No, this is not where Kelly Olynyk wanted to be, at the intersection of playing time, playoff hopes … and the NBA’s luxury tax.
And yet it is where the outside-shooting 7-footer stands as the Miami Heat head into the final two months of the regular season.
If Olynyk achieves his contract bonus for playing at least 1,700 minutes or the Heat make the playoffs, which is another Olynyk bonus clause, then the Heat are essentially locked into paying the luxury tax and being on the clock for the onerous repeater tax.
Should Olynyk not clock the targeted minutes and the Heat miss the playoffs, then there are contract machinations that could get the Heat under the tax, an NBA source with knowledge of the Heat situation confirmed to the South Florida Sun Sentinel.
With the Heat still over the 2018-19 tax even in the wake of the trades of Tyler Johnson and Wayne Ellington at last week’s deadline, the most feasible path to avoid the tax would be Olynyk missing out on his $1 million bonus for playing 1,700 minutes as well as his $400,000 bonus for the Heat making the playoffs.
“I didn’t even know anything about that,” Olynyk said. “But I guess I would be a part of it.”
Olynyk, who played a career-high 1,779 minutes last season, his first with the Heat, stood at 1,006 going into Sunday’s game against the Golden State Warriors at Oracle Arena. In order to reach the 1,700-minute bonus, it would require an average of 23.9 minutes if he appears in each of the season’s remaining games.
“When you’re not playing, you just want to play,” Olynyk said of considering neither the financial impact to himself or the Heat, but rather the desire to contribute. “I guess when you’re closer to it you start thinking about it.
“I don’t even know where I’m at, honestly. So maybe when you’re closer to it, you start thinking about it. But right now I’m just trying to play and get wins and keep in this playoff picture and try to solidify a spot.”
Teams in the luxury tax four years in any five-year period have to pay an additional dollar in tax to the league for every dollar above the team tax payroll threshold, beyond the tax tiers already in place. The Heat, for example, currently are at a tier that requires a $1.50 additional payment for each dollar above the luxury tax.
“Not something I’m aware of at all,” said Olynyk, who has a $12.5 million base salary.
Even if Olynyk’s bonuses are not achieved, the Heat face a delicate balance in filling out their roster for the balance of the season, mandated to move to 14 players from the current 13 by Feb. 21. The Heat and other teams have been in similar positions before against the tax, toggling through the final weeks of the season between 13- and 14-player rosters (with players on two-way contracts not counting against that roster total).
The Heat apparently will continue to prioritize roster growth, which could lead to the signing of a player for the balance of the season in order to retain the rights of such a player going forward, including for summer league.
Reaching a buyout with a current roster player also is an option, as the Heat did with Beno Udrih in 2016 to alleviate tax concerns. There does not, however, appear to be such a candidate on the current roster, given the lack of short-term contracts on the team’s payroll.
The Heat took a lighthearted approach to Olynyk’s minutes bonus last season, when it was reached with a week left in the season, with coach Erik Spoelstra quipping, “Dinner, drinks, beers, all that is on him. I’m going to see if I can get tickets to a play. All that is on him. I’m going to bill his account for everything.”
The bonus was put into Olynyk’s contract as a means of having enough cap space in the 2017 offseason to re-sign Ellington. Guard Dion Waiters was given a similar bonus clause of $1.1 million for appearing in 70 games, one not achieved this season due to the rehabilitation period from last year’s ankle surgery.
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