If the Miami Heat are going to bag another superstar, it is almost certainly going to happen via the draft or a trade rather than free agency. And they finally appear to know it.
Miami’s stance on Norman Powell’s future proves as much.
According to Barry Jackson of the Miami Herald, the Heat are “open to considering an extension with Powell if the start of the season goes well.” That’s some Grade A, over-hedging word salad. But the mere willingness to think about paying Powell before the 2026 offseason is a big deal.
Extending Norman Powell obliterates the Heat’s cap space
For the first six months of his time in Miami, Powell can sign an extension worth up to three years and $77.4 million. After that, at any point up until he’s a free agent, he’s eligible to get up to four years and $128.5 million.
The exact terms are fungible, depending on timing, and how much the Heat value Powell. The end result to any extension is the same: Miami forfeits cap space.
Assuming Andrew Wiggins declines his player option next summer, the Heat can dredge up over $30 million in room. Failing that, they are in line for more than $90 million of space during the 2027 offseason, when Tyler Herro’s deal is currently scheduled to come off the books. That’s why his own extension eligibility this October continues to receive so much attention.
Paying Powell beyond this season nukes flexibility in each of the next two summers. Miami would still have some pathways to cap space in 2027, but not nearly as much with Powell, presumably, making north of $25 million. Its spending power would also be heavily predicated on not retaining Herro.
The harsh truth about Miami’s cap space
Extending Powell is a no-no if Miami needs cap space. Here’s the thing: It doesn’t. Cap space is officially overrated.
Stars aren’t changing squads via free agency anymore. Even teams like the Los Angeles Lakers, the mother of all free-agent destinations, are no longer placing a premium on cap space. Having tradeable salaries and assets matters more to superstar pursuits.
This is why the Heat should focus more of their efforts on piling up picks, prospects, and desirable contracts in the months to come. They will do more for an inevitable pursuit of Giannis Antetokounmpo or another star than financial flexibility.
It’s also why extending Powell can’t be viewed as a deal-breaker. Heck, it could technically help Miami’s future star pursuits. Inking him to a team-friendly pact either makes him more tradeable, or allows the front office to feel the slightest bit better about Herro becoming collateral damage of any blockbuster acquisition.
Interpret the latest rumors however you like. The outcome doesn’t change the overarching realization: Cap space is no longer the primary vehicle through which superstars are landed—and the Heat know it.