4 Big Questions: What Jimmy Butler returning means for Heat, Butler's future

The Athletic’s Shams Charania reported that Jimmy Butler will play out next season on his existing contract and will not seek an extension with the Miami Heat or any other team this summer.

Six-time NBA All-Star Jimmy Butler decided he would play out next season on his existing contract with the Miami Heat and will not sign an extension with them or any other team ahead of his opt-out clause in 2025, league sources briefed on the matter told The Athletic.

His decision to play out next season commits him to Miami and clears up any notion of a trade demand due to the lack of an extension. Butler has an affinity for Miami and has wanted to stay with the Heat, league sources said.

This is an interesting development and good news for the Heat. Let’s break down why from all the important angles.

Why the change of heart?

Money.

Butler, 34, has two seasons remaining on his current contract and had been seeking a maximum extension that would have added another season to his deal before this about-face. 

Here’s Butler’s current contract:

2024-25: $48.8 million
2025-26: $52.4 million (player option)

And here’s what a two-year, $113 million maximum extension would have looked like:

2024-25: $48.8 million
2025-26: $54.3 million
2026-27: $58.6 million

Any extension would be subject to the NBA's over-38 rule, which limits the Heat’s ability to offer Butler an extension to two years, $113 million. By waiting until next summer, Butler will be eligible for more years on a new deal by opting out of his contract and entering free agency (where the over-38 rule doesn’t apply.)

As a free agent next summer, Butler will be eligible for a four-year maximum contract worth a projected $243 million with Miami or a maximum three-year, $171 million deal elsewhere.

What can we expect from Butler next season?

Butler has 243 million reasons to be extra motivated next season. After playing just 60 games and averaging an uninspired 20.8 points, 5.3 rebounds and 5 assists last season, Butler is essentially entering a contract year.

“Contract Year Jimmy” could be the best thing to happen to the Heat next season, especially if they aren’t able to land another star player this summer. Butler has mostly coasted the last two regular seasons, ending in appearances in consecutive play-in tournaments. The Heat managed to catch lightning in a bottle two years ago and made an improbably run to the 2023 Finals. Last year, Butler sprained his MCL in Miami’s play-in game against the Philadelphia 76ers and missed the team’s first-round series loss to the Boston Celtics.

The Heat need Butler healthy and engaged, not just for the playoffs, but for the regular season so that they can avoid the play-in tournament and pave the way for another deep playoff run. Pat Riley said as much during his end-of-season press conference.

“Who moves the needle the most on our team is Jimmy,” Riley said in June. “Jimmy moves the needle the most. He’s an incredible player. What I said at the beginning about change is he’s got to give it some thought himself for this team to be what he wants it to be.

“We got a really good group of guys, and our No. 1 issue is player availability and having your guys playing every night,” Riley added.

Butler ranked 46th in scoring last season. The Heat didn’t have anyone rank in the top 40 in points per game. They need someone to score the ball. The Heat were 9-2 in games Butler scored 28 or more points last season. When he plays like a top 15 player, the Heat are a much better team. If Butler is motivated to get paid like a top 15 player, he’ll have to play like a top 15 player.

“That’s a big decision on our part to commit those kinds of resources unless you have somebody who’s going to be there and available every single night,” Riley said. “That’s the truth. We have to look at making that kind of commitment and when do we do it. We don’t have to do it until 2025.”

Butler, by kicking the can down the road, is taking on Riley’s challenge and betting on himself.

Could the Heat still trade him?

League sources told Charania that the Heat have shown no interest in trading Butler. ESPN’s Briain Windhorst also reported on Wednesday that Butler has shut down overtures from other teams, telling them that he’s happy in Miami.

The Heat could still trade Butler this summer if they were offered a deal that could set them up with the means to acquire another star in the future, but Butler’s unwillingness to sign an extension this summer could limit his value.

Would a team like the 76ers be willing to take that gamble (again)? That much is unclear. For now, we’re looking at the Heat and Butler returning for at least one more run.

How does this impact the Heat’s finances?

When Butler opts out next year, the Heat could escape the luxury tax and create nearly $30 million in cap space if they don’t take on more long-term salary this season.

That would create major financial flexibility for a team potentially looking to build around Bam Adebayo, who plans to sign an extension that will keep him under contract through 2029.

If Butler and the Heat decide to part ways next summer, they could do so relatively painlessly. If they want to keep the partnership going, the Heat would have Butler’s full Bird rights to re-sign him to a deal worth up to four years and $243 million.