The current version of this article contains a minor change as of May 30, 2013.
Back on December 23, I made my first formal attempt at explaining the intricacies of the NBA player contract of Chandler Parsons. As a mere fan (and not an actual NBA insider or team executive), I based that piece on educated conclusions using the information available to me at the time. Unfortunately, only after putting out my prior article was I made aware of additional information that greatly impacts the overall analysis of Parsons’s contract. Hence, the following is a (more informed) analysis of one of the more interesting player contracts in the NBA today.
Parsons Not Subject to Rookie Scale Salary Rules
The NBA has specific rules governing first round draft picks and the contracts they can sign, commonly referred to as rookie scale contracts. Such contracts are four-year deals, fully guaranteed for the first two years, with team options for each of the third and fourth years (each of which must be exercised almost an entire season in advance) and a right of first refusal after that.
However, Parsons was not a first round pick. He was selected in the second round (the 38th overall selection) of the 2011 NBA Draft. Therefore, he is not subject to such rules. Second round picks can be signed to contracts much like any other player. Unlike first rounders, second rounders do not have any scale salary by which a team may exceed the salary cap to sign them. Most second rounders receive either a one- or a two-year deal at the league minimum salary. Such contracts are oftentimes non- or only partially guaranteed. The only ways in which a team may sign a second round pick to anything more are for that team to have either cap room or a salary cap exception (such as the Mid-Level Exception) at its disposal.
The Contract Structure
In December 2011, the Rockets signed Parsons to a four-year, $3,629,500 contract (using a sliver of remaining salary cap room they had at the time). Like the contracts previously given to Jermaine Taylor and Chase Budinger, Parsons agreed to bind himself to the team for four years in exchange for an increased salary in the first year ($850,000 instead of the league minimum of $473,604) and second year ($888,250 instead of the league minimum $762,195), both of which are fully guaranteed.
However, Parsons seems to have had a better agent than either Taylor or Budinger.
Whereas Taylor and Budinger agreed to give the Rockets fully non-guaranteed Years 3 and 4 (together with a team option on Year 4), Parsons and his agent negotiated for additional financial security. By Parsons having not been waived by the Rockets before January 1, 2013, Parsons’s salary for the 2013-14 season ($926,500) became partially guaranteed for $600,000; and if Parsons is not waived by June 30, 2013, his 2013-14 salary becomes fully guaranteed. Furthermore, if the Rockets do not waive Parsons by January 1, 2014, his salary for the 2014-15 season ($964,750) becomes partially guaranteed for $624,771 (the same percentage partial guarantee as in Year 3); and if Parsons is not waived by June 30, 2014, his 2014-15 salary becomes fully guaranteed.
The key bit of new information relating to the Parsons contract?
It also has a team option on Year 4.
This means that, despite having already guaranteed Parsons $624,771 for the 2014-15 season, the Rockets have the right to decline their team option, essentially “eat” that money, and make Parsons a restricted free agent. If the Rockets instead exercise that team option, then when his contract expires in 2015, Parsons will be an unrestricted free agent.
What Happens Next?
1. Parsons is “stuck” on this contract until at least 2014.
The Parsons Contract was negotiated at a time when it was not certain whether he would become a legit NBA player. At that time, this deal was quite a coup for both Parsons and his representatives. Now, however, with Parsons playing at a very high level, the contract may seem like a long-term (financial) prison sentence.
First off, there is little incentive for the Rockets to let Parsons out of his dirt-cheap deal. They have him locked up on a very favorable deal for this year and two more after that. For a team trying to manage its cap situation in order to add a second (or even third) star player, giving Parsons a raise before his contract is up in 2015 might jeopardize those plans.
And even if the Rockets wanted to give Parsons a raise before 2015, there really is no feasible way to do that without risking his departure to another team (with the possible exception of a renegotiation-and-extension, discussed below).
Since only Year 4 of Parsons’s deal is a team option (as per CBA rules, contracts can only contain one option year), there is no way to make Parsons a free agent before 2014 without waiving him. Unfortunately for the Rockets, Parsons is such a good player that there is no way he would clear waivers — other teams would be climbing over each other to get a chance to claim him off waivers. So, unless the Rockets want to give Chandler away to another team without receiving anything in exchange, they need to simply hold onto him on his current deal. At least through next season.
Rockets GM Daryl Morey even brings up — perhaps against his better judgment — that Parsons approached the team about restructuring his contract. See Zach Lowe’s interview with Morey here, and skip to the 16:40 mark.
2. An extension of Parsons’s contract is not a viable alternative.
Because Parsons is a veteran on a four-year deal (other than a first round draft pick on a rookie scale contract), he is technically eligible for an extension from the Rockets in 2014. Many fans have suggested that the Rockets give Parsons an extension in order to give him a substantial raise and keep him under contract beyond 2015. However, the rules governing contract extensions do not make this a financially feasible option for Parsons.
Under the CBA, a player may not receive an extension giving him a raise in excess of 107.5% of his salary in the last season of the contract being extended. For Parsons, an extension would cap his 2015-16 salary at $1,037,106. I’m guessing that Parsons (and his agent) feels that he can do better than that on the open market.
So, go ahead and cross the contract extension route off the list of possibilities, unless . . .
3. A contract renegotiation remains a possibility but is not in the team’s best interests.
While a contract extension is not economically feasible for Parsons, there remains the possibility of a contract renegotiation with a simultaneous extension. Only teams that are under the salary cap can renegotiate player contracts. For instance, the Oklahoma City Thunder implemented this “renegotiate-and-extend” approach with Nick Collison in 2010 (you can read more about that deal here). While the 2011 CBA changed the rules about these deals to limit the decrease in salary a player could accept in the first year of his extension to 40% (making Collison’s particular contract impossible to do now), the Rockets could still position themselves to keep Parsons locked up via a simultaneous renegotiation and extension.
However, this approach would seriously hamper the Rockets’ overall rebuilding strategy.
First of all, the Rockets would need to be under the cap during the 2014-15 season for this to even be possible. That would mean that the team likely failed in its attempts to acquire a second star player between now and then. It also means that the team did not even use its cap room during the summer of 2014 or at the February 2014 trade deadline to otherwise improve the team beyond 2014. Unless Parsons has developed into a bona fide perenniel All-Star caliber player by that time, there is little incentive to jeopardize the team’s cap situation — and its continued pursuit of that second star player — for the sake of locking up a good (but not great) player.
Also, even with a Collison-like contract in place, Parsons would have a relatively substantial cap figure locked in on the Rockets’ roster entering the summer of 2015, when the contracts of Jeremy Lin and Omer Asik are set to come off the books and the Rockets possibly positioned to add another significant piece to the puzzle.
4. Letting Parsons hit restricted free agency is risky but may be how team does right by him.
The renegotiation-and-extension route assumes that the Rockets do, in fact, pick up their team option on Parsons. However, if the Rockets (1) didn’t have the requisite cap room available to accomplish a renegotiate-and-extend deal, (2) felt that they could potentially lock up Parsons longer-term at a more reasonable cost through restricted free agency than if he hits unrestricted free agency in 2015 and/or (3) feared that Parsons would hold a grudge against the team if it kept him on his dirt-cheap deal for a fourth season, then they might opt to decline Parsons’s team option and allow him to hit restricted free agency in 2014.
Because Parsons would have been under the same contract with the Rockets for three seasons (2011-2014), the Rockets would have full Bird rights on Parsons and could exceed the salary cap to re-sign him to a five-year deal at any amount (up to a “James Harden-level” max contract). Presumably, this option would only be explored if the team had already used up most of its cap space to add a second star player or other significant pieces.
Making Parsons a restricted free agent would likely be a huge show of good faith on the Rockets’ part, but it would not be without great risk. Many of us remember what happened to the Cleveland Cavaliers back in 2004. The Cavs decided to do Carlos Boozer a solid and decline their cheap team option in order to make Boozer a restricted free agent, looking to lock him up long-term. Unfortunately, once Boozer became a free agent, the Utah Jazz swooped in with a huge contract offer. Boozer bolted Cleveland for greener pastures, and the Cavs were left holding the bag.
Also, from a pure numbers standpoint, it is unlikely that the Rockets could save enough money over the course of a new deal with Parsons signed in 2014 — either with Houston or in an offer sheet with another team — versus one he signs as an unrestricted free agent in 2015 to justify foregoing the opportunity to keep Parsons at his currently-scheduled $964,750 salary for 2014-15. Remember, if the Rockets decline their team option, Parsons would still pocket $624,771 from Houston (which would count against the cap) on top of whatever he could get in free agency.
However, if the Rockets are confident that Parsons would work with them on a reasonable long-term deal without bolting as a free agent, their show of good faith may be reciprocated, to everyone’s advantage.
5. Letting Parsons hit free agency in 2015 may best help the Rockets’ cap situation.
Notwithstanding the potential benefits above of taking care of Parsons in 2014, the fact that the Rockets (even with the addition of another significant piece in the next three years) might possibly have substantial salary cap room in 2015 means that there may be much to be gained by exercising that team option, keeping Parsons on his contract for a fourth season, and letting him hit unrestricted free agency in 2015.
Because of Parsons’s miniscule 2014-15 salary, his cap hold on the Rockets’ books when he hits free agency until he is signed (either by the Rockets or another team) will be a paltry $1,833,025.
This means that the Rockets could use all of its available cap room in 2015 — except for that $1,833,025 cap hold amount — to pursue a major free agent (such as Kevin Love, who can opt out of his contract with the Minnesota Timberwolves that summer), then later exceed the salary cap to re-sign Parsons to any amount using his Bird rights.
Admittedly, this approach will involve asking Parsons and his representatives to trust in the organization to do right by Parsons once the dust settles on the team’s other summer plans. This may be a tough task, given that the team will have already foregone the chance to do right by Parsons in 2014 by picking up its option on the fourth season. Parsons’s agent will certainly market his client around the league to gauge his “fair value” as a free agent, so numbers would likely be discussed while other plans play out.
Barring a trade, the Houston Rockets and Chandler Parsons are stuck with each other under his current contract until at least 2014. An apparent victory for the player at the time of its original execution, the contract is now one of the most team-friendly in the entire league. The Rockets have Parsons locked up until 2015 for a mere pittance. They also have the option to either make Parsons a restricted free agent in 2014 or keep him around for a fourth cheap year and let him hit unrestricted free agency in 2015. Parsons’s low salary (and his cap hold in the summer of 2015) will position the Rockets nicely to continue to add significant pieces over the next several years.
Mike D’Antoni: The Rockets isolation offense wasn’t pretty, but it was effective
Former Rockets coach Mike D’Antoni made an appearance on the Thinking Basketball podcast to discuss his career, and he went into his stretch with the Houston Rockets (2016-2020).
One of the big topics discussed was the isolation sets that the Rockets ran often and why they did it.
“If that one-on-one was not efficient, we wouldn’t do it,” said D’Antoni. “But it was doing, if I’m not mistaken, 1.2-something (points per possession) ridiculous. 1.16, for a long time, was the standard of the best offense an NBA team had. We kind of blew that out of the water a little bit (at) 1.20, but our isolation game was like 1.25, 1.24, so it was like — why wouldn’t we isolate?”
The former Rockets coach admitted it was not the most pleasing offense to the eye.
“People don’t like it,” said D’Antoni. “Aesthetically it’s not good. I don’t love it. I would rather pass the ball around. And if I had a team that didn’t have James Harden, guess what? We’d be passing the ball around… It wasn’t pretty. People can complain. But when you have the most efficient offense in NBA history, or close to it, why wouldn’t you do it? Just because you want to look pretty?”
D’Antoni talked about how good the Rockets second units were in the 2017-18 season because of Chris Paul, citing how often the Rockets boosted their lead or turned a deficit into an advantage when they turned to the bench.
“Chris was just a maestro at running our offense, and doing it a little bit (Steve) Nash-like,” said D’Antoni. “Harden had to do it like Harden did it, but both of them were good. Both of them were perfect.”
D’Antoni said part of the reason for the iso sets was he wanted to maximize James Harden and make him “the best player he can possibly be.”
“James is one of the smartest players — and there are a bunch of them — that I ever coached,” said D’Antoni. “I thought probably two or three years there, he had a complete mastery of the game. He went over 50 I don’t know how many times in a row. We were banged up one night and I said, ‘James, you might have to get 50 tonight for us to even have a chance to win.’ He gets 60 and we win. Stuff like that. He was able to do stuff (that)… just a mastery of the game.”
On how close the Rockets were to winning a title, said D’Antoni, “I thought we had it, the third year until Chris went down. Maybe not. Who knows, because Golden State had hearts of champions. Those guys are hard to beat. But I thought we had a good chance at it, that’s for sure.”
Why Alperen Sengun will come off the bench
With Bruno Fernando expected to start, here’s the plan for the Rockets second-year center
When the Rockets traded Christian Wood, it was crystal clear that Alperen Şengün was the new starting center for the Houston Rockets.
As we’re on the cusp of the Rockets 2022-23 season opener, there’s only one problem — he’s not.
Bruno Fernando is expected to get the starting nod at the five for the Rockets, leaving many to wonder why the second-year center out of Turkey is coming off the bench.
There are a couple reasons why.
First, the Rockets are trying to optimize their prospects, putting them each in the best position to succeed. In the case of Sengun, they want to leverage his passing skillset by making him an offensive hub. That’s difficult to do when you have ball-dominant guards in Jalen Green and Kevin Porter Jr., who thrive out of isolation and are trying to make progress leading pick-and-rolls.
Fernando is a much more limited player, but he fits better right now with the starters because he screens/rolls hard and plays above the rim as an alleyoop threat — it’s been fairly apparent in the preseason how the guards use him. While not a great defender, Fernando also is more of a rim protector than Sengun.
Secondly, Sengun needs to adapt more to the NBA game. The Rockets very much believe in his prospects — he’s only 20 years old — and they still consider him the best five on the roster. But the NBA is a much different game than EuroBasket, which is where he spent more of his offseason focus. The days of just dumping the ball into a post player seem to be dwindling in the NBA. He’s got to get quicker, stronger, tougher — but most important of all, he’s got to shoot the ball better from range.
In a culture where coming off the “bench” is considered a demerit (it shouldn’t be), you have to explain the reasons why — but keep in mind, his minutes will still be significant. I expect he will likely get in the 24-26 range this year, an increase over the 20.7 he got last season. He’s still going to have plenty of opportunity to develop.
My two cents: I give the Rockets props for doing this so early. It’s been apparent to me that the Rockets have multiple players who would be considered secondary playmakers, and to maximize their skills, they need the ball in their hands (imagine if the Rockets drafted Paolo Banchero … grateful every day that Jabari fell to #3!). This hopefully allows for that. Playing Sengun off the bench gives you an opportunity to play a variety of ways and also covers up a current deficiency at backup point guard.
I don’t want to watch Sengun follow the guards around — I want to watch peak Sengun running offensive sets.
Overall, I like it — let’s get the season going.
Rockets extend Kevin Porter Jr. to incredibly team-friendly deal
What’s being reported as a four-year, $82M extension is actually a one-year, $15.8M extension with full club control
Today was the deadline for the Rockets to extend Kevin Porter Jr. The Rockets have had an offer extended to KPJ for some time and the word behind the scenes was it was likely this day would come and go without a deal.
That changed in a hurry Monday morning.
The Rockets and KPJ agreed on a reported four-year, $82 million extension — at least, that was the initial report.
In truth, the deal is not that at all and is more the spin of an agent. Only the first year of the deal, at just $15.9 million, is guaranteed. The Rockets have until June 30, 2024 to decide if they want to pick up the two following years (2024-25 and 2025-26).
It’s clear KPJ accepted the Rockets longstanding offer because it is one extremely team-friendly deal.
What's being reported: KPJ signed a four-year, $82M deal extension.
What actually happened: KPJ signed a one-year, $15.8M extension.
Rockets have two years to watch KPJ's progress and decide if they want to pick up an additional two-year extension or not.
— ClutchFans (@clutchfans) October 17, 2022
“We value the player and the person that Scoot is becoming and are eager to invest in him and his journey,” said Rockets General Manager Rafael Stone. “He’s expressed how happy he is to be with this organization and has shown his commitment to putting in the work both on and off the court. We are excited for the opportunity to continue to build something special with him.”
In essence, the structure of this contract fully acknowledges the risks associated with betting on KPJ. It’s not the money you’re giving him — it’s the years. If you give him a long-term deal with fully guaranteed money and things go south, that is an unmovable contract — a cardinal sin to give out when your rebuild is going so phenomenally well after the drafting of Jalen Green and Jabari Smith Jr.
This deal reflects that risk and comes close to eliminating it. The Rockets control all the upside. If KPJ pans out beautifully, they can extend him — it’s 100% their decision. If he doesn’t pan out or the roster/core shifts in an unexpected way — such as being in position to draft Scoot Henderson — KPJ could be a large expiring contract next season.
The Rockets basically signed KPJ to the Sam Hinkie Special (contracts you saw with Chandler Parsons, Jae’Sean Tate and KJ Martin), but with much bigger dollar figures.
For KPJ’s part, there is a small win — he’s gets almost $16 million next season and is signed for this season ($3.2M) and next. He doesn’t have to worry about the finances as much while still staying highly motivated to play well. He didn’t fully bet on himself and take this to restricted free agency, but he did still take a deal that incentivizes him to earn it. But this deal isn’t in the same stratosphere as the ones you saw signed by Tyler Herro and Jordan Poole.
The bottom line: There are risks to signing KPJ that were mitigated by this unique contract structure. If you are a fan of the Rockets remaining flexible as they strive to build a contender, you should be thrilled with this. Big win for Stone and the Houston front office.
KJ Martin reportedly drawing interest on trade market
Rockets have had “ongoing talks” with Phoenix Suns about the third-year forward
According to Jake Fischer of Yahoo Sports, the Phoenix Suns have had “ongoing talks” about acquiring Rockets forward KJ Martin while Portland and Miami are “two other known teams with interest in Martin.”
There has been talk of trading KJ since before the summer when his father, former NBA All-Star Kenyon Martin, reportedly sought a trade for his son. With the Rockets holding multiple picks in the draft, it appeared the writing was on the wall for reduced minutes for KJ.
Martin has looked like a trusted member of Stephen Silas’ rotation so far in preseason. KJ has played in all three games, averaging 11.0 points and 4.0 rebounds in 26.0 minutes, hitting 5-11 from deep.
At the same time, Jabari Smith Jr. is the future, Jae’Sean Tate seems to be the coaching staff darling and Tari Eason has exploded onto the scene. Minutes for KJ could be available but they will be hard to come by.
If the Rockets are going to trade KJ, what should be the asking price? My feeling is a “good” second-round pick (one that could be expected to be in the 31-42 range) would be the goal. If the Rockets were offered a lottery-protected first-round pick, I think that would be a steal right now for Houston.
What could make more sense is if the Rockets combined KJ Martin with a player like Eric Gordon, especially given the goals of suitors like the Suns, Blazers and Heat.
Jabari Smith steals show in Rockets preseason opener
The Rockets rookie is legit as we take a look at what else stood out in Houston’s preseason rout of the Spurs
Finally, Rocketball is back — the Rockets destroyed the San Antonio Spurs 134-96 in the preseason opener Sunday night.
Granted, the Spurs look flat out terrible (the top contender for Wembanyama?) and may finish dead last (and it showed), but there were a number of things that played out in this game that should get Houston fans excited.
But before I get into that, I want to give a huge shout out to everyone who supported RocketsWatch Sunday night. We are watching and discussing Rockets games in realtime this season and the debut was overwhelming. There were over 700+ fans watching the game with Roosh Williams and I in what might be the largest online watch party ever for a Rockets game. The live reactions from the fans were priceless!
Let’s talk about what stood out in this game:
Jabari is the real deal
Going into Sunday night’s preseason opener for the Rockets, the biggest question on the minds of fans was simple — how will #3 overall pick Jabari Smith Jr. look in his first NBA action?
The answer is good. Really good.
Jabari threw down a dunk out of the gate and then locked in on high-energy defense on the other end and right away you knew — the Christian Wood Era was over. Jabari’s impact was immediate on both ends of the floor. Smith finished with 21 points on 8-15 shooting, including a blistering 5-8 from deep, to go with eight rebounds in 24 minutes.
Jabari described himself as “a lot more loose” than he was at Summer League, when he struggled to knock down his shots.
“It was easy,” said Jabari. “My teammates made it easy for me, finding me when I was open. The rest just came from knocking down shots, running the floor, trusting the offense and trusting my teammates.”
What most impressed me was how quick of a trigger Jabari had on the catch-and-shoot. He would receive a pass out of the post or a cross-court pass in the corner and would instantly let it fly, shooting easily over his defender’s reach. This trait stood out and was very Klay Thompson-esque. In the second half, Jabari hit a pull-up triple in transition (his fourth) that was very enticing, then absolutely slayed those of us in the RocketsWatch room when he took two long strides back from the free throw line to drain another triple.
At that point, it was official — the rookie was clowning the Spurs. I can’t tell you how thrilled I am that the Rockets drafted Jabari. This man is going to fit like a glove and will be a ridiculous two-way weapon for the Rockets long term.
Defense. They’re actually playing it. It’s true.
I don’t need to repeat that the Rockets were dead last in defense last year, but… the Rockets were dead last in defense last year. Although, maybe I need to turn that frown upside down.
Sunday, however, was a different animal and you could tell immediately. The Rockets were hustling, moving quickly on rotations and closeouts.
“It’s the defense, obviously, that we’ve been concentrating on,” said Stephen Silas. “Our help was good tonight. Our multiple efforts were really good… I’m super encouraged by our intensity on the defensive end.”
Jabari was a big part of that. He made some clear mistakes, sure — I’m not going to say he was perfect — but he seemed to set the tone. Still, it’s not just Jabari — it’s clear to me the mindset of this team is in stark contrast to what we’ve seen the past two seasons. Maybe it’s the Jabari Effect or maybe Lionel Hollins is making his presence felt, but this does not look like the 2021-22 Rockets on this side of the ball.
Tari Eason is pretty much plug-and-play
I had my doubts that Tari Eason would get a ton of run in this game, but Silas played him early (note: Jae’Sean Tate sat this game out). Without having any clear plays run for him, Tari fought and scrapped for 21 points and 10 rebounds (six offensive!) in just 21 minutes. He hit 9-13 from the floor.
“My mentality never changes,” said Eason. “I’m always going to be in the right spot, get after it defensively and be one of the hardest playing dudes on the court. I think that translates at any level and I’m just going to continue to do that.”
He plays like his hair is on fire and has tremendous potential as a two-way demon. Throw him out there when things get stagnant and he’s going to make things happen.
I’ve felt that the Rockets will likely bring Tari along slowly until they figure out what the long-term solution is for guys like KJ Martin, but Operation Patience isn’t going to work if he keeps putting up lines like this. You can’t keep him to the bench or send him to the G-League.
Is Bruno Fernando the backup center?
It sure seems that way. After news broke that the Rockets had signed Fernando to a four-year, nearly $11 million deal, Bruno was the first big off the bench, subbing in for Alperen Sengun.
I’ll be honest — this really surprised me. I expected that Usman Garuba would have the clear inside track to the spot. Fernando also seemed like a good bet to be on a two-way contract, but now with this new deal, Fernando is going to be on the 15-man roster and barring a trade, someone has to be cut (Boban? Favors?) that isn’t expected to be.
But Fernando, who sources say has been terrific in camp, showed why he got that contract, finishing 3-3 from the field and was a +18 in just 11 minutes. He was very effective on rolls, capping a pair of alleyoop passes from Kevin Porter Jr. I would be lying if I said I saw this coming, but it’s a welcome development.
It’s only one preseason game, but we still can draw a lot from how Silas sees the rotation.
Bruno looking like a good bet for the backup center role was not the only surprise. KJ Martin and Daishen Nix, along with Bruno, were the first subs of the night. That indicates what we expected, that Nix is in the lead for the backup PG spot over TyTy Washington, who I would guess will run the show with the RGV Vipers early on. I like TyTy as the better bet for this spot long term, but right now the job appears to be Nix’s to lose.
But KJ is a little surprising, given he reportedly wanted out this past offseason with the Rockets slated to bring in a couple bigger prospects (Jabari and Tari) at his position.
Garrison Mathews played only five minutes. The prediction many have made that Silas would play him 15+ minutes this year is not looking so hot.