Houston Rockets Salary Cap Update: 2016 Offseason Edition
A complete breakdown of the Houston Rockets salary cap situation now and heading towards 2017.
Well, that was an eventful Saturday afternoon press conference!
At that press conference, the Houston Rockets introduced their two key free agent acquisitions, sharpshooting power forward Ryan Anderson (“4 years, nearly $80 million) and dynamic scoring guard Eric Gordon (4 years, nearly $53 million). Both players are expected to add much-needed shooting, floor-spacing and shot creation to an offense that relied far too heavily on James Harden last season.
Then, in a surprise move, the Rockets also announced that they had renegotiated and extended Harden’s deal so that he will get paid the maximum salary through 2020 (the last season being a player option). I wrote more about that extension here
This seemed like as good a time as any to examine these moves (and others) and their salary cap implications for the Rockets.
Since My Last Update…
Here are some Rockets-related moves that happened since my last salary cap update:
- In the 2016 NBA Draft, the Rockets selected Chinanu Onuaku (6-10 C out of Louisville) with the 37th pick and Zhou Qi (7-1 C out of China) with the 43rd pick
Immediately following the draft, Houston agreed in principle to multi-year partially-guaranteed deals with undrafted free agents Gary Payton II (6-3 PG out of Oregon State), Isaiah Taylor (6-3 PG out of Texas) and Kyle Wiltjer (6-10 PF out of Gonzaga)
- Dwight Howard opted out of his contract for 2016-17 and later agreed to a new 3-year, $70 million deal with the Atlanta Hawks
- The Rockets extended a qualifying offer to Donatas Motiejunas, making him a restricted free agent (no qualifying offer was made to Terrence Jones, who became unrestricted)
- The salary cap for the 2016-17 season was set at $94.143 million (with a luxury tax threshold of $113.287 million)
- On the second day of free agency, the Rockets agreed to deals with Anderson and Gordon
- The Rockets agreed in principle to a one-year, $2.9 million deal with Nene (Hilario)
- In order to clear cap room for the Anderson and Gordon deals and the Harden extension, Houston renounced its rights to free agents Howard, Jones, Josh Smith and Jason Terry and also waived Andrew Goudelock
Player Salary, Exceptions and Available Cap Room
The Houston Rockets currently have the following player salary commitments, cap holds and salary cap exceptions available for the 2016-17 season:
Player salary commitments: Harden ($26.54 million), Anderson ($18.7 million), Gordon ($12.4 million), Trevor Ariza ($7.81 million), Brewer ($7.61 million), Beverley ($6.0 million), K.J. McDaniels ($3.33 million), Sam Dekker ($1.72 million), Michael Beasley ($1.40 million – non-guaranteed until August 1), Clint Capela ($1.30 million), and Montrezl Harrell ($1.05 million).
Cap holds: Motiejunas ($5.72 million – Rockets hold full Bird rights). Second round picks (like Onuaku or Zhou Qi) do not count against the cap until they are signed. Since none of Payton, Taylor or Wiltjer have actually signed, none of them count against the cap.
Other Salary Cap Exceptions: Because the Rockets opted to drop below the salary cap in order to use their available cap room on Anderson, Gordon and Harden, they have lost the use of the “full” Mid-Level Exception and the Bi-Annual Exception. Instead, they are limited to using the Room Exception ($2.898 million), which can be utilized once they use all of their cap space. Presumably, this Room Exception has been dedicated to Nene.
Given these salary commitments, cap hold and exceptions, and based on a 2016-17 salary cap of $94.143 million, the Rockets have only a little more than the rookie minimum salary’s worth of cap room remaining. If Motiejunas leaves in free agency, Houston’s available cap room could increase to nearly $6.3 million, but for reasons described below, that probably won’t happen. As with all of these updates, these figures assume the Rockets do not make any trades; but as we all know, GM Daryl Morey is always looking for trades that can help his team.
So… What Happens Next?
Bring Back D-Mo: It’s no coincidence that Houston waived its rights to all of its free agents except for Motiejunas. As one of the league’s top remaining free agents on the market, D-Mo will very likely receive an offer sheet (or perhaps even an offer from the Rockets) well in excess of his $5.72 million cap hold. Since the Rockets hold Motiejunas’s Bird rights, they can exceed the salary cap in order to re-sign him or to match any offer sheet. With precious few impact players willing to take $6 million or less in this market – I’m still surprised Houston got Nene for just $2.9 million – odds are that the Rockets follow through with their threats to match any offer sheet for D-Mo, even if it is somewhat excessive. In the alternative, the Rockets could conceivably sign and trade Motiejunas as part of a package for another key contributor, although (what used to be known as) “Base Year Compensation” issues with D-Mo might complicate some trade scenarios.
Save a Little Something for Nanu: Expect the Rockets to use their remaining salary cap room to make Onuaku part of a Rockets tradition that has spanned from Chase Budinger to Chandler Parsons to Isaiah Canaan to Nick Johnson to Harrell. Each of those players were early to mid-second round picks who received a multi-year (three or four seasons) deal from the Rockets with a starting salary above the rookie minimum. (Johnson’s salary was right at the rookie minimum, but he got three years, fully guaranteed.) Morey and company have always tried to lock in these second round picks to longer-term deals in order to secure talent on the cheap. They will likely try to sign Onuaku before signing or matching an offer sheet for Motiejunas. However, given the increased salaries being handed out to other early second rounders this summer (such as Deyonta Davis and Ivica Zubac), there is some risk that Onuaku might take the “K.J. McDaniels Route” and instead accept a one-year rookie minimum deal in order to hit restricted free agency next summer. The Rockets will try to resolve any such issues with Onuaku sooner rather than later.
The Undrafted Guys: While it was reported on draft night that the deals agreed to in principle with Payton, Taylor and Wiltjer were for three years each, the Rockets’ lack of cap room may necessitate that those deals become two-year contracts instead. The third year of each player’s deal was likely non-guaranteed, and each deal was likely negotiated to include a third season to the extent the Rockets had cap room available for that purpose. If there is any additional cap room that opens up, some of it may be used to sign Payton for a third year, then maybe Taylor and/or Wiltjer, too.
Gentile Will Have to Wait: Despite registering interest in playing for coach Mike D’Antoni, it appears 2014 second round pick Alessandro Gentile will have to wait at least another year to play for the Rockets. Reportedly, Gentile recently committed to stay one more year with Olimpia Milano after failing to reach agreement with Houston. With a glut at the wing positions and with little to no cap room to spare (Gentile would have probably required more than the rookie minimum to make the jump to the NBA), a fit could not be found at this time. With several other NBA teams reportedly expressing interest in Gentile, don’t be surprised if Houston trades his draft rights, whether for a future pick or as a sweetener in a larger trade.
Looking Ahead to 2017
The Houston Rockets currently have the following player salary commitments, cap holds and other salary variables for the 2017-18 season:
Player salary commitments: Harden ($28.53 million), Anderson ($19.54 million), Gordon ($12.96 million), Brewer ($7.58 million), Ariza ($7.42 million), Beverley ($5.51 million), McDaniels ($3.48 million – team option), Capela ($2.33 million – team option), Dekker ($1.79 million – team option), and Harrell ($1.09 million)
Cap holds: Nene ($3.48 million – Rockets hold Non-Bird rights), Beasley ($1.01 million – Rockets have Early Bird rights)
Other Variables: Motiejunas (if retained – 2017-18 salary unknown), Onuaku ($905,249 one-year vet minimum, fully guaranteed?), Payton ($905,249 – partially guaranteed?), Houston’s 2017 first round pick ($1.1 million to $2 million cap hold?)
With a projected salary cap of $102 million (recently revised downward from prior estimates as high as $110 million), the Rockets were not expected to have max cap room, even before the Harden extension. Add to that any salary paid to Motiejunas, and that cap room becomes relatively minimal in the grand scheme of attracting star free agents. Even if Motiejunas is allowed to walk this summer, all team options (except for Capela’s) are declined and Brewer is jettisoned for no salary in return, the Rockets wouldn’t have more than about $21 million in cap room in a summer when the lowest max salary is expected to exceed $24 million (subject to further increase in the upcoming CBA negotiations).
If the Rockets are going to add another star in 2017, it will probably need to be either via trade or with cap room created by trading pieces out. But if Houston can get back to its winning ways, there is a decent chance that teams swimming in cash again next summer would be willing to take on some of the Rockets’ role players. (For instance, a trade for Brewer with only one year left on his contract – or after a bounce-back season – would be much more palatable to other teams than dealing for him now and would require less pick compensation from the Rockets in order to move him.)
Also, if the Rockets remain above the cap next summer, they could use the Non-Taxpayer Mid-Level Exception (currently scheduled to be $5.8 million but subject to likely increase in the 2017 CBA) to add another contributor, perhaps including the long-pursued Sergio Llull.
The Houston Rockets have added some significant future pieces and locked up their franchise star longer-term, sending a statement to the league that they will not be in the same boat as teams like the Thunder and Kings, whose stars are (or will be) the subject to constant trade rumors. While cap flexibility may be more limited going forward, as Kevin McHale used to say, “Cap Flexibility” never scored a point or grabbed a rebound. Here’s hoping for many more points, rebounds and wins from Harden and his new crop of Rockets teammates.
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.