Early Qualifying Rights (’16 Whiteside)

(Written in 2014)

It’s fair to say Hassan Whiteside has taken the league by storm in perhaps the most dynamic rise from the ashes in recent memory. Whiteside was out of the league for two years, and returned this year to post incredible metrics. The long-armed dunking, shot-blocking and rebound-snaring menace is sporting a PER of 27, a 95 DRating, and an opponent FG% at rim of 41.3% (3rdbest in the NBA for players averaging a block or more a game with at least 15 mpg and 20 games played, per NBA.com), the latter figure behind only Rudy Gobert and Serge Ibaka. His Per 36 numbers are 18 points, 15.2 rebounds, and 4.7 blocks on 64.3% shooting, per basketball-reference.com. He’s also rebounding a ridiculous 65.7% of his rebound chances. Despite the small sample size of 20 games, these are pseudo-max salary worthy postings for a league where elite rim protection for a big man is perhaps of highest demand.

Naturally, there has been talk about Whiteside’s contract duration, and criticism in regards to his free agent status. The following will address what seems to be the minority consensus in that it is significantly more favorable for the Heat’s chances of retaining Whiteside that he becomes a free agent in 2016, even if it comes with an unrestricted tab.

Background: 2014 Offseason Signing Significance

The Heat this past offseason agreed to a de-facto non-taxpayer midlevel exception deal with Josh McRoberts and a de-facto bi-annual exception deal with Danny Granger as they waited for LeBron to make his decision. When LeBron signed with Cleveland, it cleared his maximum salary cap hold off the books, affording the Heat with enough cap room to sign Luol Deng.   Had the Heat remained over the cap, they would not have had the means to obtain Deng other than via a sign and trade. In dropping below the cap, the Heat renounced their available non-taxpayer midlevel exception and bi-annual exception cap holds (even though McRoberts and Granger signed for those figures respectively). Since they utilized cap space at one point to sign players, they were afforded the cap room midlevel exception, or room exception, which does not count as a cap hold. This was imperative as it was utilized to sign Heat loyalist Udonis Haslem, reducing his cap hit from $8,246,000 (190% of his previous salary) to his reduced salary. Mario Chalmers agreeing to a new contract almost half his cap hit almost aided freeing up cap room.

In sum, the takeaway here is that once Miami used the cap room midlevel exception (and to its full amount), Miami was prohibited from using any other form of exception, thus their only means of acquiring a player was for the veteran minimum, which ultimately transpired in signing Whiteside.

Whiteside’s Contract: Minimum Salary Two-Year Ramifications

Whiteside was signed to a 2 year minimum salary contract by Miami in November, the first year which was prorated starting in November and became fully guaranteed on the January 10th contract guarantee date. The second year of his contract in 2015/2016 is for the minimum salary for a three-year veteran, or $981,348, an amount that is initially fully non-guaranteed. The contract duration of 2 years is the main takeaway here, as is Whiteside’s experience level to a lesser extent, for the following reasons.

Being relegated to only the prorated minimum exception, instead of conceivably the non-taxpayer midlevel exception, limited the duration of the contract to 1 or 2 years instead of up to 4. Hypothetically, it is unknown if Miami would have committed to 3 or 4 years at de-facto minimum salary money utilizing the non-taxpayer midlevel, or if Whiteside would agree to be locked in for that duration, with likely predominately non-guaranteed money. But that point is moot because the non-taxpayer midlevel exception, and the enhanced 3 or 4 year deal, was not at Miami’s disposal.

What was however at Miami’s disposal was a decision on a one or two-year minimum contract, which turned out to be a significant decision given the impact of Whiteside’s experience tier on his free agent status.

After being selected in the second round of the 2010 draft by the Kings, Whiteside accrued two years of experience in 2010/2011 and 2011/2012, before falling out of the league. This season will mark his third year of experience come June 30th. This is significant because had Whiteside become a free agent this coming offseason, he would be a restricted free agent, for any veteran with 3 years or less experience in the league is automatically restricted (if a Qualifying Offer is extended).   However, if he becomes a free agent in 2016, he’ll have tabulated 4 years of experience, rendering him an unrestricted free agent.

So was Miami’s offering Whiteside a one-year minimum contract a mistake? As the following will explain, it actually works out favorably for the Heat.

Fallout

Whiteside would have been a non-qualifying veteran free agent in 2015 (or non-bird FA), meaning Miami would either have to clear the requisite cap room they’d need to retain him or would be confined to the greater of 120% of Whiteside’s 2014/15 salary, 120% of the Veteran Minimum Salary or the amount required to tender a Qualifying Offer. Thus, the max offer Miami could have offered Whiteside is $1,181,348, his QO amount (3 year veteran minimum + $200,000), pending potential earning of starters criteria, which would adjust the figure up slightly.

As a brief aside, the CBA allows a prior team to match offers for restricted free agents of one or two years experience using the non-taxpayer midlevel exception in correlation with the Gilbert Arenas Provision, but that only applies to experience levels of one or two years, and since Whiteside would have accrued three years experience he would not have met this qualifier.

Miami’s team salary situation in relation to the cap is the main reason Whiteside being a free agent in 2016 is preferable to 2015. The Heat have $76,999,668 tied up in salary commitments next year pending non-guaranteed contracts and if both Wade and Deng opt in. With the latter two expected to do so, the only way Miami could have carved out cap space to sign Whiteside is by trading Deng, Chalmers and Anderson for zero returning salary to carve out space, an unlikely chore. Thus, they would have been confined to only being able to match Whiteside offers for a little over $1 million, perhaps 1/15 of the offers he could receive as a free agent. So while ideally the Heat would have had the cap room to sign Whiteside this coming offseason had Whiteside been offered a one year deal, affording them the right of first refusal in a year prior to the cap increase, that option was not viable.

Before briefly touching on Whiteside’s 2016 unrestricted free agent predicament, two other issues have surfaced: can Miami waive Whiteside and then re-sign him, or can Miami extend Whiteside? Both will now be explored.

Waiver Procedure

Any team can claim a waived player if the team has the requisite cap room, has a disabled player exception or trade exception that fits the players salary, or the player is signed to a minimum salary contract.   In Whiteside’s case, he was signed to a minimum salary contract, thus every team in the league would be eligible to submit a waiver claim, and every team undoubtedly would. Thus, Whiteside would go to the team with the worst record, meaning welcome to Minnesota Hassan (Who could use a rim protecting center conveniently)!

What about an extension?

Extension

A contract of less than 4 years cannot be extended, thus because Whiteside signed a 2 year minimum contract, he is not eligible for extension, and could not sign one until the date 3 years after signing the original contract anyway.

2016 Offseason Implications

Miami will certainly keep Whiteside’s minimum contract on the books in the 2015/16 season, rendering Whiteside an unrestricted free agent in 2016. Miami will have Whiteside’s early qualifying veteran free agent rights, or “early bird” rights, meaning Miami can only offer 104.5% of the average player salary for the 2015/16 season, a figure expected to be in the $5.8 million range, if Miami is over the cap. Favorable for Miami of course is the fact the cap is expected to jump significantly pending potential cap smoothing to a currently estimated $91,200,000, and being as though Miami only has $29,523,510 in committed guaranteed salary in the 2016 offseason, they will have the room (as will virtually everyone) to sign Whiteside outright. Whiteside will be eligible for a maximum salary of slightly less than 25% of the 2016 salary cap for a player in the 0-6 year experience tier, and being as Whiteside will not meet full veteran qualifying free agent qualifications, the max contract length either Miami or any other team can offer is 4 years, albeit Miami can offer an increased 7.5% annual raise over 4.5% of everyone else.

Thus, while Whiteside will be an unrestricted free agent in 2016, the scenario actually works out well for the Heat, for if Whiteside was a restricted free agent this coming offseason, the Heat likely would not have had the means to match his expected offer, and his success story in Miami would end.

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