Heat still quiet in free agency. What Mitchell’s extension means and the DeRozan possibility

Through the first two-plus days of free agency, as of Tuesday afternoon, the Miami Heat has yet to make an outside addition to its 15-man roster. Instead, the Heat has watched a potential trade target and return option come off the board.

That list includes five-time All-Star guard Donovan Mitchell, who committed Tuesday to sign a three-year, $150.3 million maximum contract extension with the Cleveland Cavaliers. The Heat has been linked to Mitchell for years, but this extension keeps him under contract with the Cavaliers through the 2026-27 season before facing a player option for the 2027-2028 season.

That list also includes veteran guard Delon Wright, who left the Heat to sign elsewhere in free agency. Wright agreed on Monday to sign a one-year minimum contract worth $3 million to join the Milwaukee Bucks.

Day 3 Free agency tracker: Heat shows interest in DeRozan. Donovan Mitchell commits to Cavs

But despite a salary-cap crunch that leaves little to offer outside free agents and limits how much it can offer to re-sign its own free agents, the Heat continues to explore different possibilities on the free-agent market.

For one, the Heat has expressed interest in unrestricted free agent wing DeMar DeRozan, according to two sources with knowledge of the situation. The interest is mutual, with DeRozan also having interest in joining the Heat.

The Heat and Lakers are among the teams in play for the six-time All-Star. But the Heat faces significant salary-cap challenges in potentially adding DeRozan to its roster.

As a team with a payroll up against the dreaded second apron, the most that the Heat can currently offer DeRozan in free agency is the $5.2 million taxpayer midlevel exception. The only other avenue Miami currently has to add DeRozan is a minimum contract with a salary of $3.3 million for next season.

Considering DeRozan played on a salary of $28.6 million last season with the Chicago Bulls, it would be surprising if he accepted such a pay cut to join the Heat.

To create the flexibility needed to offer more money to DeRozan this summer, the Heat needs to shed significant salary to have enough room under the first apron to potentially offer him the $12.8 million non-taxpayer midlevel exception or become eligible to land him in a sign-and-trade with the Bulls.

The issue is using the $12.8 million non-taxpayer midlevel exception or acquiring a player through a sign-and-trade would hard cap the Heat at the first apron of $178.1 million for the entire 2024-25 NBA calendar.

Also, NBA rules say the Heat would need to sign DeRozan to a contract at least three years in length if he’s acquired in a sign-and-trade. DeRozan turns 35 in August.

DeRozan, who was named an NBA All-Star as recently as in the 2022-23 season, is one of the most accomplished players remaining in free agency. Known as one of the most proficient mid-range shooters in the league, DeRozan averaged 24 points, 4.3 rebounds, 5.3 assists and 1.1 steals per game while shooting 48 percent from the field and 33.3 percent on 2.8 three-point attempts per game last regular season with the Bulls.

The only move that the Heat has made in free agency, as of Tuesday afternoon, is retaining veteran center Kevin Love on a two-year contract worth $8 million. Love agreed to a new deal to return to the Heat just minutes after the league-wide negotiating period began Sunday evening.

With Love returning and Wright departing, that leaves seven players from the Heat’s season-ending roster who remain free agents: Thomas Bryant (unrestricted free agent), Jamal Cain (unrestricted free agent), Haywood Highsmith (unrestricted free agent), Caleb Martin (unrestricted free agent), Patty Mills (unrestricted free agent), Cole Swider (restricted free agent) and Alondes Williams (restricted free agent).

While Martin is exploring other options after bypassing the $7.1 million player option in his contract with the Heat for next season to become an unrestricted free agent, a return to the Heat shouldn’t be ruled out yet. The Heat made a push to retain Martin ahead of the start of free agency and continue to have interest in bringing him back, according to league sources, but Miami is limited in what it can offer him.

The Heat remains in contention to re-sign Highsmith, but his return is far from guaranteed at this point.

WHERE HEAT’S ROSTER STANDS

The Heat announced late Monday night the signing of first-round selection Kel’el Ware, who was taken with the No. 15 overall pick in last week’s NBA Draft. Ware now can’t be traded for 30 days after signing his rookie-scale contract, which is worth $20.5 million over the next four seasons and includes a starting salary of $4.2 million for this upcoming season.

The Heat announced Tuesday morning the signing of second-round pick Pelle Larsson, who was selected with the No. 44 overall pick in last week’s draft. The Heat used the league’s new second-round pick exception to sign Larsson to a three-year, $5.4 million contract, which includes a team option in the third season and a fully guaranteed starting salary at the rookie minimum of $1.2 million for this upcoming season.

The Heat also spent the last few days filling its three two-way contract slots, announcing Monday night that it is bringing back guard Dru Smith on a two-way deal to fill the final two-way contract spot on its roster. The 26-year-old Smith is a familiar face, spending some part of the last three seasons with the Heat after going undrafted out of Missouri in 2021.

The Heat had already locked in Florida guard Zyon Pullin and Arizona forward Keshad Johnson to two-way contract agreements shortly after they both went undrafted last week. Both Pullin and Johnson signed their two-way deals on Monday.

Two-way contracts do not count toward the salary cap, luxury tax or apron and allow for players to be on their NBA team’s active list for as many as 50 regular-season games, with other playing time needing to come in the G League. NBA teams can have as many as three players on two-way contracts at any one time and two-way deals can be swapped out whenever.

With Love returning and Wright departing in free agency, the Heat’s roster now includes 11 players on standard contracts for next season: Jimmy Butler ($48.8 million), Bam Adebayo ($34.8 million), Tyler Herro ($29 million), Terry Rozier ($24.9 million), Duncan Robinson ($19.4 million), Ware ($4.2 million), Love ($3.8 million), Jaime Jaquez Jr. ($3.7 million), Josh Richardson ($3.1 million), Nikola Jovic ($2.5 million) and Larsson ($1.2 million).

Orlando Robinson could be the 12th player to join this list depending on what the Heat decides to do with his contract. The Heat has until July 15 to guarantee Orlando Robinson’s full $2.1 million salary for this upcoming season.

Not including cap holds or Orlando Robinson, the Heat has about $177.9 million committed to salaries for 11 players, including the $2.5 million in “unlikely to be earned incentives” that raise Herro’s cap number for this upcoming season to $31.5 million.

With the salary cap for the 2024-25 season set at $140.6 million and the luxury tax threshold set at $170.8 million, this means the Heat is already in luxury-tax territory.

With four or five roster spots still to fill for next season, the Heat is also on its way to crossing the first apron that’s set at $178.1 million and not far from the ultra-punitive second apron that’s set at $188.9 million.

This salary-cap position limits who the Heat can add and/or re-sign in free agency this summer, especially considering that Miami does not intend to pass the second apron because of the roster-building restrictions that come with it.

NBA teams are allowed to carry up to 21 players under contract in the offseason and preseason, a total that does not include those on summer league contracts. Rosters must be cut to a maximum total of 18 players (15 on standard contracts and three on two-way contracts) by the start of the regular season.

While free agent negotiations were allowed to begin Sunday evening, most free agents can’t formally sign their new contracts until Saturday at noon.