Samuel Dalembert’s Contract: A Brief Analysis

Dalembert's Houston Rockets contract adds to Daryl Morey's flexibility in future trades

Let me preface this piece by saying that I am not the world’s biggest Samuel Dalembert fan.  I certainly don’t hate him.  Just never been a big fan of his, is all.

Like many Houston Rockets fans, I am still hung over from the aftermath of the Pau Gasol trade that wasn’t.  (And make no mistake: that trade wasn’t just for Pau; the Rockets would have likely gotten Nene, while still retaining the ability to re-sign Chuck Hayes, and would have forged one of the league’s best and deepest front lines for the next three years.)  After that, a Dalembert signing seems more like leaving with the home version of the game show you just lost on national television.

That said, with the signing of Dalembert to a two-year contract, the Houston Rockets have gotten themselves a legitimate starting center and now have a better chance to break their recent playoff drought this season.

The Contract
If reports are correct, the deal will pay Dalembert $7 million this season (a reasonable amount, given the market rate for centers lately) and $6.7 million in 2012-13.  The second year, however, will only be partially guaranteed for about $1.5 million if the Rockets waive Dalembert by a certain date (presumably some time in July 2012).

Many Rockets fans have reacted negatively to the news that Dalembert received more than a one-year deal and are upset that the partial guarantee will cut into the Rockets’ available cap room for the summer of 2012.

But Rockets fans need to realize that the addition of the second year may actually make this deal better than had it been only for one year.

If Dalembert has a good season for the Rockets in 2011-12, then Houston will have locked up a fairly good center for the (relative) bargain basement price of only $6.7 million.  And even if Dalembert disappoints this year, the Rockets may be able to benefit from his contract.

Second Year of Contract Beneficial
By including a second, partially guaranteed year, the Rockets have turned Dalembert’s contract into a potentially attractive trade asset for next offseason.

The Rockets could use Dalembert’s contract after the season (say, in a draft-day deal) to acquire up to $10.6 million in incoming salary from a team looking to cut its payroll.  With Dalembert’s salary only guaranteed for $1.5 million, the acquiring team could save about $9.1 million very quickly by waiving Dalembert, as opposed to trading for “normal” expiring contracts (which would require that team to wait through an entire season before it would see real cost savings).

By way of illustration only, let’s say that the Utah Jazz suffer through another losing season and decide that it just isn’t worth it to pay Al Jefferson his $15 million salary in 2012-13, preferring instead to save some money while Derrick Favors and Enes Kanter develop as the Jazz’s future front line.  The Rockets could trade Dalembert and a player like Jordan Hill or Terrence Williams (if his option gets picked up next month), perhaps along with a draft pick, for Jefferson.  Utah would save approximately $10 million in 2012-13 with such a trade.  The Rockets would acquire an All-Star caliber young big man on an expiring deal without trading away any key building blocks, foregoing 2012 free agency but potentially having an ungodly amount of cap room in 2013 (when both Jefferson’s and Kevin Martin’s deals expire).

I am by no means saying that any such trade is likely to happen.  But by negotiating a second, partially guaranteed year into Dalembert’s contract, the Rockets were able to provide Dalembert with the larger amount of total guaranteed money he wanted while also preserving the team’s salary cap flexibility in both free agency and trades next summer.  In fact, it may actually create even more flexibility in trades.

As I’ve said before, if Daryl Morey is about anything as a GM, it’s the preservation of salary cap flexibility.

Why the Delay?
Many people have wondered why Dalembert didn’t officially sign his contract until the night before the regular season opener, keeping him from being able to participate in even one Rockets practice before gametime.

While there are certainly several possibilities for the delay (such as the Rockets possibly searching for a trade of one of its backup point guards–Goran Dragic or Jonny Flynn–in order to relieve payroll and retain a spot on the roster for potential third-string point Jeremy Lin), the most likely answer is that the Rockets were attempting to engage both Dalembert and the Sacramento Kings in sign-and-trade discussions.

The benefit of acquiring Dalembert in a sign-and-trade deal would have been that the Rockets would retain all of their salary cap exceptions (such as the $5 million Mid-Level Exception and the $1.9 million Bi-Annual Exception), their trade exceptions (possibly even including the $7.35 million trade exception from the Shane Battier trade) and certain former players’ cap holds (such as Yao Ming’s).

There were two different sign-and-trade scenarios that could have played out.  The most beneficial one would have been if the Rockets could have signed and traded Hayes, along with some non-guaranteed contracts as filler, to Sacramento in exchange for Dalembert (which would have allowed the Rockets to maintain all cap and trade exceptions).  The less preferable–but still very beneficial–scenario would have been to absorb a signed and traded Dalembert into the Battier trade exception.  In either case, it would have cost the Rockets at least a future second round pick and/or some cash.

The biggest stumbling block to this approach, however, may not have been the Kings.  It was probably Dalembert himself.  Under the league’s sign-and-trade rules, any contract signed as part of such a deal must be for at least three seasons, although only the first season must be guaranteed.

The Rockets–who greatly value their 2012 cap room–would not have wanted to increase the guarantee in Year 2 above the agreed-upon $1.5 million and would not have wanted any guarantee in Year 3.

From Dalembert’s perspective, that was likely unacceptable.  He was already foregoing a potential big pay day in 2012 if he has a great season this year, with the Rockets locking him up for $6.7 million.  To be further locked up for 2013-14 at no more than $7 million–no matter how well he plays and with no guarantee that he’ll even get that much–was probably too much risk for him to take on in his contract.

So, despite what were likely tireless efforts by the Rockets (if my sense of the situation is correct), they were unable to work a sign-and-trade for Dalembert and therefore needed to renounce all cap exceptions, trade exceptions and players’ cap holds.

In my estimation, trying to retain those “assets” was worth the delay.  Too bad it didn’t work out how the Rockets had hoped.

But, then again, what else is new for them this offseason.

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