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Heat Trade Begins Correction Of Riley Mistakes

Alex Donno
February 07, 2019 - 11:28 am
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The Miami Heat have shipped guards Tyler Johnson and Wayne Ellington to the Phoenix Suns for forward Ryan Anderson. 

The trade will create significant luxury tax savings for Miami, writes Ira Winderman in the South Florida Sun Sentinel. 

The trade, formally announced by the Heat on Wednesday night, reduces the Heat's luxury tax for this season from $9.7 million to $1.7 million, with a further reduction still possible. The Heat also gained a $6 million trade exception that can be utilized in a trade for a calendar year.

Luxury tax relief for a mediocre team like Miami is great. Why pay such a hefty bill for a team with no chance of competing for championships? This deal takes the Heat a step closer to making a graceful exit from NBA purgatory. Purgatory = no wiggle room to spend and improve your roster because all of your available funds are tied to bad contracts for average players. 

Even more important to me than tax savings is what this trade represents. Pat Riley has begun correcting his mistakes from the post-Big 3 era. Like the inflated contracts Riley gave to Dion Waiters and James Johnson after 2016-2017, the deal Riley matched for Tyler Johnson in the summer of 2016 was highly problematic. It's not that Johnson isn't a good player or a valuable player. He is. However, the structure of his contract makes it financially crippling for the final two seasons. 

When Johnson was a restricted free agent in 2016, he signed an offer sheet with the Brooklyn Nets for what's known as a "poison pill" contract. The contract is for $50 million total, but backloaded to pay out 80-percent of the money in the final two years. Worth under $6 mil for the first two seasons, the contract jumps to over $19 mil over the last two. The Heat had to match that offer to keep Tyler, and they did. The move smelled of desperation after Dwyane Wade surprisingly left the club for the Chicago Bulls. 

The Heat also over-bid and over-paid (perhaps bidding against only themselves) the following summer when they locked down Dion Waiters to a 4-year, $52,000,000 deal and James Johnson to 3 years, $43,295,100. Those deals came after Riley struck out in landing "whale" Gordon Hayward in free agency. Riley overestimated the players that helped Miami win 30 of their final 41 games that year. 

The moves Riley has made in recent seasons have helped secure the Heat's position as a scrappy, competitive team. Scrappy and competitive will get you to a .500 record and an early playoff exit. 

To truly compete again, the Heat need to distance themselves from the Johson, Johnson and Waiters deals to free up that money for something better. James Johnson and the arguably over-paid Hassan Whiteside (4-years, $98 million) both come off the books in the summer of 2020. Waiters will be around for an additional season. 

When freedom from the cap and tax is achieved, the Heat can begin building for a better tomorrow. Unloading Johnson is the first step, will we have to wait until 2020 for step two, or does Pat Riley have anothet trick up his sleeve?