Houston Rockets
Houston Rockets Salary Cap Update: “Total Rebuild” Edition
After closing the book on an all-too-brief 2011-12 NBA season and opening up the 2012 offseason with a flurry of activity, let’s take a look at the Houston Rockets’ current salary cap situation.
Published
12 years agoon
After closing the book on an all-too-brief 2011-12 NBA season and opening up the 2012 offseason with a flurry of activity, let’s take a look at the Houston Rockets’ current salary cap situation.
The Rockets’ Latest Moves
Since my last update, the Rockets have made the following roster moves:
- Prior to the end of the season, the Rockets signed Courtney Fortson and Diamon Simpson each to two-year deals for the league minimum, with team options on the second year with a non-guaranteed salary (the options were subsequently picked up).
- On June 26, the team traded Chase Budinger and the draft rights to Lior Eliyahu to the Minnesota Timberwolves in exchange for the #18 pick in the 2012 NBA Draft.
- On June 27, the Rockets traded the #14 pick in the 2012 NBA Draft, Samuel Dalembert, their 2014 second round pick and cash considerations to the Milwaukee Bucks in exchange for the #12 pick in the 2012 NBA Draft, Shaun Livingston, Jon Brockman and Jon Leuer.
- The Rockets selected Jeremy Lamb (#12), Royce White (#16) and Terrence Jones (#18) in the 2012 NBA Draft.
- The team purchased the draft rights to Turkish power forward Furkan Aldemir (the #53 pick in the 2012 NBA Draft) in a four-team trade involving the Los Angeles Clippers, the Dallas Mavericks and the Utah Jazz.
- During the July Moratorium, the team signed Donatas Motiejunas to his first round rookie scale contract at the maximum permitted 120% of his scale salary.
- On July 11, the Rockets traded Kyle Lowry to the Toronto Raptors in exchange for Gary Forbes and a future first rounder that is a likely lottery pick.
- Also on July 11, the team signed and traded Marcus Camby to the New York Knicks in exchange for Toney Douglas, the non-guaraneed contracts of Josh Harrellson and Jerome Jordan, and the Knicks’ second round picks in 2014 and 2015.
- On July 13, the Rockets waived Luis Scola via the amnesty provision, clearing his salary off of the team’s salary cap. (Scola was subsequently claimed off waivers by the Phoenix Suns with a partial claim bid; and the Suns will pay Scola approximately $4.5 million per season for each of the next three years, with the Rockets paying the rest of the $31 million remaining on Scola’s contract. Major credit to Rockets owner Leslie Alexander for his willingness to pay $17.5 million for one of his best players to NOT play for him, all in the name of salary cap flexibility to pursue the opportunities necessary to return the team to championship contention.)
- The Rockets signed Jeremy Lin to a three-year, $25.1 million offer sheet on July 14, which was not matched by the New York Knicks.
- On July 18, the team waived Leuer and Jordan. (Leuer was subsequently claimed off of waivers by the Cleveland Cavaliers.)
- On July 20, the Rockets signed and traded Courtney Lee to the Boston Celtics in exchange for JuJuan Johnson, the non-guaranteed contracts of Sean Williams and E’Twaun Moore, the draft rights to Jon Diebler, and the Charlotte Bobcats’ 2013 second round pick previously acquired by Boston. (Moore was subsequently waived.)
- The team signed Omer Asik to a three-year, $25.1 million offer sheet on July 21, which was not matched by the Chicago Bulls.
Explaining the Lin and Asik Deals
As noted above, Lin and Asik each signed (presumably) identical three-year, $25.1 million offer sheets with the Rockets. Because both players fall within the unique category of high-quality restricted free agents with only one or two years in the league (both are two-year veterans), Lin and Asik were subject to what has become commonly known as the “Gilbert Arenas” provision of the CBA, or the Arenas Rule. (More on the “Gilbert Arenas” provision can be found here).
The Arenas Rule prohibits any team from offering these types of players a starting salary greater than the Non-Taxpayer Mid-Level Exception ($5 million for 2012-13) and only a 4.5% raise in Year 2 of the contract (in this case, $5.225 million). Starting in Year 3, the salary can balloon to up to the applicable maximum player salary. Like with other restricted free agents, the player’s former team has the right to match any offer for the player.
The rationale for these salary limits is that the player’s former team must be allowed at least some avenue by which to potentially match any offer sheet, either via Early Bird rights (which allows a team to pay up to the average player salary for a player coming off a two-year contract or having spend two years with the team) or the Non-Taxpayer Mid-Level Exception (for Non-Bird free agents with only one year with the team). The reason for the ballooning of the salary in Year 3 is that the player’s former team would have obtained full Bird rights on such player by that time and would then be allowed to offer such player a maximum salary.
From a salary cap standpoint, if the team extending the offer sheet wishes to give such a player a raise greater than 4.5% in Year 3 of the offer sheet, it must have at least enough cap room available to cover the average annual salary; and the player will count against the offering team’s salary cap (and for luxury tax purposes) at that average figure in each year of the offer sheet. However, unless the player’s former team has a similar amount of available cap room, it must have the player’s actual salary from year to year count against its salary cap and luxury tax calculations.
For lack of a better term, Rockets GM Daryl Morey and the Houston front office “artfully exploited” the Arenas Rule.
By limiting the Lin and Asik offer sheets to only three years (as opposed to four-year deals), the Rockets were able to concentrate the balloon payment into Year 3, rather than having some of that ballooning salary spread over multiple seasons. The offer sheets will pay Lin and Asik the maximum player salary for five-year veterans (approximately $14.898 million), making it extraordinarily painful for either New York or Chicago (both tax-paying teams) to match. The cap hit for Houston on each player is $8.37 million in each season; but the cap hit to their former teams would be $5 million in 2012-13, $5.225 million in 2013-14 and $14.898 million in 2014-15 (which is the actual payment schedule, even for Houston).
Making matters worse for the Knicks and Bulls, the year in which the massive cap hit for their now-former players would occur (the 2014-15 season) is also the first year in which the league’s most punitive luxury tax — the “repeater tax” — will impact teams that are taxpayers in each of the three prior seasons. Is it any coincidence that both New York and Chicago project as taxpayers in each of those season? I think not.
For those wondering what the salary cap impact would be if the Rockets later decide to trade either Lin or Asik, the receiving team would get the player at the same $8.37 million per year cap hit at which Houston has them. While it is still not completely clear how the actual salary payments would be treated, those would presumably be covered by the receiving team in full. In other words, if the Rockets traded Asik to another team in the summer of 2014, Asik would only count $8.37 million for salary-matching purposes, but his entire $14.898 million salary for 2014-15 would presumably need to be covered by his new team (the Rockets would likely be unable to contribute more than the maximum $3.3 million cash allotment permitted).
Salary Commitments and Potential Cap Room
(DISCLAIMER: Further roster moves will likely be made. The figures below probably do not represent the Rockets’ true cap situation once such additional moves are made; they are solely intended to give you a picture of the Rockets’ current cap situation.)
Barring any further roster moves, the Houston Rockets now have approximately $53.50 million in team salary for the 2012-13 season: Kevin Martin ($12.44 million), Lin ($8.37 million), Asik ($8.37 million), Livingston ($3.5 million, only $1 million of which is guaranteed), Patrick Patterson ($2.10 million), Douglas ($2.07 million), Marcus Morris ($1.91 million), Forbes ($1.5 million), Motiejunas ($1.36 million), Johnson ($1.09 million), Brockman ($1 million), Williams ($915,852, non-guaranteed if waived by August 1), Chandler Parsons ($888,250), Greg Smith ($762,195, of which 50% is guaranteed), Fortson ($762,195, non-guaranteed), Simpson ($762,195, non-guaranteed), Harrellson ($762,195, non-guaranteed if waived by August 15), the rookie scale cap holds for Lamb ($1.68 million), White ($1.37 million) and Jones ($1.24 million), and the cap hit from the Derek Fisher buyout ($644,005; more on that here).
Based on this season’s maximum salary cap of $58.044 million, in order for the Rockets to maintain rights to all of their current players, they will have approximately $4.55 million in salary cap room. If the Rockets simply waive their fully non-guaranteed contracts (Williams, Fortson, Simpson and Harrellson), though, that number jumps to approximately $7.75 million in cap room. In the event that the Rockets decide to waive (and eat the partial guarantees on) Livingston and Smith, that figure could conceivably reach as high as $10.63 million. However, those figures could be reduced slightly (by up to $858,440) if one or more of the 2012 first round picks end up signing contracts with the Rockets for up to the maximum permitted 120% of their rookie scale salaries.
Contrary to the popular belief of the national media, the Rockets still have PLENTY of cap flexibility to pursue free agents and trades — namely, for a certain Orlando Magic center — even after signing both Lin and Asik to lucrative deals.
Potential Superstar Acquisition
Much has been made of the Rockets’ pursuit of Dwight Howard. Houston is currently (and finally!) being recognized by most of the mainstream media as the frontrunners to either land Howard or possibly acquire another piece (like Lakers center Andrew Bynum) as part of a three-team trade with Orlando. The Rockets possess the unique combination of (1) enticingly high draft picks (most notably, the Toronto pick acquired in the Lowry trade), (2) high-ceiling young players (in particular, Lamb, Motiejunas and Parsons) and (3) the cap flexibility — via cap room and/or expiring or non-guaranteed contracts — to take on some additional salary from Orlando in order to clear the Magic’s books for a fresh start post-Howard.
Because the Rockets possess the potential for either/both (A) significant cap room (if they waive all of their non-guaranteed contracts) to absorb incoming Orlando players and/or (B) salary-matching trades financially beneficial to Orlando (if the Rockets instead use expiring or non-guaranteed contracts for salary-matching purposes), there are countless scenarios in which a Howard-to-Houston trade can be accomplished. It is virtually impossible to predict which players, picks and other assets will be included in whatever trade might end up happening. However, in order to illustrate the Rockets’ cap flexibility, I will walk through one hypothetical variation of such a trade.
Let’s say the Rockets trade Martin, Patterson, Lamb, Jones, the Toronto first round pick, the Dallas first round pick and the Charlotte second round pick to Orlando in exchange for Howard ($19.54 million), Jason Richardson ($5.8 million in 2012-13, $6.2 million in 2013-14 and a $6.6 million player option in 2014-15) and Chris Duhon ($3.25 million in 2012-13 and $3.5 million in 2013-14, only $1.5 million of which is guaranteed if waived on or prior to June 30, 2013).
(NOTE: This does not in any way reflect what I think will or should happen and yes, I know that’s a lot to give up for that Orlando package. All the more reason to use this as the hypothetical.)
By waiving all of their non-guaranteed contracts, the Rockets can create sufficient cap room to absorb the salaries for Richardson and Duhon, while sending Orlando back only draft picks and the draft rights to Lamb and Jones. Then, with the Rockets largely capped out by that first component trade, they could then ship Martin and Patterson to Orlando for Howard. (FYI, the Martin-Patterson combination comes out to virtually the absolute least salary an over-the-cap team could trade to get back Howard’s contract.)
Different variations of a Howard trade (including the hypothetical above) will likely generate various trade exceptions to Houston and/or Orlando; and some scenarios could be conceived to potentially create a very large trade exception. Do not be surprised if a final Howard trade configuration has the result of generating a huge trade exception for Orlando. Magic GM Rob Hennigan is creative enough to structure it that way.
Other Trade Options
The pursuit of a mega-trade for a star player is not the only use to which the Rockets can put their cap room. By being under the salary cap, so long as the Rockets do not exceed the maximum salary cap by more than $100,000 upon completion of a particular trade, the team would not be subject to either salary matching rules or the 60-day waiting period to aggregate salaries of players acquired in prior trades. In other words, if the Rockets are $10 million below the cap, (1) they can trade a $2 million player in exchange for another team’s player making up to $12.1 million or (2) they can aggregate the salaries of Douglas ($2.07 million, recently acquired from New York), Johnson ($1.09 million, recently acquired from Boston) and Brockman ($1 million, recently acquired from Milwaukee) in exchange for another team’s player making up to $14.2 million.
If the Rockets cannot find another player — either via free agency or trade — who is worth pursuing or is willing to sign with/come to Houston, then having available cap room can benefit the team in other ways. For instance, the Rockets can help facilitate trades between two or more other teams that might not otherwise be able to complete their trade without use of the Rockets’ cap room. In exchange for facilitating a trade, the Rockets would receive some consideration, be it cash, picks or players.
Also, they could just sit on their cap room and wait for a team to get desperate enough to trade them something for the privilege of using that room. Oklahoma City used this strategy a few years ago with Utah (then fearful of paying the luxury tax), which coughed up talented young point guard Eric Maynor in exchange for the Thunder taking on the remaining few months of Matt Harpring’s contract (which itself was largely covered by insurance).
Believe it or not, the Rockets actually have assets other than cap room that they can use in trades this summer. Patterson, Morris, Parsons, Motiejunas, Lamb, White and Jones all have some decent trade value as young prospects. The Toronto pick is extraordinarly valuable. The future Dallas first rounder is another nice asset, as is the Charlotte second rounder. The Rockets hold the draft rights to at least two players — All-Euroleague point guard Sergio Llull and the aforementioned Aldemir — who may interest teams now or in the future.
Martin will have a $12.44 million expiring contract while still being a very productive offensive player. Those anxious to “dump” Martin at the first chance, please note that Martin’s expiring contract may be more valuable in trades than $12.44 million in additional cap space. The Rockets can take back up to $17-18 million in incoming salary in exchange for Martin’s outgoing salary.
Conclusion
I know there is a great feeling of disappointment by many fans after the Rockets ended the 2012 NBA Draft without a superstar or a top-5 pick. Fortunately, the stellar play of the team’s rookies in the NBA Summer League in Las Vegas last week, together with all the rumored Howard trade talk, has seemingly caused such disappointment to dissipate.
Meanwhile, the Rockets have set themselves up nicely to make a run at a major acquisition in the coming months, either via free agency or trade, by positioning themselves as one of few NBA teams with both cap room and a slew of tradeable assets. They have compiled so many assets in the past 2-3 years that they can afford to “overpay” for a talent upgrade if necessary. Or they can make some moves for the future while still preserving salary cap flexibility for 2013 (when the Rockets, with their current roster, could conceivably have as much as $27 to 32 million in cap room!) and beyond, adding even more flexibility to trade other parts going forward in their pursuit of a star acquisition.
It’s only fitting that Morey is on his way to the Summer Games in London. He, with significant help from Mr. Alexander and the rest of the Houston front office, has given the Rockets the flexibility of an Olympic gymnast.
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Houston Rockets
Houston Rockets Draft Decisions: Who Will Be the #3 Pick?
Published
3 months agoon
June 24, 2024![Houston Rockets Podcast](https://www.clutchfans.net/wp-content/uploads/2024/06/thumbnail-clutchfans-podcast-2024-06-24-2.jpg)
It’s officially NBA Draft Week!
The weeks of speculation are coming to an end as we’ve just about arrived at the 2024 NBA Draft. The Rockets hold picks #3 and #44 and could be quite active on the trade market.
Dave Hardisty and David Weiner paired up on the ClutchFans podcast to discuss the options before the Houston Rockets as they approach the June 26th NBA Draft. Is it really down to Donovan Clingan and Reed Sheppard as options? The pair also discuss trade-down options and whether Devin Carter could be intriguing to Ime Udoka. And are the Rockets a darkhorse for a Paul George trade?
The podcast premieres at 8:00am CT! Come join us!
Houston Rockets
Podcast: Houston Rockets options with the #3 pick of the 2024 NBA Draft
Published
4 months agoon
May 21, 2024![Houston Rockets 2024 NBA Draft prospects Zaccharie Risacher Stephon Castle Reed Sheppard Donovan Clingan](https://www.clutchfans.net/wp-content/uploads/2024/05/houston-rockets-nba-draft.jpg)
The offseason is now underway.
The forecast looks good for the Houston Rockets, but… there’s pressure as well this offseason because there are a handful of other West teams that might have rosier futures. Ime Udoka wants to win and win big. As we are about five weeks away from the NBA Draft, what are the Rockets looking to do this summer?
David Weiner joined Dave Hardisty on the ClutchFans podcast to discuss the Rockets shockingly landing the #3 pick and their options in this draft, including Reed Sheppard, Donovan Clingan, Zaccharie Risacher, Stephon Castle, Matas Buzelis and others. They also discuss the possibility of some big game hunting in Houston.
Houston Rockets
Podcast: Steven Adams, Mikal Bridges and Trade Possibilities for the Rockets
Published
7 months agoon
February 3, 2024![Houston Rockets Trade Deadline 2024](https://www.clutchfans.net/wp-content/uploads/2024/02/houston-rockets-trade-deadline.jpg)
The Houston Rockets already made one deal, acquiring center Steven Adams from Memphis for a handful of second-round picks, but we still have several days left before this Thursday’s NBA Trade Deadline.
Are more deals on the way?
Rumors of interest in Mikal Bridges have swirled, with the Rockets holding precious (and unprotected) first-round picks from Brooklyn. They also could use some help inside this season, which Adams can not provide. Shooting is always in demand.
David Weiner joined Dave Hardisty on the ClutchFans podcast to discuss the Adams trade, its impact on the Rockets in 2024-25 and beyond, the Mikal Bridges rumors, the Brooklyn picks, other trade possibilities and options for Rafael Stone moving forward. Also discussed is the play of Houston’s core 6 prospects: Amen Thompson, Cam Whitmore, Alperen Sengun, Jabari Smith Jr., Tari Eason and Jalen Green.
![Steven Adams Houston Rockets](https://www.clutchfans.net/wp-content/uploads/2024/02/steven-adams-1.jpg)
The Rockets made a surprise trade on Thursday, sending the contract of Victor Oladipo and three second-round picks to Memphis for center Steven Adams.
The deal came together quickly and the Rockets had a small window to get it done, hence why this trade was made with a week to go until the trade deadline.
The Price
When you consider that Memphis did this for cost savings primarily and that Adams would not play for any team in the league this season, the price seemed a little high to me. The Rockets gave up the OKC second-round pick this year, which is no big loss, but they also give up the better of Brooklyn’s or Golden State’s second-round pick this season. That’s a pretty good pick (likely in the late 30’s). They also give up the better of Houston’s or OKC’s second-round pick in 2025. If things go as planned for the Rockets, that pick should be in the 45-55 range.
But they didn’t sacrifice a first-round pick, which would have been brutal, and they were not going to use all those seconds this season. So it’s just a matter of opportunity cost — who else could they have gotten for this package?
My understanding is they (particularly Ime Udoka) are very high on Adams.
The Rockets also did this move for cap purposes as well. By moving out the Oladipo contract, which was expiring, and bringing in Adams’ deal, which is signed for $12.4M next season, the window for the Rockets to put together a trade package for a star player is extended out until the 2025 trade deadline. They continue to wait to see which players, if any, shake loose here and become available. They want flexible (see: expiring) contracts that they can combine with assets and this gives them another year to be in that position.
The Trade
It’s not often that the Rockets acquire a player I had not considered beforehand but that’s the case with Steven Adams. The Rockets sorely need a big with size that provides more traditional center strengths, making Clint Capela, Robert Williams, Nick Richards or Daniel Gafford potential candidates, but Adams was overlooked for a few reasons.
First, the 30-year old big man is out for the season after knee surgery cost him the entire 2023-24 campaign, so the Rockets won’t get any benefit from this trade this season. Secondly, Adams is not your traditional center either when it comes to rim protection.
But what Adams does do, he’s really good at and he has some of the same strengths of Brook Lopez, who the Rockets tried to sign in the offseason. Adams is quite possibly the strongest guy in the league and a legitimate 6-foot-11 with a 7-foot-5 wingspan. He’s an outstanding screen-setter, something that could really benefit the likes of Fred VanVleet, Amen Thompson and Jalen Green. He was also an elite rebounder last season, finishing 6th in the league in caroms at 11.5 a game despite playing just 27.0 minutes a contest.
After watching Jonas Valanciunas absolutely bully the Rockets inside on Wednesday, it should be apparent by now to everyone that this was a pretty big need.
In 2021-22, the Memphis Grizzlies finished #2 in the West at 56-26. Their top two players in Net Rating that season were Dillon Brooks (+11.0) and Adams (+8.3), key cogs in a defense that held opponents to 108.6 points per 100 possessions. They’re both now Houston Rockets.
So this adds another trusted vet to Ime Udoka’s rotation.
The question is will the 30-year old Adams return to form after the knee injury? Adams sprained the posterior cruciate ligament in his right knee a year ago, which cost him the end of that season and the playoffs. He tried rehabbing it and it never got better, so surgery became the option just as this season was kicking off.
I like to think the Rockets did their due diligence on that, despite the short time it took for this deal to come together, but that’s unclear.
If he does bounce back, then Udoka has a big man he can turn to reliably in situational matchups or on nights when the younger bigs struggle. He wouldn’t be Boban or even Jock Landale in that scenario — he’s going to play, so the frontcourt depth in 2024-25 should be better. In the end, they got a starting-caliber center who will have no problems coming off the bench, and that’s what they were looking for.
Houston Rockets
On the KPJ trade and future of the Rockets
Published
11 months agoon
October 18, 2023![](https://www.clutchfans.net/wp-content/uploads/2023/10/kevin-porter-jr-rockets.jpg)
The Houston Rockets are back to being a professional NBA team once again.
The Rockets finally ended the Kevin Porter Jr. era on Tuesday, coughing up two second-round picks in order to unload his contract to the Oklahoma City Thunder, getting back the contract of Victor Oladipo and third-year forward Jeremiah Robinson-Earl. The move puts an end to a long investment and very rocky tenure with KPJ.
David Weiner joined Dave Hardisty on the ClutchFans podcast to discuss the Porter Jr. Experiment, the price paid to move him, Houston’s potential trade options moving forward, the new culture and the current state of the Rockets young core.