New York Knicks

Estimated
Tax Line
Currently Sorta
Guaranteed
’13-14 Payroll
Projected
Amount Over
Tax Line
Projected
Tax Owed For
’13-14 Season
Key Free Agents
$70,500,000$70,381,905$0$0JR Smith
Chris Copeland
Kenyon Martin

The above payroll for next season only accounts for seven players—Melo, Amar’e, Chandler, Felton, Camby, Novak and Shumpert. Noticeably absent is JR Smith. The most the Knicks can offer JR next season is about $5.5 million. If the Knicks bring him back at that number, the payroll will be pushed to just under $76 million. Add on $3 million more for the bottom quarter of the roster, and next year’s NYK payroll grows to about $79 million.

That number is roughly $8.5 million above my assumed tax line, so Knicks owner James Dolan would have to pay the League about $13.4 million in taxes next year. Not too terrible, but it gets worse. The following season, increases in players’ contracts bump the payroll of that same team to about $85 million. Since they will have been taxpayers for three straight years, the penalty will be very steep. With about an $85 million team ($14.5 million over the tax line), the Repeater Tax will give them a tax bill worth $42.75 million. That means Dolan will be paying a total of more than $127 million for a ’14-15 roster featuring a 41-year-old Marcus Camby and 32-year-olds Amar’e Stoudemire and Tyson Chandler.

At the rate Stoudemire is declining, he should be essentially useless two years from now. Chandler is beginning to wear down as well. The Knicks can only hope Camby retires before his contract expires a la Jason Kidd. Meanwhile, there are two other problems:

1. If a team with real cap space offers JR more than $5.5 million in the first year of a contract, the Knicks won’t be able to match and I bet he’d walk. 2. Even if Dolan splurges and keeps the band together, the team couldn’t reach the Conference Finals this season, and Derrick Rose will be back next year.

New York doesn’t have a way to improve going forward. Shumpert’s development will be key, but the team doesn’t have a first-round pick next summer and will be completely strapped when it comes to landing impact free agents. Fans can forget about the pipe dream centering around flipping STAT for a piece—his contract is the worst in basketball.

The team will have no money this offseason or next, but the silver lining is the summer of 2015. Two years from now, the contracts of Stoudemire, Chandler and Melo, if he accepts his player option next offseason, expire, and the Knicks will have some breathing room. Unfortunately, Melo (if he re-ups next year), Smith (if he re-ups this year), Shumpert, Felton and Novak could be making upwards of $47.5 million in ’15-16. Assuming the salary cap is bumped up to $60 million by then, they’d be left with about $12.5 million in cap space and a couple of free-agent exceptions to fill out the roster. They could just let Melo leave, giving them lots more cap flexibility, but needless to say, that would be idiotic.

If JR leaves this summer, they’ll have roughly $19 million available in 2015, but the ’13-14 and ’14-15 teams will suffer. Without JR on the books, the best free agents to burn $19 million on in 2015 would be 30-year-olds LaMarcus Aldridge and Marc Gasol—eh.

The Knicks will likely never be bad in the Melo era—he’s too good for that—but it’s hard to see them getting any better than they were this season, when they weren’t good enough.

P.S. Kidd retiring is a huge break for Dolan. He was scheduled to be paid $3.09 million in each of the ’13-14 and ’14-15 seasons. It’s too early to get the exact figures, but his retirement will save the Knicks at least $7.725 million next season and $10.815 million the year after that. It’s likely about $20 million in savings.

Miami Heat

Estimated
Tax Line
Currently Sorta
Guaranteed
’13-14 Payroll
Projected
Amount Over
Tax Line
Projected
Tax Owed For
’13-14 Season
Key Free Agents
$70,500,000$85,600,797$15,100,797$29,077,590Chris Andersen

The defending champs will likely have a nearly identical roster in ’13-14 as they did this season. Mike Miller should be waived via the Amnesty Clause, which will slice about $15 million off of the luxury tax bill next year, and the team will be able to spend about $3 million for a free agent via the Mid-level Exception. Other than that, expect much of the same, unless you buy the Chris Bosh trade rumors (I don’t).

The summer of 2014, though, might destroy these Miami Heat. Each of LeBron James, Dwyane Wade and Bosh has a player option for the ’14-15 season, and presumably they’ll all opt out so they can ink another max deal before they slip out of their primes (the latter guys will find this especially important).

Miami actually has no guaranteed money locked into the ’14-15 team, but it’s safe to assume that Udonis Haslem ($4.62 million) and Joel Anthony ($3.8 million) will pick up their player options, while Mike Miller ($6.6 million) will have been waived by then. Norris Cole has a $2.15 million team option for that season.

If any of the Big Three leave Miami in a year, nearly all of this will be moot. But let’s work under the assumption that LeBron, Wade and Bosh re-up with Miami next summer after opting out. If each takes slightly less than a max contract again (not a sure thing), they’ll probably each earn around $21 million in the first year of the new deals—slightly more than their respective player options would be worth. Those three contracts would total $63 million—already more than the salary cap. Tack on the contracts of Haslem (who will be vastly overpaid by then), Anthony (quietly a horrific contract) and Cole, and the Heat will eclipse $73.5 million with only six guys on the roster.

Ideally, they’d retain Chalmers at his current salary ($4 million). From there, they’d have no Mini Mid-level Exception because they’d be over the tax apron ($4 million over the tax line), and their full Mid-level Exception would be worth less than non-taxpayers’ (again, about $3 million, as opposed to $5 million for non-taxpayers). If they can bring in one good veteran for the MLE, the remaining four guys on the ’14-15 roster would have to be rookies or veterans playing for the minimum. Maybe they can strike gold there with a Nate Robinson or Birdman, but more likely those will be Juwan Howard-types.

If we assign $1 million salaries to each of the final four players on the roster, the payroll will be just south of $84.85 million. (And remember that the estimates for LeBron, Wade, Bosh and Chalmers are probably low. The same team could easily cost $90+ million.)

The $84.85 million payroll (technically $84,848,188) would likely be about $14 million above the tax line. The repeater tax, which will be instituted that season, charges a team $14,348,188 over the tax line a hefty ~$41.47 million. It’s also key to remember that while Miller wouldn’t count against the cap if he’s amnestied, Miami’s owner, Micky Arison, still has to pay his checks. Add on Miller’s $6.6 million, and the Heat will be paying over $48 million in Miller + luxury tax money, in addition to the roughly $86 million owed to the players on the team. Total bill for the estimated ’14-15 Heat: $132,916,850.

It’s possible that Arison forks over the dough. But here’s the problem: I don’t know that a roster featuring LeBron, 32-year-old Wade, 30-year-old Bosh, Cole, Chalmers, a ring-chasing veteran, Anthony, the corpse of Haslem and four minimum guys makes up a championship team. The same core got the job done this season, but that was with incredibly clutch performances by Ray Allen and Shane Battier, who they won’t have. Not to mention that Miami needed to win Game 7s in each of the final two rounds to pull it off.

They wouldn’t really have any room for long-term growth—no cap space or high draft picks. They’d get another Mid-level Exception each summer, but those guys will just add on to an already heavy tax bill for an aging team. It’s also worth mentioning that Rose and Kevin Durant will both be entering their age-26 seasons in ’14-15.

There are real questions here. If you’re the Heat, would you sign DWade for five more years at near-max money after his Playoff showing? How about Bosh, who played a horrible Conference Finals (30 rebounds total in seven games, fewer than 10 points four times) and six mediocre Finals games before not scoring a single point in the title game? They could lowball those guys next summer, but they would risk losing them to another team willing to pay more. And if Wade and Bosh aren’t there, would LeBron still want to stay in Miami? Would he even stay if they are there?

Any team with LeBron is going to do just fine, but this Heat team isn’t setup to maximize on having by far the world’s best player long-term. Anybody else excited for next summer?

This is Part 3 of a three-part Summer Preview running on SLAMonline this week. Read Part 1—Making The Leap—here. Read Part 2—Keep It Together—here.