Examining Heat's Salary Cap, Decisions for 2024 NBA Free Agency After Playoff Loss

Last season, the Miami Heat made a spirited run to the NBA Finals, and after consecutive trips to the conference finals, Miami figured to be a serious title threat again this past season.

Once again, though, Miami had to begin its postseason journey in the play-in tournament. This time the squad was eliminated in the first round by the Boston Celtics.

Injuries were an issue for Miami virtually throughout the season. While Tyler Herro, Terry Rozier, Jimmy Butler, Nikola Jović and Bam Adebayo gave the Heat a strong core, it was hard for head coach Erik Spoelstra to find lineup consistency.

Given the way Spoelstra's squad pushed through the 2023 tournament, though, Miami was never a team that could be written off. That should be the case once again next season.

Now that the Heat's playoff run has ended, it'll be back to the planning stages for Spoelstra and general manager Andy Elisburg.

Below, you'll find a look at Miami's salary cap outlook, top impending contract decisions and some potential top targets for 2024 free agency.

Miami is set to have 12 players under contract entering the offseason, including Butler, Herro and Adebayo. Deion Wright and Patty Mills are the team's only unrestricted free agents, That gives the Heat a strong foundation for the 2024-25 season, but it leaves the club with little financial flexibility.

The Heat are facing a projected practical cap deficit of $66.3 million. The best Miami can do by declining options and exceptions is to get down to a $32 million practical cap deficit. The team is set to be $11 million over the luxury tax threshold and only $4.7 million below the second apron.

That second apron is an important line because of the new collective bargaining agreement (CBA). Under the new CBA—and beginning this offseason—teams above the second apron are prohibited from aggregating contracts to trade for a single player, sending out cash in trades, using trade exceptions from previous years, or taking back more salary than it sends in a trade.

As constructed, Miami isn't poised to be a major player in either free agency or the trade market.

The Heat could start talking about an extension for Butler, who is under contract next season but will have a player option in 2025. Ira Winderman of the South Florida Sun Sentinel theorized last summer that Butler will soon covet a deal bigger than the five-year, $304 million extension Jaylon Brown signed with the Boston Celtics.

Miami could also revisit extension talks with Adebayo. There was some discussion before the October deadline, even though the 26-year-old is under contract through 2026.

"It was in the air," Adebayo said, per Winderman. "We had that conversation.

However, extensions for Butler and Adebayo probably won't be initial priorities. Miami will have more pressing choices to make regarding Caleb Martin, Kevin Love, Josh Richardson and Thomas Bryant, who all have player options for 2024-25.

Martin, Richardson and Love have been particularly valuable role players who could be worth bringing back on longer deals. Of course, it'll largely be up to the players to decide whether to opt in for another run or to test the market.

Wright and Mills were late additions to the 2023-24 roster and shouldn't be priorities to re-sign. Haywood Highsmith is set to be a restricted free agent, along with two-way players Jamal Cain, Cole Swider, Drew Peterson and Alondes Williams.

Miami's approach to free agency will hinge heavily on which role players it chooses to keep.

If, for example, Love opts out and departs, New York Knicks center Isaiah Hartenstein could become a prime target. While Hartenstein wouldn't provide as much shooting behind Adebayo, he'd give the Heat a strong defensive option off the bench.

Hartenstein played on a modest $8.2 million salary this past season, though his expanded role in New York may have upped his price tag.

Minnesota Timberwolves guard Kyle Anderson could make sense as a defensive contributor. Utah Jazz guard Talen Horton-Tucker could be an intriguing reclamation project if he's willing to sign a minimum contract.

Unless Miami finds a way to get under the tax threshold, it will have to try attracting veteran talent on smaller deals. Of course, Miami's status as a perennial playoff team could theoretically convince a top free agent like DeMar DeRozan to do a team-friendly deal. The Chicago Bulls will undoubtedly want to keep DeRozan, but his name was floated in connection with Miami before the trade deadline.

"He is as close to what they're looking for as they're going to find. Perfect fit, really," an unnamed Eastern Conference executive told Heavy's Sean Deveney in December.

Realistically, though, Miami's biggest addition may come via the 2024 draft or via the trade market. The Heat don't have a lot of space below the second apron, but they haven't hit it yet.

*Cap and contract information via Spotrac.