Mailbag: When will Tyler Herro get his extension from the Heat? It’s complicated

The Miami Herald Heat mailbag is here to answer your questions this offseason.

If you were not able to ask this time, send your questions for future mailbags via Twitter (@Anthony_Chiang). You can also email them in to achiang@miamiherald.com.

@CharMasterTCG: When do you think the Heat will announce Tyler Herro’s extension since they said they’re running it back?

Anthony Chiang: The Heat never said it’s definitely running it back. An organization led by Pat Riley would never put itself in that kind of box when moves that could upgrade the roster are still possible. The bottom line is the Heat likes its current roster and is comfortable opening the season with this group. But the Heat won’t turn down an opportunity to improve, whether it’s a trade for Kevin Durant or a smaller deal, if the price is right. It’s just that after conversations with the Brooklyn Nets earlier this summer regarding a potential trade for Durant, Miami is no longer in a holding pattern awaiting clarity from a Brooklyn front office that is looking for a historically huge return for the superstar forward. The Heat is operating as if its current roster is the one it will take into the 2022-23 season.

As far as Tyler Herro’s extension, there’s really no need for the Heat to rush to get it done because it’s only competing against a mid-October deadline (the final day before the start of the regular season) and not with outside offers. There’s also little incentive on the Heat’s side to sign Herro to an extension quickly — even if it has already determined that it will offer him one prior to the deadline — because signing him to an extension would essentially make him untradeable until the 2023 offseason.

Why? First-round picks (Herro was a first-round pick in 2019) who receive extensions before their fourth NBA seasons are subject to the “Poison Pill Provision,” which would make it difficult for the Heat to include Herro in a trade until July 1, 2023.

This provision means when that player is traded between the date the extension is signed and the date it takes effect, the player’s trade value for the receiving team is the average of the salaries in the last year of their rookie scale contract and each year of their extension. But the outgoing salary in the trade for the sending team is the players’ actual salary for that season in the last year of their rookie scale deal.

In other words, it would be very hard for the Heat to trade Herro for the entirety of this upcoming season if he signed an extension. The discrepancy between his incoming salary and outgoing salary for salary-matching purposes would be so wide that both teams would need to add a large amount of additional salary to the transaction or a third would need to be brought in to absorb some of the excess salary to have any chance of completing the deal.

So even if the Heat is content on moving forward with this current roster and “running it back,” why would the organization sign Herro to an extension nearly two months before the deadline when doing so would significantly limit its trade options? And this goes for most players who are up for rookie extensions.

Justise Winslow signed a non-max rookie extension in 2018, which is the kind Miami would offer Herro. As a reference point, Winslow’s extension was agreed to just before the deadline during the preseason.

The point is there’s really no reason to rush this. The Heat should continue to keep its trade options open as long as it’s able to, especially with the Durant and Donovan Mitchell situations still unresolved.

One could argue the Heat should pass on signing Herro to an extension altogether this offseason to keep him available as one of its top trade assets in case another star becomes available in the next 11 months. But that’s a different mailbag question for another week.

Joe: What about going after Jae Crowder? He might be able to fill the void left by P.J. Tucker’s departure.

@Khaleef_1: Who are the most likely Heat trade targets at power forward?

Anthony: The answer here is similar to the first question in this mailbag.

To trade for a power forward to replace P.J. Tucker, the Heat would likely be dealing away salary and draft capital that’s needed to trade for a superstar. Just like signing Herro to an extension would significantly limit what the Heat can do in the trade market over the next year, so would dealing away a pick and salary for a non-star player.

The Heat wants to remain in the conversation when stars become available on the trade market. To do that, Miami needs to keep its assets and maintain its flexibility until such a deal presents itself.