The Miami Heat have exercised their $19.44 million team option for 2021-22 for guard Goran Dragic.

Subsequent reporting from ESPN's Adrian Wojnarowski is that Dragic could be used as part of a sign-and-trade for Toronto Raptors guard Kyle Lowry. Lowry will be an unrestricted free when 2021 free agency opens.

Miami could have created as much as $20 million in cap space, had they declined Dragic's team option. That amount was likely too shy of Lowry's desired salary. Now, the Heat can trade Dragic with another smaller contract or two, and can get to the first-year salary Lowry wants.

By taking this path, Miami will also conserve the ability to sign-and-trade some of their other free agents. The Heat will also have the full Non-Taxpayer Mid-Level exception of $9.5 million available in free agency. And the team has their own free agents like Duncan Robinson and Kendrick Nunn to consider re-signing as well.