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Houston Rockets Salary Cap Update: 2015 Offseason Pre-Draft Edition

After the Houston Rockets’ best season in nearly 20 years, David Weiner breaks down their cap situation to keep their own free agents and improve the team.

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Josh Smith Corey Brewer Houston Rockets

The Houston Rockets just completed their most successful season in 18 years, advancing to the Western Conference Finals despite numerous injuries to key players throughout the season (including injuries to Patrick Beverley and Donatas Motiejunas that kept them out for the entire playoff run).

While many fans still have a bad taste in their mouths from a 4-1 series loss to the Golden State Warriors, the vast majority still seem to have (what I believe to be) the proper perspective on the overall success of this season’s campaign.

With the Rockets’ season now ended, it’s time to once again take a look at the team’s 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.)

The Houston Rockets currently have the following player salary commitments, cap holds and salary cap exceptions available for the 2015-16 season:

Player salary commitments:  Dwight Howard ($22.36 million), James Harden ($15.76 million), Trevor Ariza ($8.19 million), Kostas Papanikolaou ($4.8 million, non-guaranteed), Terrence Jones ($2.49 million), Motiejunas ($2.29 million), Pablo Prigioni ($1.73 million, partially guaranteed for only $440,000), Clint Capela ($1.24 million), Joey Dorsey ($1,015,421) and Nick Johnson ($845,059).

Cap holds:  Jason Terry ($8.76 million – Rockets hold full Bird rights), Corey Brewer ($6.11 million – Rockets hold Early Bird rights), Beverley ($2.725 million – Rockets hold full Bird rights), Josh Smith ($2.49 million – Rockets have only Non-Bird rights), the rookie scale slot for the #18 pick in the 2015 NBA Draft ($1.37 million), and K.J. McDaniels ($1.05 million – Rockets have only Non-Bird rights).

Other Salary Cap Exceptions:  Houston has some small trade exceptions from the Alexey Shved ($1.62 million), Isaiah Canaan ($816,482) and Troy Daniels ($816,482) trades.  However, the key salary cap exception available to the Rockets this summer will be the Mid-Level Exception (MLE), either the Non-Taxpayer variety ($5.464 million, the use of which would impose a hard cap at the “apron” level – currently projected at $85.6 million) or the Taxpayer variety ($3.376 million).  Houston will be unable to avail themselves of the Bi-Annual Exception ($2.139 million) this summer, as they used it this past season on Smith.  (The Rockets could instead have the Room Exception of $2.814 million if they elect to use cap room this summer, but that is unlikely, as described below.)

Given these salary commitments and exceptions, and based on the currently projected 2015-16 salary cap of $67.1 million, the most cap room the Rockets could create (barring trades . . . yeah, I know) is about $10.37 million.  However, this would involve renouncing rights to all free agents, waiving Papanikolaou and Prigioni and renouncing/trading away their first round pick.  Since the Rockets are now at a level (title contention) where roster continuity is more important, do not expect them to opt for cap room . . . unless a star-caliber player shakes loose and opening up additional cap room is the only way to obtain that player.  So the most likely scenario is that the Rockets will operate over the cap this summer.

So… What Happens Next?

As the Rockets prepare for the NBA Draft and the subsequent free agent season, there will be some internal cap-maneuvering for GM Daryl Morey and his staff to do.

The most likely such maneuver will be for the Rockets to pick up the $4.8 million team option on Papanikolaou’s contract.  This option year is fully non-guaranteed, so there is no financial commitment attached to exercising the option.  Also, exercising the option is necessary in order for Papanikolaou to be trade-eligible.  As a sizable non-guaranteed contract, Papanikolaou will probably be a crucial component to almost any trade of significance the Rockets attempt to pull off this summer.  I would be shocked if Kostas’s option were not picked up on or prior to draft day.

Houston will also likely extend qualifying offers to Beverley ($2.725 million, more than he’d otherwise receive based on his prior salary due to meeting the CBA’s “starter criteria”) and to McDaniels ($1.05 million, which is the one-year veteran’s minimum plus $200,000) in order to make them both restricted free agents and to give the Rockets the ability to match any offers from other teams.

Sergio Llull celebrates 2015 EuroLeague win

Sergio Llull may finally come over after winning the EuroLeague title in 2015

Expect the Rockets to ramp up their years-long courtship of 2009 second round pick Sergio Llull, a 6-3 combo guard who has developed into one of the top guards in Europe.  After helping lead Real Madrid to a EuroLeague title, there is little else Llull can accomplish overseas.  While being a star on a perennial title contender in his home country (as well as a prohibitive contract buyout) has thus far kept Llull from making the leap to the NBA, he has reportedly always had interest in eventually coming over.  With a title now in hand (and his buyout amount allegedly now low enough), now seems like the ideal time for the 27-year-old guard to join the Rockets.  He will likely command most/all of the MLE, so the Rockets will need to prioritize such a signing with their other offseason moves.  But hearing head coach Kevin McHale (in an interview with 790 AM’s Charlie Pallilo) recently, it sounds like signing Llull will be a high priority for this team.

Draft Day Maneuvering

The Rockets will enter the 2015 NBA Draft armed with the 18th and 32nd picks, about $800,000 in remaining cash to spend, as well as an assortment of young players, draft rights and future picks to trade.  Knowing Morey, expect Houston to diligently seek out a draft night deal.  Whether that is an attempt to trade up in the draft or a shot at acquiring an established point guard (such as Kyle Lowry or Ty Lawson) remains to be seen.

Unlike trades consummated after the July Moratorium, draft day trades (as in, those trades actually consummated before July 1) are made using this current season’s cap figures.  With the Rockets only about $2-3 million below the luxury tax threshold this season, any large draft day trades they make will probably subject them to the “taxpayer matching rules” (in which a team that will be over the tax threshold following a trade may not take back more than 125% of outgoing salary plus $100,000).  Therefore, we may see the Rockets agree to terms on a trade during the draft but not have it consummated until some time in July (when the cap figures reset, certain outgoing players’ salaries increase, and the team can possibly drop far enough below the tax threshold to work under more favorable salary matching rules).

The more likely scenario (as is always the case) is that the Rockets are unable to pull off a significant draft day trade.  We may instead see Rockets owner Leslie Alexander once again allow Morey to spend his remaining $800,000 cash allotment this season on a late second round pick to stash overseas (as the team has done in recent years with Furkan Aldemir and Alessandro Gentile).

Free Agent Decisions

The Rockets have several key decisions to make regarding their own free agents that could greatly impact what they do about any outside additions to the roster.  In his interview with Pallilo, McHale made it quite clear that retaining most/all of their free agents was a high priority for the Rockets.

Patrick Beverley:  While Beverley’s relatively low cap hold could possibly help the Rockets make other maneuvers before re-signing him, don’t expect Beverley to be overly generous in his contract demands.  Despite his injury history, expect his agent to cite (repeatedly) Beverley’s honor as an NBA All-Defense Second Teamer in 2013-14 and to look for a deal in the range of what Boston defensive guard Avery Bradley received last summer (4 years, $32 million).  That might be a tad rich for Houston, especially if they hope to muster any meaningful cap room in the summer of 2016.  However, if Beverley is willing to sign for less in order to retain a starting spot on a contender, there is still a decent chance that he’ll be back next season.

Corey Brewer:  After waiving his player option as a condition to his trade to Houston last December (an option that he undoubtedly would not have exercised anyway based on his late season performance), Brewer will become an unrestricted free agent on July 1.  The Rockets hold Early Bird rights to Brewer, which means that they can offer him a deal starting as high as about $8.23 million.  As it is unlikely that Brewer will do better than that (or even get that high an offer from the Rockets), Houston should be able to exceed the cap in order to retain Brewer if the sides can agree on a deal.  While Brewer’s high motor is a huge plus for this team, the Rockets will need to weigh his strengths against his weaknesses (poor 3-point shooting and a tendency to overplay too much on defense) when deciding how much to offer him.

Josh Smith:  I wrote in my last cap update about the details surrounding Smith’s free agency and how much the Rockets could offer him.  Essentially, Houston must either hope that Smith accepts its Non-Bird free agent tender ($2.49 million) or use the MLE (or cap room) to re-sign Smith.  While Smith would still clear over $7 million in total salary next season between a Non-Bird tender from Houston and his stretch payment from the Detroit Pistons, he can always make more with a larger new contract.  It seems the Rockets are hoping they can leverage Smith’s happiness in Houston to convince him to stay for the Non-Bird amount.  Only time will tell if that strategy will work.

K.J. McDaniels Houston Rockets free agent

It could be tough to keep K.J. McDaniels, who should get a lot of league interest

Jason Terry:  Coming off an MLE-sized contract he signed with the Boston Celtics in 2012, do not expect Terry to re-sign for anything close to that much this summer.  But the Rockets apparently love what Terry brings to the table, both on and off the court.  As has been mentioned on this site, look for the Rockets to offer Terry a deal similar to what they gave Francisco Garcia a couple of years back: either a two-year veteran’s minimum deal (with a player option on Year 2) or a one-year vet minimum deal (perhaps with a tacit understanding about an ongoing role with the team).

K.J. McDaniels:  The decision with McDaniels will likely be one of the hardest decisions of the offseason for Houston.  A young player with high upside, there will certainly be several teams that come calling for McDaniels’s services.  But the Rockets are limited to either their qualifying offer ($1.05 million) or tapping into the MLE (or cap room) to re-sign K.J.  (As an “Arenas Rule” free agent, no team can offer McDaniels a starting salary in excess of the full Non-Taxpayer MLE; but teams could still create the sort of “poison pill” offer sheets Houston utilized to sign Jeremy Lin and Omer Asik.)  The Rockets traded for McDaniels in February largely to reserve another palatable alternative for themselves this summer should Brewer leave or should Ariza be traded.  But if Ariza and Brewer are both Rockets next season — and especially if Llull comes over as an MLE signing — it is likely that McDaniels moves on to another team.  If the Rockets can somehow convince McDaniels to accept the qualifying offer (with the hopes of signing a larger contract next summer), it would be quite the coup for Morey and his staff.

Conclusion

After a terrific playoff run to the Western Conference Finals, the Rockets must now turn their attention to both retaining the talent that got them there as well as adding to that talent via trades and free agency.  Morey and company have enough assets to at least make legitimate trade offers this summer for a “third best player” or other key piece.  Even if no outside talent is added, bringing back this season’s entire (healthy) rotation, with the additions of Llull and a mid-first rounder, could possibly be enough to get Houston over the hump next season.  But if we’ve learned anything from the last several years, it’s that the Houston Rockets will explore every possible avenue to get better.

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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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