SBD/June 24, 2013/Franchises

Heat Face Challenge Of NBA's Luxury Tax Limitation With Big Three On Roster

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James, Wade and Bosh are all under contract through next season
The Heat’s front office this offseason “will be busy trying to figure out how to get its payroll to a manageable level because of an onerous luxury tax put in place during the last collective bargaining agreement,” that was “aimed at leveling the playing field,” according to Joseph Goodman of the MIAMI HERALD. How the Heat “navigates its offseason financially could be the difference” in keeping F LeBron James, G Dwyane Wade and F Chris Bosh “together past next season.” James, Wade and Bosh are “under contract for next season,” but if Heat Owner Micky Arison and President Pat Riley “keep everyone on the roster for another go, and sign a free agent to replace Juwan Howard, next year’s tax bill alone" would be around $38M. The Heat also “doesn’t have the luxury of draft picks this summer to help reduce costs.” Arison could “argue all he wants about how the Heat is actually one of the league’s small-market teams, but the ledger shows that his team is painfully over the league’s luxury-tax threshold, which is expected to be at" $71.6M next season. The new salary cap is “projected" at $58.5M for the '13-14 season. The Heat currently have $85.6M for 12 players” (MIAMI HERALD, 6/23). In West Palm Beach, Ethan Skolnick wrote, “No matter what adjustments the Heat make, they are likely to remain well above the luxury tax threshold, and will pay a penalty of $1.50 for every dollar above.” The penalty for next season “will rise to $2.50 for every dollar above.” For all the “media speculation, Heat officials -- on and off the record -- have given no indication that they intend to break up the so-called Big 3” (PALM BEACH POST, 6/23).
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