There was a lot of smoke around a potential Jimmy Butler move to Houston in the week leading up to free agency. The Rockets would have had to jump through a few hoops to get the deal done, as I wrote about last week, but it wasn’t nearly as complex as what the Miami Heat had to pull off in order to get their guy. Once Butler agreed to come to the Heat on a four-year max contract that will pay him $32.74 million for the 2019-20 season, it was up to Miami’s front office, led by president Pat Riley and cap guru Andy Elisburg, who have long been known for their creative cap solutions for the Heat, to make it work.
Miami has no way to open up enough cap space to sign Butler outright, so they had to work out a sign-and-trade with the Philadelphia 76ers, Butler’s old team. This brought with it the complication of matching salary; the Heat had to find a way to send out $26.11 million in salary in order to “match” Butler’s new salary of $32.74 million; they don’t have to match it exactly dollar-for-dollar, but they have to get close enough to satisfy the parameters set out in the Collective Bargaining Agreement.
Philadelphia also has to agree to take back that much salary, which wasn’t necessarily in their plans, as they wanted to move on from Butler and use the cap space created by his exit to sign other players. Miami initially found a third team in the Dallas Mavericks, but those trade talks fell apart after it was clear to the Mavs that they would have lost out on both Maxi Kleber and Dorian Finney-Smith in order to take on Goran Dragic, Kelly Olynyk, and Derrick Jones Jr. from the Heat. Dallas ended up just short in their available cap space to trade for those three players and still retain two key role players from last season, so they opted to call off the deal and keep their flexibility.
The next day, Miami found the solution for which they were looking, but it came at a high cost – instead of working a three-team deal with Dallas, they expanded the Butler acquisition into a four-team trade with Portland and the Los Angeles Clippers. The net result for Miami was that they shed the unwanted contract of Hassan Whiteside and took back Meyers Leonard from the Trail Blazers, but it cost them a first-round pick, which they had to send the Clippers for their participation in the move. In total, the Heat could have structured the deal as three separate trades: Whiteside for Butler, Richardson for Leonard, and a first-round pick to Los Angeles for $110,000 in cash. There is also the possibility that they structured it as the aggregation of Whiteside and Richardson for Butler and Leonard, which would make it two separate trades, but which route they went ultimately makes no difference to their post-trade cap sheet and both are legal.
From Portland’s point of view, the trade aggregated Leonard ($11.29 million) and Moe Harkless ($11.01 million), and brought back Whiteside, a legal maneuver that did not create a traded player exception for them. Philadelphia took Richardson ($10.12 million) into the ample cap space created by Butler’s departure, with enough leftover to sign Al Horford later on. Harkless went into the Clippers’ cap space, plus they picked up a first-rounder for their trouble.
Whether part of the trade or in a move before the trade was to be completed, Miami also had to duck the apron. Receiving a player in sign-and-trade, as Miami did here, subjects a team to the “apron”, which is set at $138.928 million this season. When a team is hard-capped at the apron, their team salary cannot exceed this number for any reason at any time. The apron is different from the luxury tax threshold in this way; under the rules of the tax, a team can go over the tax in the summer, then make a trade during the season to get back under and not pay the penalty as long as their team salary on the last day of the regular season doesn’t exceed the tax. For the apron, there is no such leniency; once a team is hard-capped, they are not allowed to have a team salary above that number for the remainder of the league year, which runs from July 1 to June 30. Acquiring Butler and figuring out the apron later was not an option for the Heat, so they either needed to find a trade to shed that salary or do so in the Butler trade itself.
As it turns out, they were able to shed the requisite salary in the four-team deal; sending Whiteside’s $27.09 million and Richardson’s $10.12 million offset most of the Butler-Leonard acquisition, though they’ll still make another move or two to fully open up the space below the apron for their arrival to Miami. The final result, after stretching Ryan Anderson and cutting Duncan Robinson, Yante Maten, and Kendrick Nunn, will look something like this:
They can also opt to keep as many of Robinson, Maten, and Nunn as they would like, as they’re going to need to fill the roster spots those guys vacate anyway. The most important move is to stretch Anderson’s $15.64 million guaranteed salary, which will save them more than $10 million off the apron and allow them to make the Butler trade legal. They can also try to find a trade for Anderson; perhaps Cleveland would be interested in moving J.R. Smith for Anderson’s salary, which would save the Heat more than $11 million and wouldn’t impact their future books the way stretching Anderson would. On the other hand, the Heat have no first-round picks available; they’re already out their 2021 pick in the Dragic acquisition a few years back and sent out a protected 2023 pick in this deal to the Clippers that may not convey until 2026. The Cavaliers, who have their own financial concerns with the luxury tax, aren’t just going to take an extra $11 million in salary without being compensated for it.
Once the Butler trade is done, the Heat will be roughly $6.41 million from the apron, with salaries for just ten players. They’ll have enough money to fill out a 14-man roster, but just barely:
Those three minimum guys can also simply be Robinson, Maten, and Nunn, if they want to keep those guys around rather than cutting them, which would save them some money and some flexibility under the apron, but it wouldn’t be enough to sign a 15th player to fill the final roster spot. Miami will have to stretch their roster as far as they can to be competitive next season; they’ll also be able to invest in Two-Way contracts for players who can help them, as those don’t count against the cap, tax, or apron at all.