Caleb Martin staying with Heat on three-year deal; change made to Victor Oladipo’s contract

Entering free agency, the Miami Heat and forward Caleb Martin hoped they could get a new deal done. That hope is now a reality.

The Heat is using the full $6.5 million taxpayer midlevel exception to bring back Martin, who was a restricted free agent, on a fully guaranteed three-year deal worth about $20.5 million, according to league sources. This is the biggest contract Miami could have offered Martin using this exception, which does not hard cap the Heat.

“I want to be here,” Martin said on exit interview day in late May of his desire to return to the Heat. “I got better here and I believe I will get better here. I just think with how close I’ve gotten with the guys and the people here, and how much better and more confident I’ve been here. I feel like my team and my staff believes in me and believes that I’m going to get better here.”

The Heat didn’t opt to use the $10.5 non-taxpayer midlevel exception or $4.1 biannual exception because doing so would have triggered a $157 million hard cap, which Miami was looking to avoid because it would have limited the team’s flexibility in the trade market during the NBA’s 2022-23 calendar.

The Heat could still technically use the remaining $4 million of the midlevel exception and the $4.1 million biannual exception this season, but utilizing either one would hard cap Miami.

Martin, who was a restricted free agent, helps address a glaring need for the Heat after starting power forward P.J. Tucker left Miami to join the Philadelphia 76ers in free agency. Martin (6-5, 205) is expected to help fill Tucker’s void and could even open the season as the Heat’s starting power forward depending on who else the team adds this offseason.

After earning a total of about $2.9 million in salary during his first three NBA seasons, this new deal represents the biggest contract of Martin’s career.

This milestone comes less than a year after Martin, who went undrafted in 2019 out of Nevada, was waived by the Charlotte Hornets last August. He signed a two-way contract with the Heat last offseason despite having two NBA seasons under his belt.

Martin made the most of his Heat opportunity and quickly became the NBA’s best two-way contract player. He became a fixture in the bench rotation, as his blend of athleticism and size made him a versatile weapon on both ends of the court.

The Heat eventually converted Martin’s two-way deal into a standard contract in February and made him part of its 15-man roster to make sure he was eligible for the playoffs.

Martin, who turns 27 in September, averaged career highs in points (9.2) and rebounds (3.8) this regular season. He also shot a career-best 50.7 percent from the field and raised his three-point percentage from 24.8 percent in 2020-21 to 41.3 percent in 60 regular-season games (12 starts) this past season with the Heat.

Nagging injuries slowed Martin toward the end of the season, but he was still part of the rotation for most of the playoffs. He logged double-digit minutes in 12 of the Heat’s 18-game postseason run that ended in Game 7 of the Eastern Conference finals.

“I feel like I can be one of those guys that fluctuates where it’s kind of whatever a team needs from me,” Martin said days after the Heat’s season came to an end in Game 7 of the Eastern Conference finals. “If you need a guy to come off the bench and bring energy and do that stuff, I can do that. I feel like I can step in and start. It doesn’t matter what the role or what a team needs from me, I feel like I can fill that void.

“Obviously, I think my game expanded shooting wise, being more efficient and being more consistent and still learning how to do that year in and year out. I just think that I took big steps and I think I’m only going to take even larger steps after this going forward.”

With the full taxpayer midlevel exception going to Martin and no cap space available, the Heat now only has minimum contracts to offer outside free agents if it does not want to trigger the hard cap.

So far in free agency, the Heat has agreed to terms to bring back three of its own players (center Dewayne Dedmon, guard Victor Oladipo and Martin) but has yet to make any outside additions.

With the NBA’s free agency moratorium ending Wednesday at noon, free agents around the league began formally signing their new contracts.

Dedmon signed the two-year, $9 million contract he agreed to last week. The second year is conditionally guaranteed.

“Dewayne brings essential attributes to the center position, including size, length, physicality, rebounding, scoring and a defensive mentality to protect the rim,” Heat president Pat Riley said in a statement to announce Dedmon’s signing. “He has proven to be a great veteran for us and we are fortunate to have him back.”

Oladipo and Martin are also expected to soon sign their new contracts.

But Oladipo will sign a different deal than the one-year, $11 million contract he agreed to last week. The Heat and Oladipo agreed Wednesday to restructure the terms to a two-year deal worth in the range of $18 million, according to a league source, that includes a smaller salary in the first season worth about $8.5 million and a player option in the second season.

While giving Oladipo a bit more long-term security, the smaller salary this upcoming season gives the Heat more wiggle room to avoid the luxury tax and against a potential hard cap that would be triggered by spending more mid-level exception money, using the $4.1 biannual exception or a sign-and-trade acquisition.

The Heat’s current salary-cap breakdown for next season includes 13 players: Jimmy Butler ($37.7 million), Bam Adebayo ($30.4 million), Kyle Lowry ($28.3 million), Duncan Robinson ($16.9 million), Oladipo (projected $8.5 million), Martin ($6.5 million), Tyler Herro ($5.7 million), Dedmon ($4.3 million), Nikola Jovic ($2.2 million), Max Strus ($1.8 million), Gabe Vincent ($1.8 million), Omer Yurtseven ($1.8 million) and Haywood Highsmith (partially guaranteed $1.8 million).

Guards Javonte Smart and Mychal Mulder, who are both participating in summer league, currently hold the Heat’s two two-way contracts. Two-way deals don’t count against the salary cap.

The Heat has about $147.7 million committed to salaries for next season with the NBA setting the 2022-23 salary cap at $123.7 million and luxury-tax threshold at $150.3 million.

Two players from the Heat’s season-ending roster remain available on the open market: Udonis Haslem and Markieff Morris are unrestricted free agents.

Minimum contracts are options to retain both Haslem and Morris. But the Heat can also exceed the salary cap to re-sign Haslem up to his maximum salary because it holds his Bird rights, and can use the non-Bird exception to offer Morris a deal with a starting salary of up to $3.1 million.

While now having only minimum contracts to offer outside free agents, the Heat could still upgrade its roster through a trade.

The Heat has been involved in the ongoing Kevin Durant sweepstakes after the superstar forward requested a trade from the Brooklyn Nets last week. Durant reportedly has the Phoenix Suns and Heat as two of his preferred trade destinations.

NBA teams are allowed to carry up to 20 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 17 players (15 on standard contracts and two on two-way contracts) by the start of the regular season.

▪ Following a 1-2 showing at the California Classic in San Francisco, the Heat’s summer league team is now preparing for five games in Las Vegas.

The Heat’s run at Las Vegas Summer League opens Saturday against the Boston Celtics (5:30 p.m., NBA TV).