The Miami Heat signed free agent big man Chris Andersen to a one-year, $1.7 million contract Wednesday, ESPN's Brian Windhorst reports. The deal also includes a player option for the 2014-15 season valued at $1.8 million, which could bring the total payout to $3.5 million from Miami.
While that contract may seem a tad cheap for someone who thrived as part of a championship team last season, there's an explanation for it all. After being released via the amnesty clause by the Denver Nuggets last year, Andersen's salary for the 2013-14 season involves a somewhat complex formula involving both his old and new contracts.
Instead of making just $1.7 million next season, Andersen's total payout should actually more than triple that amount.
As Mike Prada broke down for a somewhat similar situation involving Andray Blatche and the Washington Wizards, Andersen doesn't simply get to receive two salaries from two teams. Instead, a special formula is used to "offset" the salary paid by his former team, with the Nuggets paying the remaining figure.
However, because Andersen decided to sign for such a small amount, the Nuggets will still be on the hook for nearly all of his salary next season. As Prada described, "This offset amount is equal to to one half the difference between the player's salary with his new team and the minimum for a one-year veteran player."
Given that Andersen signed for just $1.7 million and the one-year veteran salary is $788,872, the total offset amount handed over to Denver is just $455,564. That leaves us with the remaining accounting on Andersen's payout for next season:
Denver pays: $4.36 million
Miami pays: $1.7 million
That gives Andersen a total payout of $6.06 million, which seems far more in line with what a top-notch defensive big man would receive from a short-term deal on the open market. However, Miami will still be on the hook for just the salary agreed to, $1.7 million, making Birdman a possible bargain over the next year.
The biggest losers in this situation, really, are the Nuggets. If Andersen had been able to find a significantly larger deal elsewhere, say for the mid-level exception starting at around $5 million, the offset figure for Denver would have been much higher. However, such a move wouldn't have significantly increased Andersen's overall income, making a return to the league's two-time defending champions a logical move.