Heat could get a rebate on the Terry Rozier trade

The Miami Heat traded a first-round pick to the Charlotte Hornets for Terry Rozier in 2024. Now that he's been arrested, the team may be looking for a refund.

Rozier was arrested last week and charged with conspiracy to commit fraud and conspiracy to commit money laundering, stemming from allegations that he provided inside information to gamblers about leaving a game early with an injury — allegations Rozier has denied.

The Heat added Terry Rozier for a playoff run that never took off

In January 2024, the Heat thought Rozier, averaging 23.2 points and 6.6 assists for the Hornets, was the missing piece to get them back to the NBA Finals. They sent the Hornets a first-round pick, lottery-protected in 2027 and unprotected for 2028, along with Kyle Lowry, assuming the more than $59M remaining on his salary.

It didn't go well. Rozier's statistics dropped to 16.4 PPG and 4.6 assists with Miami, and the Heat lost their first four games with him on the team. A neck injury kept Rozier out of the Play-In Tournament and the team's first-round loss. Last season, Rozier was down to 10.6 PPG, shooting 29.5% from three-point range.

The NBA was investigating Terry Rozier months before the trade

About 10 months before the trade, the NBA learned there was "unusual betting activity" related to Rozier in a March 23 game that he left early with an injury. The league investigated, but didn't inform the Heat even when it approved the trade. Did they tell the Hornets? That's unclear.

The Hornets won't say whether they knew about the investigation. If they did, they certainly didn't let the Heat know about it. Now, the NBA has placed Rozier on paid leave, and his NBA future is uncertain. Commissioner Adam Silver has the power to suspend Rozier or void his contract, which has $26.4M remaining.

With Rozier essentially a negative asset even before the arrest, the Heat would love to see his contract voided, giving them roughly $28M in space below the luxury tax line. Regardless of what happens with the contract, the Heat might try to get their draft pick back, if the Hornets knew about the gambling allegations and didn't inform them.

There's precedence for the NBA to adjust trades when teams withhold information. In 2015, the NBA ordered the Philadelphia 76ers to pay the New Orleans Pelicans $3M for not disclosing Jrue Holiday's injury history before a trade.

If the Heat knew Rozier was under investigation, they almost certainly would have found a different trade target. But while teams are required to come clean about injuries, they're not explicitly required to disclose information about investigations.

All this could be wishful thinking for the Heat, who would love to escape the consequences of their ill-advised trade. The allegations against Rozier might give them that exit.