How Miami Heat are impacted by new CBA, luxury tax limits (Part 1)

Second Tax Apron

It’s common knowledge (or least should be) that the Heat are extremely tank averse. Unless tragedy strikes, you can expect the team to finish with at least 37 wins year in and year out. The last time this team failed to win 37 games was way back in the dark age of 2007-08. That year ended up being nothing more than a blip on the radar. As this graph from the business focused website notradeclause.com demonstrates, there is a positive correlation between team salary and overall performance.

Net rating is often higher among the teams that at least flirt with the luxury tax. The moral of this numbers-heavy story is that to return to the promised land, Miami will more than likely have to dip into the tax. The team will finish this season just under the tax line ($1,173,139, to be exact), but that is set to change as soon as next season, when the Heat are projected to be $11 million into the tax before making moves in the offseason.

Depending on how aggressive the team wants to get in its pursuit of reinforcements this summer, this additional tax line added in by the 2023 CBA could be an obstacle. As previously mentioned, the tax apron sits $6 million above the luxury tax line, put in place to curb spending by heavily penalizing teams that rise above it. What will change next season is the implementation of a second tax line $17.5 million above the tax that removes the ability to make three significant types of transactions:

1. Take back money in trades
2.  Sign players off the buyout market
3. Trade draft picks seven years in the future

Yikes. Let’s start with the first restriction. Contending teams quite often take back more money than they send in trades, since they are targeting players better than the ones they are trading away. By using simple logic, we can deduce that better players command more money. Straight money for money trades can be difficult without gutting the roster since high-profile players make so much money each year. Just a fact to keep an eye on since the team is rumored to be going big-fish hunting just about every year.

Moving on to the buyout limitation: Remember that Kevin Love guy the Heat signed back in February? He was a buyout casualty of the Cleveland Cavaliers. His numbers didn’t jump off the page during his 20 games with Miami (7.7 PPG, 5.7 REB, 2.0 AST), but on paper, his addition solved a few roster holes, including defensive rebounding and 3-point shooting. If the Heat remain at risk of surpassing the second tax apron, the loss of the ability to make a transaction like that becomes a real possibility.

So what about draft picks?

If the Heat want to take a swing at a big fish this summer — and you know they’ll at least make some calls — then their 2028 and 2029 first-round picks stand to be the most valuable. Until the team makes its 2023 selection this June, 2029 is the seventh year out from this moment. But if the Heat go above that second tax apron, then they cannot use that draft pick, severely limiting what is already a depleted amount of draft picks they can use in trades.

Of course, none of these restrictions come into play if the Heat manage to stay $17.5 million or less above the tax line. Keep in mind that team salary number is subject to change with just nine players under contract for next season.