I do not get this at all. Why?




I understand you'd do the sign and trade to get the max years and money, right? Why do the sign and trade to take LESS money though? I don't think the 6th year was worth two 1st's and two 2nd's for LeBron nor do I think it was worth two 1st's for Bosh's 6th year to take les money.

Why give up so much for that 6th year?

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Oh c'mon someone has to have some intel on this

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I don't get it. I thought James was a free agent. Why did they have to trade anything?

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I think you're looking at it the wrong way, Z. Not saying that to be rude, but I think it's more appropriate to look at the transaction as obtaining the bird-rights of LBJ and CB4, so in essence the Heat could offer both players a bit more than they would have otherwise gotten had they signed as outright free-agents. This way, the players get paid more than they would have otherwise (and who doesn't want more money, really?), but still they leave some room for the Heat to sign some other decent players to fill out that roster.

What really makes no sense to me, though, is why the Heat would trade two first rounders for each player, but then go and give James and Bosh player options to terminate their deals after 4 years. That's... downright stupid from a business standpoint.

Although you have to love the situation you find yourself in if you are LBJ and Bosh; you have the next four years to become champions, while still having one more chance to get a max contract in your prime (both will be 29 in four years).


Anyways, I think first round picks in this trade are over-valued. Even with over-the-hill players, the Heat are going to compete for the top of the Eastern conference next year. That means a draft pick in about the 25-30 range. Frankly, those picks are terrible if you're looking for anything more than a potential rotational player. And, interestingly enough, there will always be teams (see Hornets, New Orleans) that are willing to sell their picks because of cheap owners. Considering their roster is gutted, it's not inconceivable that you could buy a pick in the late teens for a few (about 3 million) dollars.

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But they took LESS ... that's what confuses me. I can understand doing the sign and trade to get more money, but they took less.

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If they had signed outright, they would be making less than what they are making right now. By doing a sign and trade, the Heat gave LBJ and CB4 less than the absolute max, but still more than signing without being traded. That's why the early termination option becomes crucial: in years five and six, LBJ and Bosh stand to lose much more money than they do now. For example, both players will make about 14.5 million this year, about 2 million less than the absolute max they could have made. Factoring in annual 10.5% pay increases, that means over the course of a six year contract they took 15 million less each to play together. But the kicker is that a good chunk of that 15 million less would've been lost in years five and six, when they in fact can opt out of their contracts and re-do max deals again.

The main point is that the 10.5% increase in pay is over the amount received in the previous year. So by having early opt-outs, Lebron and Bosh in fact stand to lose about a little more than a handful of millions. Given that each player carries with him a brand that is their name, it's not unreasonable to think 2 million can be made back through endorsement deals. In addition, the 7-8 million left on the table (assuming they each opt-out after 4 years) can be made back in long-term security by each player signing a new absolute max-deal again in four years once they are 29 (and still in their prime). So while they leave some money on the table in the short term, they actually are fully capable of making that difference up in the first 4 years of the deal, while also making it up by signing a third max-contract in their playing career (1st was max-extension each player got three years ago, 2nd was this year, and 3rd would come at age 29).

In short, it's much more about making more money over the long-term than it is about missing out on a few million in the short term. The money they left is indeed staggering for but a select few individuals, but this way LBJ and Bosh have put themselves in the position to make 20+ million while playing in their mid-30s. That's pretty smart, business wise.

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I think the Heat got swindled.

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The reason why they did the heat did the sign and trade is because now they don't have to renounce the bird rights to all their vet players that they have had for over 3 years which means they can resign those players for more than the vet minimum.

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the bird rights? what?

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To compare to football, for example, the Packers could negotiate with Tramon Williams this off-season because they held his rights; similarly "bird rights" in essence allow teams that opportunity to exclusively negotiate with their players.

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