What other free agents, then, should the Rockets pursue this summer?

The answer:  Probably no one.

Not now.  Not this summer.

The Hand They've Been Dealt
Houston returns a squad that went 42-40 last season without Yao Ming.  Presently on track with his recovery, Yao is expected to be ready for training camp in October and should provide much-needed size in the middle for the Rockets.  While most do not expect him to return to full 20/10 form next season (at least not until around March, at the earliest), it is reasonable to assume that Yao should be able to log about 25-28 quality minutes per game in the regular season and still put up numbers better than most NBA centers.

The addition of Yao, plus having a training camp and full season of Kevin Martin, should be enough to make the Rockets a legitimate playoff contender, albeit not a championship contender.  Add to this the continued development of the Rockets' young players from last season, including Aaron Brooks (25), Trevor Ariza (24), Jermaine Taylor (23), Chase Budinger (22) and Jordan Hill (22).  The addition of Patrick Patterson with the 14th pick in the 2010 NBA Draft will further bolster a now deep Rockets front line.  And it is quite apparent that the Rockets will look to retain the services of their two key restricted free agents, Luis Scola and Kyle Lowry.

The stakes have been raised, but Daryl Morey isn't likely to make a panic move

So, why stop there?  Why not add one or two more players via sign-and-trade?  Or why not use the Mid-Level Exception (MLE), which has now been set for next season at $5.765 million?

Here's why - Salary Cap Flexibility.

Daryl Morey is nothing if not calculating.  In a good way.  Much like any Grand Champion chess master, he is constantly thinking several moves ahead, trying to determine what other teams may do and what the Rockets must do in order to position themselves to take advantage of those teams' situations.

This was displayed beautifully this past February when Morey plundered the Knicks of virtually all of their remaining assets in exchange for taking back the cap-clogging (yet hardly franchise-killing) contract of Jared Jeffries, all while maneuvering the team below the luxury tax threshold.  If a textbook in General Managing 101 is ever written, this Rockets trade will likely make an appearance in it.

Morey foresaw that the Rockets were never going to have enough salary cap room to compete for the major free agents.  So instead, he opted to bulk up on assets in order to make the Rockets a more attractive partner in sign-and-trade deals.  While this approach ultimately did not successfully lure Bosh to Houston, it put the Rockets in a substantially better position to have done so.

So, what now?

Here are some avenues by which the Rockets could make themselves significantly better:

Upgrade This Summer Via Trade
With most of the top-tier free agents already off the board, it makes little sense for the Rockets to pursue a sign-and-trade deal for a lesser free agent.  For example, there are very few (if any) free agent power forwards still on the market that would provide the team with much of an upgrade over Scola.  And none of them would come at the bargain price that Scola likely will as a restricted free agent.  Generally speaking, there are really no remaining free agents deserving of the package of assets the Rockets were willing to give Toronto in a sign-and-trade deal.  And as I mention in more detail below, signing a player to a large new contract may have salary cap ramifications next summer.

Therefore, a straight-up trade may be the best way to go.  The Rockets still have as many quality trade assets as almost any team in the league, so they could be players in the trade market this summer. Heck, the team had a deal in place that would have brought in Tyson Chandler without even having to give up any of the more coveted assets (likely just non-rotation players); but unfortunately, the deal fell apart at the last minute.

However, unless there is a trade this summer that can net Houston a true star player, the Rockets may be best served to largely sit out this summer and ...

Wait Until The Trade Deadline
Despite all the hoopla from the Rockets about pursuing a star player this summer, Morey has gone on record as saying that the odds of actually landing such a star this summer were not extraordinarily favorable and (and this is the key) ... that the Rockets would perhaps be in a better position to acquire a significant player around the trade deadline next February.

Teams like Indiana aren't just going to give away their stars like Danny Granger, but he and others could go on the market

Last season, the Rockets had an asset in Carl Landry who was able to net the team a legitimate borderline All-Star at a position of need in Martin.  This coming season, the Rockets possess far more assets than they have had in prior years.  Some of these assets may even prove more valuable to other teams than Landry did to Sacramento.

While many fans tend to overvalue expiring contracts, come February, the rather sizable expiring contracts of Shane Battier ($7.43 million) and Jeffries ($6.88 million) will have significantly more value to other teams than they will this summer, since those teams would only be on the hook for a couple of months of actual salary obligations to those players.  Plus, with the addition of up to $3 million in cash (the maximum allowable in any trade), Les Alexander could much more easily cover the two months' worth of salary for the other team.

Teams like New Orleans (with Chris Paul), Denver (with Carmelo Anthony) and Indiana (with Danny Granger) might not be willing to trade their star players right now.  But if things don't play out well for these franchises over the next six to eight months, circumstances may change.  There have already been reports out (although take them with a heaping serving of salt) that such players might be available via trade.  The likelihood of them being traded this summer is very small.

But come next February?  If the Hornets are fading out of the playoff picture and Paul starts getting restless with the financially troubled organization?  If Denver is unable to extend Anthony's contract this summer and is terrified of suffering next summer the same fate as Cleveland just suffered?  If Indiana finally comes to the realization that it needs to completely start over and get out from under Granger's long-term contract?

Then.  Then, things get very interesting for an opportunistic team like the Rockets.

Maximize 2011 Cap Room
As the Rockets' roster currently stands, the team could have a sizable amount of salary cap room available next summer, depending on how the new collective bargaining agreement shapes up.  Potentially, three of the Rockets' four largest contracts (those of Yao, Battier and Jeffries) could be coming off the books completely, although in Yao's case probably only if he clearly shows that he is incapable of playing NBA basketball at a high level.  Other moderately sized contracts, such as those of David Andersen and Chuck Hayes, will also be ending (actually, Andersen has a partial guarantee for 2011-12 in the amount of a "mere" $185,185).  Brooks will probably be due for a substantial pay raise next summer, but his "cap hold" will only be about $6.05 million until he signs a new deal.

Right now, it is far too early to tell exactly how much cap room the Rockets expect to have in the summer of 2011.  With a new collective bargaining agreement looming, there is no telling how the salary cap will even be calculated for the 2011-12 season.  Also, the team does not appear close to agreeing on new deals with Scola and Lowry, and the new salaries for those two will largely determine the Rockets' cap situation.  Plus, as mentioned above, there are several trade avenues the Rockets may explore this summer in an effort to upgrade (or even just to re-balance) their roster.  Lastly, and of tremendous significance, the Rockets still have their MLE to spend.  But as I alluded to above, such an expenditure could prove costly to Mr. Alexander and the Rockets, in more ways than one.

First off, with the Rockets deciding to pick up the team option on Hayes and likely matching any (reasonable) offers for Scola and Lowry, the 2010-11 season will mark the first in which the Rockets owner will be paying the luxury tax.  Unlike in years past, when the team hovered slightly above the tax threshold, only to get under with a clever maneuver at the trade deadline, the Rockets will likely be over the threshold next season by a sufficient enough margin to make it much more difficult to avoid the tax, even with the recently announced higher tax threshold.  However, Alexander knew this already and has committed to go "all in" this year in order to improve the team.  After collecting a nice amount in insurance proceeds on the contracts of Yao and Tracy McGrady, that only seems fair to Houston fans.

This means that any use of the MLE will cost Alexander double.  What may appear to be a "cheap" signing of a player to a deal with a starting salary of $3 million using a portion of the MLE will in fact cost the Rockets at least $6 million.  A full MLE deal will cost the team $11.53 million next season.  Is a Brad Miller or a Ronnie Brewer really worth that much to the Rockets?  Probably not.

Second, unless the Rockets can convince an aging veteran like Miller to only take a one-year deal, any use of the MLE will cut into the Rockets' 2011 salary cap space.  Without having added a clear superstar this summer, Morey may not want to hamper the team's chances of pursuing a star next summer (in what is admittedly a far less star-studded free agent class) by adding another role player this summer.

Even if the Rockets do not have enough cap room going into next summer to add a maximum salary player, there are certainly ways of opening up such room.  As we have seen the Heat and the Bulls do recently, trades can be made to shed salary at the cost of a draft pick.  Also, since most big-time players want to be paid via sign-and-trade, the Rockets can always agree to send back a smaller salary (say, Hill or Patterson) to the player's former team in such a deal.  Unlike this summer, the Rockets will not be constrained by having to match salaries within the "125% plus $100,000" rule.  They will have far greater flexibility.

And flexibility is the key.

With guys like Drew Gooden, Amir Johnson and Travis Outlaw all getting bloated contracts, the Rockets may be best served to sit out free agency (for the most part) and allow other teams to saddle themselves with contracts that they will regret handing out in a few years, if not sooner.

Conclusion
While striking out on obtaining Bosh may sting a little right now for many, it is by no means a sign that the Houston Rockets are doomed.  Far from it.  There are still several trade possibilities for the team, both this summer and beyond.  The Rockets can bide their time, see what other players become available over the next six to eight months and make a deal next February.  Or they can wait until next summer and have far greater options available to them with the potentially substantial salary cap room they could have.

In other words, they can sit tight and play the hand they were dealt.

And it's a pretty good hand.

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