Miami Heat: Should the Heat stretch and waive Ryan Anderson’s contract?

The Miami Heat enter the summer with a bloated salary cap sheet after being the most expensive team to ever miss the playoffs. However, they may have more flexibility than meets the eye.

The Miami Heat have the ignominious distinction of being the most expensive team to ever miss the NBA playoffs. With a roster that may be locked in for at least another year, not much in the way of youth in development, and a number of teams below them in the Eastern Conference standings who could be poised to make a leap in the hierarchy (chief among them the New York Knicks), the outlook may be bleak for them to avoid that fate again in 2019-20.

The status quo may be grim, but there are scenarios where the Heat could find themselves with a sudden influx of salary cap flexibility. These hinge entirely upon whether both Goran Dragic and Hassan Whiteside choose to return to South Beach or decline their player options for the coming season.

If Dragic and Whiteside both opt out, their combined $46.3 million would come off the books for the coming season, a number which gets them well under the $109 million salary cap and reduces their cap number to $82.7 million in guaranteed salaries. That’s a substantial number, giving the Miami Heat $26.27 million in space, but it’s not enough to woo a superstar who can get a max contract.

In 2019, a player entering his sixth season (or earlier) will have a max first year salary of $27.25 million, while a player with between six and nine years experience will have a max first year salary of $32.7 million.

Either way, it’s likely not going to be enough to get the attention of a player like Jimmy Butler or Tobias Harris, or (dare we hope) a Kevin Durant or Klay Thompson, but it’s close.

The best way for the Heat to clear the decks to their fullest potential, assuming Dragic and Whiteside both opt out (remember, the best outcome is for them to both opt in or both opt out, because one player alone opting out doesn’t even get them any notable cap space) would be to stretch and waive Ryan Anderson‘s $21.26 million contract.

Anderson and the Miami Heat agreed to reduce his guaranteed salary to just $15.6 million, meaning that if the Heat do waive and stretch him, his cap number would drop from $21.26 million to just $5.2 million. According to the stretch provision, any player stretched has their remaining guaranteed salary divided by the number of years remaining doubled plus one, so this divides the $15.6 million guaranteed amount in thirds.

This would be paid out to Anderson, but the hit on the cap would then be $5.2 million in each of the next three seasons, and the extra $16 million in cap savings would mean the Heat would have $42.3 million to spend in free agency this summer, more than enough even for Kevin Durant’s 10-year-plus first year max salary of $38.5 million.

Again, the only reason to stretch out the remainder of Anderson’s contract would be to maximize existing cap space gained from the opt outs of Dragic and Whiteside, so if the do in fact opt out this summer, expect Ryan Anderson to be subsequently waived and stretched in the immediate aftermath.