Beginning on October 1, Tyler Herro is eligible to sign a three-year extension that can be worth as much as $150 million. With the Miami Heat continuing to prioritize cap flexibility and the acquisition of another superstar, very few people expect them to pay him. But there’s a $125 million middle ground that could change everything.

Players can still be traded after getting extensions if they sign for 120 percent (or less) of their final year’s salary, and so long as their annual raises are limited to 5 percent. For the Heat and Herro he could put pen to paper on a three-year, $124.7 million extension, and still be traded.

Traveling down this path serves two purposes: It keeps all of Miami’s options open, and gets Herro paid.

The Heat should see if Tyler Herro would accept this

None of this means a darn thing unless Herro’s on board. He may want the full $150 million, and might also not want to sign an extension that still puts him at risk of being traded.

Financially speaking, though, a three-year, $124.7 million offer is far from insulting. Here’s how it would break down each year:

• 2027-28: $39.6 million (22.37 percent of the cap)
• 2028-29: $41.6 million (21.95 percent of the cap)
• 2029-30: $43.6 million (21.49 percent of the cap)

Herro may want more. He’s eligible for more. And he can get waaay more if he just plays out his contract and hits free agency in 2027. But that’s a huge risk on his part.

Never mind the current free-agency landscape. Pure shooting guards who aren’t quite floor generals and not big enough to defend wings seem to be falling out of style. Look at how Quentin Grimes and Cam Thomas are being viewed by the market, and their own teams. And look at how little leverage Jalen Green had in extension talks with the Houston Rockets last summer.

To be sure, Herro is better than all of these players. He’s an All-Star. He’s not an All-NBA player, at least not yet. Signing an extension that puts him on track to be the league’s 39th-highest paid player when it takes effect may not be what he wants, but it’s not necessarily a discounted rate, either.

Don’t sweat the Heat giving up cap space

So much about Herro’s extension eligibility is viewed through the lens of Miami’s projected 2027 cap space. The All-Star guard comes off the books that summer, at which time the Heat could have over $90 million in spending. That’s all well and great, but superstars aren’t changing teams via free agency anymore.

Maintaining trade options is more important. Herro becomes immovable for six months if he signs his max extension. That takes the Heat past the February 5 trade deadline. And while they no longer have to plan around a certain two-time MVP’s midseason availability, removing Herro from the table of prospective blockbuster talks doesn’t make much sense.

Enter the workaround.

A three-year, $125 million extension keeps every possible midseason scenario intact. It costs 2027 cap space, but Herro should be easily movable at his new number. This is one of those deals that might even increase his trade value to other teams.

Plus, because an extension won’t kick in until 2027-28, Miami would maintain its path to carving $30-plus million of spending power next summer—with Herro still on the books. Again, whether the 25-year-old is willing to sign a three-year, $125 million extension remains to be seen. But it behooves the Heat to find out.