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Houston Rockets Salary Cap Update

With the final cuts made and season set to start, David Weiner breaks down Houston’s cap situation and how the Rockets have positioned for a trade.

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Since striking out swinging for a super-team (a risk that, in this author’s opinion, was well worth taking), the Houston Rockets have been waiting for their next chance to get that significant hit.  So far, there has been a single or two for Rockets GM Daryl Morey; but that situational at-bat has not yet presented itself for the next big swing to be taken.

With the Rockets closing the book on training camp and ready to enter the regular season, it’s time to once again take a look at the team’s current salary cap situation and where the Rockets can go from here.

Player Salary, Exceptions and Available Cap Room

(Salaries and contract information courtesy of ShamSports.com and some good old-fashioned digging.)

Daryl Morey

Daryl Morey is positioning the Rockets to be able to make a significant trade this season

The Houston Rockets currently have the following player salary commitments, cap holds and salary cap exceptions available for the 2014-15 season:

Player salary commitments:

Dwight Howard ($21.44 million), James Harden ($14.73 million), Trevor Ariza ($8.58 million), Jason Terry ($5.85 million), Kostas Papanikolaou ($4.8 million), Terrence Jones ($1.62 million), Donatas Motiejunas ($1.48 million), Clint Capela ($1.19 million), Joey Dorsey ($948,163),  Patrick Beverley ($915,243, non-guaranteed), Francisco Garcia ($915,243), Isaiah Canaan ($816,482), Troy Daniels ($816,482), Nick Johnson ($507,336) and Tarik Black ($507,336, partially guaranteed for $50,000), along with guaranteed money owed to Jeff Adrien ($915,243), Ish Smith ($915,243), Robert Covington ($150,000) and Akil Mitchell ($150,000).

Cap holds:  None.

Exceptions:

(1) a trade exception from the Jeremy Lin trade that allows Houston to absorb one or more contracts totaling not more than $8.47 million (and which CANNOT be combined with other salaries for matching purposes in trades); and

(2) the Biannual Exception (BAE), which allows Houston to sign one or more players to contracts with starting salaries totaling $2.077 million for up to two years in length.

Given Houston’s current salary situation, the Rockets can no longer waive enough cap exceptions and salary to drop below the cap.  Barring another big trade in which meaningful salary is sent out for little/nothing in return, do not expect the Rockets to have any cap room this season.

The Rockets are about $9.6 million shy of the luxury tax threshold and about $13.6 million shy of the “apron” level that also acts as a hard cap for Houston this season.  That should be enough room for the Rockets to utilize most of the Lin trade exception, possibly the BAE, and still use salary matching rules to take on additional salary.  If there is a move to be made for a third star player, don’t expect the luxury tax to be a significant deterrent for Rockets owner Leslie Alexander.

What Are They Doing?

As expected, Houston elected to operate over the salary cap this season, most notably because the combined value of their cap exceptions far exceeded the amount of cap room the Rockets would have had to make player acquisitions.

Instead, the Rockets have been attempting to fill out their bench with shooting (Garcia, Daniels) and defense/toughness (Dorsey, Black), all with league minimum signings.  In fact, other than signing the very raw Capela to his first round rookie scale contract, Houston has only made two additions making more than the league minimum salary since trading for Ariza in mid-July.

Jason Terry Houston Rockets

Jason Terry could be the key salary piece of a trade later this season

Papanikolaou — the 24-year-old Greek small forward whose draft rights Houston held — was lured away from Europe with an eye-popping two-year deal paying him most of the Non-Taxpayer Mid-Level Exception (other than the rookie minimum-sized portion used to sign Johnson to a three-year deal).  Even with the second year being both a team option and fully non-guaranteed until early October 2015 (making his contract a potentially valuable trade asset next summer), a $4.8 million starting salary is far more than players of Papanikolaou’s caliber normally receive when first coming to the NBA.

Terry — the 37-year-old veteran guard whose best days are behind him — was acquired from Sacramento in what was obviously a salary dump for the Kings.  The Rockets received Terry and two potentially valuable future second round picks in exchange for the non-guaranteed contracts of Alonzo Gee and Scotty Hopson, two players who were never part of the Rockets’ future on-court plans.  (Quick tangent: With the trade of Gee and Hopson, Houston’s total haul from the Omer Asik trade this past July is now Ariza, Terry, a potential lottery pick and two second rounders, making it one of the most underrated deals of the 2014 offseason.)

The Rockets also made some tough final cuts to bring their roster down to the league-mandated 15-man maximum.  The most controversial of the cuts were Adrien and Smith.  Many had felt that Adrien had out-played Dorsey for a backup big man spot; and coach Kevin McHale had been using Smith as his primary backup point guard throughout much of the preseason.

So why take on Terry’s contract (even for the second rounders)?  Why pay Papanikolaou so much?  Why keep Dorsey over Adrien?  And why get rid of Smith?

Why Are They Doing That?

As I mentioned on the podcast with Dave Hardisty back on July 1, the trades of Asik and Jeremy Lin threatened to leave the Rockets devoid of contracts large enough to match salaries in major trades to add talent to the core of Howard, Harden and (now) Ariza.

By acquiring the mid-sized contracts of Terry and Papanikolaou, Morey has put himself in position to at least be able to make trades for players in just about any salary range.

While CBA rules dictate that Terry’s salary cannot be aggregated with other salaries in trades for a period of two months after he was officially acquired (that period expires on November 16), he is immediately eligible to be traded by himself for one or more players making up to nearly $8.9 million.  Even if salary aggregation is required, Terry will be trade eligible long before the next mini-trade season begins in mid-December.

As a signed draft pick (rather than an outside free agent), Papanikolaou became trade-eligible only 30 days after his signing.

The most important part about Terry’s and Papanikolaou’s contracts, however, is their expiration date.  Terry’s contract expires after this season; and Papanikolaou’s has a team option that will most likely be picked up but that won’t remain guaranteed unless he greatly outperforms initial expectations or a major trade is made without using his contract (it being quite likely that Papanikolaou ends up being traded or waived instead).

With both salaries cleared off the books next summer, combined with a potentially huge increase in the salary cap, the Rockets could open up a significant amount of cap room.  Even if both players are waived/renounced, there is still a chance that one or both could be back on next year’s team at a reduced salary.

Joey Dorsey Houston Rockets

The length of Joey Dorsey’s guaranteed contract likely played a role in his making the final roster over Jeff Adrien

None of this is to say that Terry and/or Papanikolaou are not viewed as potential contributors to this Houston team.  But the presence of their mid-sized contracts (versus the bevy of rookie scale and veteran’s minimum contracts currently filling Houston’s roster) will facilitate a variety of trade options that otherwise would not be available to the Rockets, all while still allowing for material cap room next summer.

Dorsey — who had been battling a foot injury for much of training camp — was signed to a two year, $2 million contract this summer, which includes a fully guaranteed salary in 2015-16.  Unlike Adrien (whose contract — while fully guaranteed — would have expired after this season), Dorsey could not be cut without negatively impacting the Rockets’ available cap room in 2015.  That was never really an option for Houston.  This, combined with Capela’s decision not to play overseas this season, resulted in Adrien (who himself battled an ankle injury throughout training camp) being the unlucky “odd man out” among the bigs.

As for Smith (who also had a fully guaranteed one-year deal), his lack of a reliable outside shot — combined with the increasingly impressive preseason performance of Canaan and the growing belief within the organization that Terry can be passable as a backup point guard playing alongside Harden — spelled his doom.  And with the Rockets otherwise lacking in depth at the small forward position behind Ariza and the rookie Papanikolaou, roster balance dictated that Garcia should claim a roster spot over Smith.

Conclusion

Morey has done an admirable (albeit not sensational) job of picking the team up off the canvass after a major swing-and-miss for a super-team.  The resulting supporting group of players is expected to provide the Rockets with both added perimeter defense and improved three-point shooting — two areas that sorely hurt the Rockets last season — while still offering the flexibility to make in-season trades of significance and/or to open up significant cap room next summer.

While the scoring and play-making ability of Chandler Parsons and Lin, as well as the post defense and rebounding of Asik, will be missed in Houston, there have been improvements made in other areas.  The end result, the Rockets hope, is a team better prepared for the NBA Playoffs.  And maybe for a big trade, too.  All while preserving flexibility to make a major addition next summer.

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Mike D’Antoni: The Rockets isolation offense wasn’t pretty, but it was effective

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Mike D'Antoni Houston Rockets

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.”

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Why Alperen Sengun will come off the bench

With Bruno Fernando expected to start, here’s the plan for the Rockets second-year center

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Alperen Sengun Houston Rockets

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.

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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

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Kevin Porter Jr. signs Rockets extension

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.

“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.

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KJ Martin reportedly drawing interest on trade market

Rockets have had “ongoing talks” with Phoenix Suns about the third-year forward

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KJ Martin Houston Rockets

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.

 

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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

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Jabari Smith Jr Houston Rockets

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.

https://twitter.com/brhoops/status/1576753965730889729?s=20&t=X5YfCfDU5HwynBnvqoicSQ

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.

https://twitter.com/FraudeauxNBA/status/1576358215406989312?s=20&t=X5YfCfDU5HwynBnvqoicSQ

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.

Rotation Notes

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.

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