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Houston Rockets Salary Cap Update: 2021 Post-Draft Edition

Breaking down the Houston Rockets complete salary cap situation as they finish the draft and head towards free agency

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Rafael Stone Houston Rockets general manager

Well, … it’s been a while.

Since my last Salary Cap Update, the Houston Rockets re-structured their team (and mortgaged part of their future) for Russell Westbrook and then – after a one-year failed experiment – blew it all up by trading Westbrook, P.J. Tucker and franchise cornerstone James Harden.

What was left was a hodgepodge of veterans and a few intriguing young players that stumbled to the league’s worst record in 2020-21 (17-55). But with a little lottery luck, the Rockets dodged a potentially disastrous pick swap with the Oklahoma City Thunder and landed the #2 overall pick in the 2021 NBA Draft.

On Thursday night, Houston drafted Jalen Green (#2), Alperen Sengun (#16), Usman Garuba (#23) and Josh Christopher (#24). The whopping FOUR first round picks were largely the product of a series of trades negotiated by Rockets GM Rafael Stone and his front office.

So, with the draft now over, let’s take a look at the Rockets’ cap situation heading into free agency.

Player Salary, Exceptions and Available Cap Room

The Houston Rockets currently have the following player salary commitments, cap holds and salary cap exceptions available for the 2020-21 season (assuming that the league’s current projection of a $112.4 million salary cap is accurate and that the rookies all get 120% of their rookie scale salaries):

Player salary commitments: John Wall ($44.3 million), Eric Gordon (18.2 million), Christian Wood ($13.7 million), Green ($9.0 million), D.J. Augustin ($7.0 million), Danuel House ($3.9 million), Sengun ($3.2 million), Garuba ($2.4 million), Christopher ($2.3 million), Kevin Porter, Jr. ($1.8 million), Khyri Thomas ($1.8 million, non-guaranteed), Jae’Sean Tate ($1.5 million, non-guaranteed), K.J. Martin ($1.5 million, expected to be guaranteed shortly after this publishes) and the long-since-waived Troy Williams ($122,741, like clockwork).

Cap holds: Kelly Olynyk ($18.9 million – Rockets hold full Bird rights), Dante Exum ($18.2 million – Rockets hold full Bird rights), D.J. Wilson (potential restricted free agent; $13.6 million – Rockets hold full Bird rights), Avery Bradley ($5.9 million team option; $11.2 million cap hold if option is not exercised – Rockets hold Early Bird rights), David Nwaba ($1.7 million – Rockets hold Early Bird rights), Sterling Brown ($1.7 million – Rockets only have Non-Bird rights), Armoni Brooks (potential restricted free agent; $1.5 million – coming off a two-way contract) and Anthony Lamb (potential restricted free agent – coming off a two-way contract).

Other Salary Cap Exceptions: If Houston operates over the salary cap this summer (extremely likely), the Rockets will have access to the Non-Taxpayer Mid-Level Exception (NT-MLE, expected to be around $9.5 million, the use of which would impose a hard cap at the “apron” level – currently projected at about $136.6 million). Although it would also impose a hard cap at the apron level, Houston could possibly use the Bi-Annual Exception (BAE, expected to be around $3.7 million), since they did not use it last summer. In the unlikely event that the Rockets use cap room this summer, they could instead have the Room Exception of around $4.9 million at their disposal. Assuming they operate over the salary cap, the Rockets will also have a few traded player exceptions (TPEs) left over from earlier trades, most notably for $8.2 million (from the Victor Oladipo trade) and $5.0 million (left over from the Harden trade).

Given their salary commitments, Bird rights to their free agents and additional cap exceptions available to them, the Rockets should operate over the cap for the 2021-22 season. Barring trades (or cheaping out on the rookie scale contracts), the Rockets could only create around $4 million in cap room in the alternative.

Preliminary Internal Decisions

KJ Martin Ahead of the NBA’s free agent season, Stone and his team will need to address some internal matters.

Most immediately, Houston needs to decide whether to extend qualifying offers to its younger free agents. The largest qualifying offer would go to Wilson, but given the prohibitive amount ($6.4 million), it is unlikely they will give him one. They will still retain his Bird rights, however.

The Rockets can make each of Brooks and Lamb – coming off a two-way contract – a restricted free agent by extending him another two-way contract for next year (with $50,000 guaranteed) as a qualifying offer. Given their relative performances last season, it seems more likely that Brooks would receive a qualifying offer than Lamb.

The Rockets also need to decide whether to fully guarantee Martin’s salary for the coming season. As noted above – and given his terrific play last season – this one is a no-brainer.

Lastly, the Rockets need to decide whether to exercise their team option on Bradley. Given his less-than-stellar play last season, that option will likely go unexercised.

Internal Free Agent Decisions

Houston will have some decisions to make with their own free agents heading into August, including how to prioritize which free agents to bring back.

Kelly Olynyk Kelly Olynyk: Olynyk shocked most Rockets fans when he played at a near All-Star caliber level after arriving in the much-maligned Oladipo trade. He should be one of the more coveted free agent big men this summer. However, in today’s NBA landscape, non-elite big men are not necessarily commanding top-dollar. If a playoff contender isn’t offering Olynyk more than the NT-MLE, Houston may be able to retain him on a short-term (one- or two-year) deal at a premium. Figure something in the $12 million to $16 million range per season, possibly even more.

David Nwaba: In one of his final roster moves as Rockets GM, Daryl Morey (probably with input from Stone) signed a then-injured Nwaba to a two-year deal, likely envisioning the very scenario that the Rockets face now. Because he was signed to a two-year deal, Houston retains Early Bird rights to Nwaba and is able to offer him a multi-year deal in the $10 million per season range. While Nwaba played extremely well for the Rockets before injuries forced him to shut down his season, it is unlikely that he will command that much on the open market. Still, at least one smart GM of a playoff contender should make Nwaba a competitive offer this summer. And given the Rockets’ recent glut of guards/wings, it appears less likely now that Houston will have room on the roster for Nwaba.

Sterling Brown: Brown ended up being a terrific value for the Rockets, playing on a one-year veteran’s minimum deal. He shot the ball well from 3-point range and displayed some ballhandling and defensive skill. However, between the glut of guards on Houston’s roster, the Rockets’ lack of meaningful Bird rights and his obvious appeal to playoff teams as a nice bench addition, it seems likely that Brown will not return. Expect Brown to get offers in excess of the veteran’s minimum.

Avery Bradley: Bradley never found his shooting touch in Houston after coming over in the Oladipo trade. It is highly unlikely his team option will be picked up or that the Rockets will make him a serious offer in free agency. He is expected to latch on with a contender, perhaps on a veteran’s minimum deal or for the BAE.

D.J. Wilson: While not expected to receive a qualifying offer, Wilson did show some flashes of why the Milwaukee Bucks used a first-round pick on him four years ago. Depending on what other roster moves the Rockets make this summer, the door may be open for Wilson to return, albeit likely on a veteran’s minimum deal.

Dante Exum: Much to this author’s chagrin, Exum never played a minute for the Rockets after coming over as salary filler in the Harden trade. Once a highly-touted lottery pick, Exum has been ravaged by injuries in his career and relegated to being a defensive stopper on the perimeter rather than the star he was supposed to be. While he may still have enough intriguing skills to entice the Rockets to want him back, that prospect seems unlikely at this point.

Armoni Brooks and Anthony Lamb: As noted above, Brooks has a chance to receive a qualifying offer, while Lamb probably won’t. Depending on their performance in summer league, one or both could receive a training camp invite in September. Their prospects remain cloudy.

Michael Frazier: Believe it or not, the Rockets still retain Frazier’s free agent rights. Houston had to renounce all their other “old” free agent rights in order to complete the Tucker trade in a cap-favorable manner, but Frazier’s cap hold was negligible and could be kept on the books. That said, don’t expect him to make a triumphant return to Houston.

Sergio Llull Issuf Sanon (a/k/a the Sergio Llull Memorial Draft Rights Held Spot): You didn’t think this author would allow a Salary Cap Update to go by without a Llull reference, did you? While Llull’s draft rights now sit with the New York Knicks, they received the draft rights to Sanon in that same trade. Admittedly, Sanon’s game is fairly unremarkable, so his prospects of being a Houston Rocket are slim.

Outside Free Agents

Unlike in prior offseasons during the Harden Era, Houston is unlikely to be an attractive destination for many of the league’s veteran free agents. With only the NT-MLE to offer, the Rockets won’t be able to afford any of the top free agents, nor will they be able to compete with comparable offers from playoff contenders. Most likely, the best players to agree to sign in Houston would probably be on overpays, something that seems antithetical to the Rockets’ current philosophy.

While it seemed likely a week ago that the Rockets would have at least one frontcourt opening to fill in free agency, the drafting of Sengun and Garuba – both of whom should receive frontcourt minutes next season along with Martin – and the fit of bringing back Olynyk (who is probably better than any outside free agent willing to sign in Houston this summer) now make it less likely that such a signing is needed. But for argument’s sake, the Rockets could possibly have interest in a player like JaMychal Green if he can’t come to terms with the Denver Nuggets on a new deal.

Like in recent years’ past, it may be good practice for the Rockets to hold onto at least a portion of their NT-MLE in order to either play the buyout market or sign a young free agent to a multi-year deal (as they did with Thomas this past season).

This author will leave it to others (or at least won’t cover it here) as to which particular free agents the Rockets will pursue this summer.

The Taxman Won’t Cometh

With the trade of Harden also went any chance of Rockets owner Tilman Fertitta paying any luxury tax for the foreseeable future. Contrary to popular belief, this author is still convinced that Fertitta would have been willing to pay the tax had the Harden-Westbrook pairing been more successful in 2019-20. But alas, it was not and he did not.

Barring any trades or free agent signings, and assuming that Bradley’s option is declined and the rookies get 120% of their rookie scale, the Houston Rockets should have around $25 million in room below the luxury tax threshold to spend next season. (Keep in mind, however, that the Rockets are still limited on what they can offer outside free agents in an outright signing to the NT-MLE amount.) But Houston already has 13 players on its roster, and with two-way players once again allowed to stay with their NBA teams all season, it is quite possible the Rockets will only carry 14 players on their 15-man roster for much of the season. If they re-sign Olynyk, that’s 14 players.

One possible strategy for a team hoping to develop its young core with as many minutes as possible is to keep that 15th roster spot open for future trades, utilizing its TPEs to take on other teams’ unwanted salary for the price of future draft picks.

While this article primarily focuses on the 2021 offseason, there is a chance that the Rockets could open up a massive amount of cap room in the summer of 2023, when Wall and Gordon come off the books. Hence, any dead money taken on in trades this summer should probably not extend beyond 2023. But 2023 plans are a topic for another article.

Conclusion

After blowing up a contender, the Houston Rockets now find themselves picking up the pieces. While they found a few pieces last season and just added up to four more (including Green, the biggest piece of all), there is still much work to do. Armed with cap exceptions, TPEs and a treasure trove of future picks, the Rockets should be able to further bolster their roster in the coming years to create another contender.

Until then, we wait.

Wait, and enjoy the ride.

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Podcast: Houston Rockets options with the #3 pick of the 2024 NBA Draft

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Houston Rockets 2024 NBA Draft prospects Zaccharie Risacher Stephon Castle Reed Sheppard Donovan Clingan

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.


CLUTCHFANS PODCAST: SPOTIFY | APPLE

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Podcast: Steven Adams, Mikal Bridges and Trade Possibilities for the Rockets

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Houston Rockets Trade Deadline 2024

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.


CLUTCHFANS PODCAST: SPOTIFY | APPLE

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Rockets trade for center Steven Adams

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Steven Adams Houston Rockets

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.

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On the KPJ trade and future of the Rockets

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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.

ClutchFans Podcast: On Apple | Spotify

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Heavy investment in Kevin Porter Jr raises serious questions about Rockets front office

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Kevin Porter Jr. Rafael Stone

Soon-to-be-ex Rockets guard Kevin Porter Jr was arrested last week for allegedly assaulting his girlfriend, resulting in a fractured neck vertebra and a deep gash above her right eye after an attack at a hotel in New York. He allegedly woke her up by punching her repeatedly, strangled her and did not stop hitting her until she ran out of the hotel room screaming for help and covered in blood.

“This is a serious domestic violence case,” said assistant Manhattan district attorney Mirah Curzer.

First and foremost, I wish the victim healing. I don’t know what to say about the nightmare she went through. She and her family will forever be impacted. As for KPJ, if this is true, he doesn’t belong on the Rockets or in the NBA at all. He belongs in jail.

Secondly, this can’t be overlooked and just swept under the rug: Why did the Houston Rockets bank on and invest so heavily in this guy?

Kevin Porter Jr. being accused of crimes of this severity should not be shocking – at all. Before he even came to the Rockets, he had a long list of serious problems. He was suspended multiple times in high school. In 2019, he had a “conduct issue” significant enough that USC suspended the 5-star recruit indefinitely. He fell to the end of the first round of the 2019 NBA Draft because of his behavior liability. He was accused of punching a woman in the face in Cleveland. He also had a gun and marijuana charge later dismissed after getting into a car crash. He went into a tirade and got into a nasty confrontation with both the Cleveland coach and GM, resulting in the Cavs severing ties immediately and dumping him to the Rockets for nothing.

You could make the argument that initially giving Porter Jr. a second chance in Houston was praiseworthy, but the Rockets experienced KPJ’s anger management and immaturity issues firsthand on several occasions.

Former Rocket Austin Rivers said this week that this isn’t the first, second or even seventh issue with Porter Jr. and that Rockets “higher-ups” confided in him that they had no idea how to handle him.

“I remember talking to guys in the Houston Rockets organization, higher-ups, [and] they were having issues then,” said Rivers. “They were like, ‘We don’t know what to do with him.’ And that’s when he just got there from Cleveland!”

Porter Jr. was routinely a nightmare for Rockets coaches to deal with. On several occasions, he confronted and cussed out members of the coaching staff, saying they didn’t have the “credentials”, per source, a reference to the fact that him playing heavy minutes at point guard was a decision they did not control.

Once at a night out, Porter Jr. had a disagreement with a DJ over music choice and he snapped, smashing the DJ’s laptop to the floor. He needed to be restrained and removed. Rockets personnel and several of Porter’s teammates witnessed the incident.

Curzer also dropped a bombshell at the arraignment in saying that Porter Jr. has a history of abusing his girlfriend, who he had only been dating since early last year, his second season with the Rockets. Curzer specifically cited an incident in which KPJ allegedly rammed his car into hers.

There were dozens of maturity issues visible on the court to anyone paying attention. He refused to check out of games. He got into an argument on the bench with assistant Lionel Hollins. On numerous occasions, he would visibly shut down when he wasn’t passed the ball. I invite you to watch this video from a game against Memphis on March 20, 2022. Just listen to the Grizzlies broadcasters, particularly starting at the 1:40 mark, talk about what they are witnessing here:



Privately, people around the league would say they were baffled by the Rockets continued fascination with Porter Jr. Nobody could understand it.

That fascination starts with Rockets general manager Rafael Stone, who by every account over the last two years was the driving force behind the investment in Porter Jr. It has been no secret. Trading for him in January 2021 was seen by some with the team as his “Harden acquisition”, code for a signature move that makes an executive’s career, much in the way landing James Harden did for Daryl Morey in 2012.

For example, former Rockets head coach Stephen Silas never considered Porter Jr. to be a point guard, per sources — playing him there was a Stone mandate because the GM believed that is where his future lied.

John Wall also told us as much publicly when he explained the phone call he got from Silas about coming off the bench. He said Silas told him “This is what the GM wants,” adding again that Silas said, “Man, you don’t deserve that. You should be the starter. This is just what they want to do.” Wall was upset because he believed KPJ should have to earn the spot.

“I have a hard time finding anybody outside of the Rockets front office that believes that Kevin Porter Jr. is a starting point guard in the NBA,” said ESPN reporter Tim MacMahon in December.

There were plenty of warning signs about KPJ to the public too.

After Porter Jr. got into a heated argument in which KPJ “physically shoved” Rockets assistant coach John Lucas and quit on the team in the middle of a game against Denver in January of 2022, leaving the arena at halftime, Sports Illustrated’s Chris Mannix famously wrote that the Rockets should “Cut Porter Jr. Waive him. Release him. Whatever. Eat what’s left of the $1.8 million he’s owed this season and the $3.2 million he’s got next and move on.” It became a source of mockery for Porter Jr’s fans, a line they would bring up after each game he hit a few threes or handed out some assists.

In February of this year, ESPN’s Jonathan Givony, one of the most connected reporters in the league, flat out warned us that he was hearing awful things about the Rockets culture and locker room. He was blunt in what the Rockets needed to do — waive Kevin Porter Jr. outright and bring in a new coach and GM.

“Just cut him. That’s it,” said Givony of Porter Jr. “And you’re sending a signal to the league that we’re going to do things differently from here on out.”

“When you talk to people around the NBA about Houston, you just don’t hear good things about their culture, about that locker room. You talk to people that are on that team, and they are like, ‘We are a mess’,” said Givony. “Do people want to work with this organization? But you can change that fairly quickly if you come in, get rid of the bad apples and you change the coaching staff, and all of a sudden, you’re Houston. It’s the third-biggest city in America. There’s a history here of you actually being good.”

Porter came to the Rockets for “free” (in exchange for a top-55 protected second-round pick, which was designed not to convey), but he proved far from it as the Rockets continued to pour investment into him. Over the last 2-3 seasons, no Rockets player got more developmental capital than Porter Jr. – not Jalen Green, not Alperen Sengun, not Jabari Smith Jr. The Fertittas paid John Wall $85+ million over two years to sit at home so the team could groom Porter Jr. to be their future point guard.

Then they doubled down. With restricted free agency on the horizon and a seemingly non-existent market for KPJ’s services, the Rockets gave Porter Jr. an extension a year sooner – a contract that was presented as a four-year, $82.5 million deal. The deal was more team-friendly than that, putting team options in it after years 1 and 3. Going from the potential disaster that was initially reported to a deal they could escape after one season felt like a “win”, but the biggest question was why they wanted him long-term at all. The unprecedented nature of a contract that size with that kind of club control clearly showed the Rockets knew there was unique and significant risk here.

After KPJ signed the extension, The Athletic’s Kelly Iko summarized the Rockets view of Porter Jr. – “As has been [their] stance for months, the Rockets have maintained the notion that Porter is a priority and is considered a huge part of their core, along with Green and Jabari Smith Jr.”

The Rockets actions to kick off the 2022-23 season showed exactly that – that he was a priority. They benched Sengun to start the season, in large part to give KPJ a “lob threat” and defender in the starting lineup. They gave him the superstar “Harden Locker”. They introduced him last in the starting lineups. They treated him as the star and empowered him to be the self-proclaimed “Head Honcho” of Clutch City.

But the extension proved unwise and foolish. Porter Jr. never even made it to the first year of it. With over $80 million on the line, he snapped again. The Rockets signed him to one of the team-friendliest deals ever and still managed to both overcommit and overpay as Stone now scrambles to attach real assets to it to get another team to take it off his books.

Is it fair to question the judgment of the Rockets front office? Absolutely and without question. Whether you look at their ability to value character, evaluate risk, scout basketball, build culture, manage assets or allocate development resources, they failed at every level here. Why didn’t they act sooner? Why did they double down? Why didn’t they hold him accountable? Why did everybody in the league see it but them?

“We value the player and the person that [Kevin Porter Jr.] is becoming and are eager to invest in him and his journey,” said Stone after rewarding him with the extension less than a year ago.

The question you have to ask yourself now is, with all they knew and witnessed about Porter Jr. both on and off the court — why were they eager at all?

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