Big 3 discuss contract options

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After agreeing to all opt out of their contracts together, Miami Heat stars LeBron James, Chris Bosh and Dwyane Wade have been discussing financial terms of new contracts among each other, sources told ESPN.com.

Bosh's agent, Henry Thomas, said he told Heat president Pat Riley of Bosh's decision to opt out on Sunday afternoon. Wade's decision came Saturday, and LeBron's on Tuesday. The deadline for the players to declare free agency is midnight Monday

The talks between the three players is the strongest indication yet that James plans to re-sign with the Heat after he becomes a free agent on Tuesday. Unlike in 2010 when all three took nearly identical contracts, the discussions this time have included the possibility that James would draw the highest salary among the three, sources said.

James, 29, has never been the single highest-paid player on his team in his 11-year NBA career.

Under league rules, players are not allowed to negotiate new contracts with their teams until July 1. However, there is nothing preventing the players from working it out among themselves, and cutting up the Heat's upcoming record $55 million in available cap space is believed to have been a major part of the discussion when Wade, James and Bosh held a meeting last week in Miami.

The trio of Heat stars working collectively have three general options on how to put together their deals that could affect how aggressive the team will be going after other free agents. The Heat's front office, led by president Pat Riley and general manager Andy Elisburg, will consult but have different plans for all three contingencies, sources said.

James, Bosh and Wade could all re-sign and take raises to the maximum salary starting at $22 million each, which would carry the Heat into the luxury tax and significantly limit their spending options this season and in the following seasons.

They could all take significant pay cuts, perhaps in excess of $5 million per year each, that would take the Heat below the salary cap and leave enough room to chase a major free agent like point guard Kyle Lowry. Though the Heat may ultimately investigate the possibility of Carmelo Anthony, that option has not been seriously discussed among the parties yet, sources said.

The last option is that the Heat stars could all take moderate pay cuts and stagger their salaries at different levels. This would likely not leave significant cap space but it would take the Heat below the luxury tax line and enable them up to use the full mid-level exception of $5.3 million and the biannual exception of $2 million to bring in multiple role players.

With James saying the team needs to improve "at every position," it seems possible the third option may end up being the most likely, especially after the Heat players all took pay cuts when they came to Miami four years ago.

Udonis Haslem, who declined a $4.6 million player option for next season to add more flexibility, is also expected to be a part of the plans as he works out a new long-term deal that reduces his annual salary.

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