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Houston Rockets Salary Cap Update

With July 1’s arrival, David Weiner takes a look at the Rockets’ salary cap situation as Houston delivers their free agent pitch to Dwight Howard.

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Goodbye, June. Hello, July.

It’s been an exciting few months since my last cap update. The Houston Rockets advanced to the NBA playoffs for the first time since 2009, ultimately losing to the Oklahoma City Thunder in a thrilling six-game series. Almost as importantly, the Rockets have once again grabbed the attention of a national audience, both with their play (led by budding superstar James Harden) and with their much-ballyhooed pursuit of now-unrestricted free agent Dwight Howard.

With that in mind, let’s take a look at the team’s current salary cap situation.

The Rockets’ Latest Moves
Since my last update, the Rockets have made the following roster moves:

  • Signed center Tim Ohlbrecht to a three-year non-guaranteed deal.
  • Signed guard Aaron Brooks to a two-year deal, with the second season being non-guaranteed.
  • Waived Tyler Honeycutt, electing not to “stretch” his $100,000 partial guarantee, meaning that Honeycutt will count $100,000 against the Rockets’ team salary in 2013-14.
  • Drafted Murray State guard Isaiah Canaan with the 34th pick of the 2013 NBA Draft.  As a second round pick, Canaan will not count against the Rockets’ team salary until he signs a contract.
  • Reportedly signed Tennessee State forward Robert Covington to a two-year partially guaranteed deal.  The deal is presumably at the rookie minimum ($490,180), with approximately $150,000 of that being guaranteed.
  • Declined their option on the contract of Francisco Garcia (for $6.4 million).
  • Waived Carlos Delfino ($3 million) and Brooks ($2.508 million), neither of whose contracts were guaranteed.
  • By not waiving him, fully guaranteed the whopping $926,500 salary of Chandler Parsons for the 2013-14 season.
  • Agreed in principle to trade Thomas Robinson to the Portland Trailblazers in exchange for two future second round picks and the draft rights to Kostas Papanikolaou (6-8 small forward from Greece, 48th pick of 2012 Draft) and Marko Todorovic (6-11 center from Montenegro, 45th pick of 2013 Draft)
  • Elected not to spend the remaining $2.1 million of their 2012-13 Maximum Annual Cash Limit (which represents the aggregate amount of cash that a team can include in all trades combined over the course of a season).  The Maximum Annual Cash Limit for 2013-14 will be $3.2 million.

Salary Commitments and Available Cap Room

Thomas Robinson

“Thomas, we hardly knew you.”

(All salaries courtesy of ShamSports.com.)

Barring any further roster moves, and assuming a maximum team salary cap of $58.5 million (which is the rough estimate according to the latest league projections but will be clarified by July 10), the Houston Rockets now have just over $40.11 million in team salary committed for the 2013-14 season: Harden ($13.78 million . . . approximately – more on that here), Jeremy Lin ($8.37 million), Omer Asik ($8.37 million), Royce White ($1.72 million), Terrence Jones ($1.55 million), Donatas Motiejunas ($1.42 million), Parsons ($926,250), James Anderson ($916,099), Greg Smith ($884,293), Patrick Beverley ($788,872), Ohlbrecht ($788,872), Covington ($490,180), and Honeycutt (waived – $100,000 partial guarantee).  (Technically, Robinson’s $3.52 million salary is still on the books until the trade with Portland can be consummated on July 10, but he’s off the books for all intents and purposes.)  Add it all up, and the Rockets currently have salary cap room in the maximum amount of approximately $18.39 million.

Of course, that figure includes the non-guaranteed “league minimum-equivalent” contracts of Anderson, Smith, Beverley and Ohlbrecht, all of which can be waived to create additional cap room.  I purposely do not include Covington with the other four players here because, since his contract is partially guaranteed and his total salary is (likely) the same as an incomplete roster charge, it’s actually cheaper to include him in team salary than not to.

If you waive Anderson, Smith, Beverley and Ohlbrecht, and replace them with four (4) incomplete roster charges ($490,180 each, to bring the total number of players/cap holds on the books to a minimum of 12), it would bring the Rockets’ total available cap room up to approximately $19.8 million.

To make up the difference needed to get to “Dwight Max Room” ($20.51 million), the team could potentially waive White using the “stretch” provision, which enables teams to stretch out a waived player’s cap hit over twice the number of years remaining on the player’s contract, plus one (in White’s case, his lone remaining guaranteed year could be stretched out over three seasons).  Waiving White would net the Rockets an additional $656,140 in cap room.

While these moves would bring the Rockets’ total available cap room–according to my figures–to approximately $20.46 million in cap room (around $54,000 or so short of Dwight Max Room), it is entirely possible that my rough estimate of Harden’s salary–my one deviation from the numbers on Shamsports.com because no such number exists yet–could be off by more than $54,000, meaning that this avenue quite possibly would create Dwight Max Room.  It’s also entirely possible that Howard won’t let $54,000 determine the course of his NBA career.

Other Cap-Clearing Alternatives
Despite that the above-referenced cap maneuvers might create Dwight Max Room, it is unlikely that the Rockets would want to part so easily with some of its good young players.  For purposes of this piece, let’s assume that the Rockets elect to waive Anderson and Ohlbrecht (each of whom could presumably be re-signed later at the same salary, although either or both of them might get claimed off waivers by another team) but decide not to waive Smith and Beverley (both of whom are tremendous value contracts and neither of whom would ever make it through waivers unclaimed).  Keeping Smith and Beverley on the books would reduce the Rockets’ cap room by $692,805

However, if White could be packaged in a trade with Smith without any salary coming back rather than being waived, the Rockets would get to approximately $20.73 million in cap room.  That’s more than enough to offer Dwight the max and would also allow the Rockets to retain Beverley.

There is also no guarantee that it will be another one or more of the young power forwards dealt.  There have been reports that the Rockets were gauging other teams’ interest in Lin (including one very speculative-sounding rumor of a trade to Detroit for a signed-and-traded Jose Calderon).  If Lin were moved with little to no salary coming back, Houston could comfortably add Howard–and probably another player–without having to trade or waive anyone else on the roster.  (For what it’s worth, I assume that the team does this for all of its players–sans Harden–and would not jump to any conclusions that the Rockets are actively looking to “dump” their starting point guard.)

There are any number of alternative means by which the Rockets can create additional cap room.

Save a Little Something for Isaiah
Howard may not be the only new addition on whom the Rockets would like to use their available cap room.  Given that Canaan likely graded out as a first round talent on the Rockets’ draft board (pure speculation on my part), it is also likely that the team would want to sign Canaan to a three- or four-year deal, similar to the contracts previously handed out to second rounders like Chase Budinger and Parsons.

In order to sign Canaan to a contract of more than two years in length or starting at higher than the rookie minimum salary ($490,180), the Rockets would need to leave a sliver of cap space open.  For instance, in 2011, the Rockets set aside $850,000 in cap room to use on Parsons while negotiating a free agent contract with Samuel Dalembert.

Of course, if the Rockets are forced to choose between using an extra few hundred thousand dollars or so on Howard or Canaan, I’m pretty confident that Canaan would find himself playing for the rookie minimum faster than you can say “Carl Landry.”

So . . . Is That It?

Daryl Morey

After the draft, Daryl Morey was confident he could create the cap room, and he was right

Using most/all of their cap room on one free agent signing (Howard) has raised many questions from fans wanting to know how the Rockets will be able to add other quality veteran free agents for next season.  While the utilization of cap room means that the Rockets would not be able to utilize many of their salary cap exceptions, there are still other avenues to add quality players.

One new salary cap exception introduced in the 2011 CBA is a type of Mid-Level Exception commonly referred to as the “Room” Exception.  The Room Exception allows a team that has opted to use its salary cap room to exceed the salary cap by a set amount in order to add one or more players on a one- or two-year contract.  It cannot be combined with cap room to offer a free agent more money.  For the 2013-14 season, the amount of the Room Exception is $2.652 million.  It is quite possible that the Rockets will try to use the Room Exception to bring back either Garcia or Delfino or to add another quality veteran willing to take a pay cut in order to play on a championship contender.

Another avenue for adding players could be the Minimum Player Salary Exception, which allows a team to exceed the salary cap to add players for the veteran’s minimum.  Such contracts can be up to two years in length.  If a veteran of three or more NBA seasons is signed, his cap hit is only the two-year veteran’s minimum salary (for 2013-14, $884,293); and if such a player signs a one-year minimum deal, the portion of his salary over and above the two-year veteran’s minimum actually gets picked up by the league!  To the extent that the Rockets need to waive several players to create enough cap room to sign Howard, it is possible that Houston adds at least one decent veteran on a minimum salary contract.

With a potential foundation of both Harden and Howard, the Rockets would certainly present an attractive opportunity to NBA veterans looking for a rotation spot on a winner.

Conclusion
Over the course of the past year, the Houston Rockets have quickly gone from “perennial bridesmaid” to “prime catch” in the eyes of many star players.  With an awesome (and I mean that literally) contingent–including Rockets owner Leslie Alexander, GM Daryl Morey, Executive VP Gersson Rosas, CEO Tad Brown, Harden, Parsons and Rockets legends Hakeem Olajuwon and Clyde Drexler–meeting with Howard, it is quite clear that the Rockets have become major players in how the NBA landscape will shift this summer and beyond.  With a core of high quality young players, along with plenty of cap room, Houston now presents one of the league’s best opportunities for a star player to become part of a championship contender for the next several years.

Houston Rockets

Houston Rockets Draft Decisions: Who Will Be the #3 Pick?

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Houston Rockets Podcast

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!



CLUTCHFANS PODCAST: SPOTIFY | APPLE

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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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