Heat stands about $45 million from the tax line of $132.627 million after accounting for Haslem's minimum deal. That's the amount of money Miami has to bring back its own free agents.
Re-signing Crowder and Dragic are top priorities for the Heat this offseason since both started and played well during this postseason.
With about $45 million to spend, the Heat could hypothetically offer Crowder a one-year, $12 million deal (a raise from his salary of $7.8 million this season) and Dragic a one-year, $20 million deal to bring them back. The thinking would be to offer them more money than other teams would, but only on a one-year deal to protect 2021 cap space.
This is where Crowder and Dragic would have to choose whether to stay with the Heat on a lucrative one-year contract (possibly featuring a team option in the second year) or jump to another team that offers long-term security. There's strong optimism that Dragic will re-sign with the Heat, and there's hope Crowder will follow suit depending on outside offers he receives from teams.
If Crowder and/or Dragic demand a multiyear deal from Miami, it puts the Heat in a position of choosing between the importance of keeping the core of the roster intact and preserving 2021 max-level cap space.
In this hypothetical scenario, Crowder and Dragic both opting to take those one-year offers for a combined $32 million to remain with the Heat leaves Miami with about $13 million to spend before it gets to the tax line.
The Heat can then use all or part of its $9.3 million midlevel exception to sign an outside free agent or split between multiple outside free agents on a one-year deal even though it's already above the cap. Among potential midlevel targets who could interest Miami are Paul Millsap, Aron Baynes, Wesley Matthews and Danilo Gallinari.
Miami could also use the $13 million it has under the tax line to work on deals to bring back its other impending free agents — Jones, Hill and Leonard — on one-year contracts.
Or the Heat could do a little of both, and use just a portion of its midlevel exception on an outside free agent to have more money to bring back its remaining impending free agents.
As for those three impending Heat free agents:
— According to a league source, the Heat has expressed interest in re-signing Jones, and Jones' preference is to stay in Miami. But with the Heat expected to try to avoid the luxury tax this upcoming season after finishing this past season as a tax team, Jones could end up signing elsewhere if the math does not work out with the Heat.
— The Heat is expected to have a conversation with Hill once free agency opens Friday, according to a league source. Although Hill played only limited minutes after he was traded to Miami in the middle of this past season, he had a consistent rotation role with the Memphis Grizzles before the deal. It's tough to gauge what the market will be for Hill in free agency.
— Leonard made it known during a recent interview with the Miami Herald that he is looking for a chance to win a championship and a "significant role" that he defined as "20 to 25 minutes per game whether that's starting or coming off the bench." Leonard added, "I'm not going to sit here and tell you that I would come back to Miami because I loved it so much that I'm willing to sit on the bench. I won't do that." There's definitely mutual interest between Leonard and the Heat, but it could be hard for Miami to promise consistent playing time especially after drafting Achiuwa.
Another important part of this plan is Adebayo's extension. Miami can extend the All-Star center's rookie-scale contract until Dec. 21, the day before the start of the regular season. He will earn $5.1 million next season in the final year of his rookie deal whether he signs an extension this offseason or not.
This is a complicated issue because Adebayo deserves an extension, and the Heat obviously wants the 23-year-old to be part of its long-term future. But extending Adebayo this offseason would prevent Miami from having max-level cap space in 2021.
With training camp opening in early December in advance of a Dec. 22 start to the season, the next few weeks will be full of important decisions for the Heat.
And if Miami has its way, most of last season's roster will be back for another run together before possibly big changes in the 2021 offseason.
"You have almost two seasons where the competition at its best has been really compressed from that standpoint," Riley said, referring to a two-month break between the end of the 2020 Finals and the start of the 2020-21 season. "So I think running this team back and just keeping continuity of what we had and seeing what happens with our free agents from that standpoint, that we will have some flexibility under the tax to do some things.
"If we do (bring most players back), then I think we're going to be in rhythm and we have a team that has great chemistry. There's not going to be a lot of learning. It will take Precious some time probably to get really indoctrinated to what Spo wants to do. But I feel good about it. I feel confident. If we don't get everybody back, then we do have a number of ways to fortify the team, to improve the team also."
