Guaranteed Contracts
- Dwight Howard ($21,436,271)
- James Harden ($14,728,844)
- Omer Asik ($8,374,646)
- Jeremy Lin ($8,374,646)
- Terrence Jones ($1,618,680)
- Donatas Motiejunas ($1,483,920)
- Isaiah Canaan ($816,482)
Options
- Francisco Garcia ($1,316,809, Player)*
- Chandler Parsons ($964,750, Team)**
- Troy Daniels ($816,482, Team)***
Non-Guaranteed Contracts
- Josh Powell ($1,227,985)
- Omri Casspi ($1,063,384)
- Patrick Beverley ($915,243)
- Robert Covington ($816,482; guaranteed for $150,000)
Free Agents / Cap Holds
- Jordan Hamilton ($2,109,294)****
- No. 25 pick ($991,000)
Draft Picks
- 1st Round (25th overall)
- 2nd Round (42nd overall)
Cap Outlook
- Guaranteed Salary: $56,983,489
- Options: $3,098,041
- Non-Guaranteed Salary: $3,873,094
- Cap Holds: $3,100,294
- Total: $67,054,918
In October 2012, just 20 months ago, the Rockets had one of the worst rosters in the league, having skinned the team of five of its top six scorers from the 2011/12 season. Two superstar acquisitions later, the Rockets enter the summer of 2014 with some sense of disappointment over a first-round exit. The prolific duo of James Harden and Dwight Howard came together quickly, but Houston still lacks the third star that’s required to build the prototypical title contender. GM Daryl Morey pulled off the cap gymnastics necessary to accommodate a max deal for Howard last summer, but finding another marquee player this time around will require even more challenging payroll manipulation.
The Rockets enter the summer with commitments that are about $6.2MM short of the projected $63.2MM salary cap. That only covers seven players and doesn’t take into account the player option for Francisco Garcia, who denied a report last month that he intends to opt out. It also doesn’t factor in the nearly $1MM on Houston’s books for the 25th overall pick, but that’s an asset the team would probably have little trouble shedding if it wants to. Even if Garcia opts out and the Rockets dump their first-rounder, they’re set to enter free agency with no more than $3.7MM in cap flexibility, thanks to the roster charges equivalent to the rookie minimum salary they would incur for having fewer than 12 players under contract. That figure also leaves out the final year of Chandler Parsons‘ contract, a thorny issue that will force the team into one unappealing set of consequences or another.
Morey certainly can’t begrudge his deal with Parsons, which has proved such a bargain over the past three years that it’s become a model for others like it around the league. The Rockets have the opportunity to enjoy another season of a starting-caliber small forward for less than $1MM, but picking up the option would put Parsons on a path toward unrestricted free agency next summer. The Rockets have reportedly decided to decline the option to allow themselves the chance to make Parsons a restricted free agent this summer, giving Morey the final say on where the former University of Florida standout ends up next season. The decision also plays a critical role in the team’s ability to sign other free agents this summer and next.
Picking up the option would impinge upon the team’s already limited flexibility for the summer ahead and invite bidders who’d be scared off by Houston’s ability to match offers this summer to jump into the Parsons sweepstakes next year. Setting Parsons free at the end of the month would allow the Rockets to simply take a pass on re-signing him if another small forward like Carmelo Anthony came calling, but it seems more likely that Houston would end up re-signing Parsons to a long-term, market-rate contract. Doing so would add to Houston’s books for the summer of 2015, the very time for which most other teams are clearing money for an enticing class of free agents. This is no easy call.
Complicating the pursuit of next summer’s free agent class is the possibility that Kevin Love, Rajon Rondo and others end up in their next destinations via trade before they ever hit the market. That’s why Morey isn’t idly waiting for the burdensome contracts of Omer Asik and Jeremy Lin to expire next summer. The GM says he doesn’t expect a deal to come together involving one or both of them, but in the same interview with Jonathan Feigen of the Houston Chronicle, he restated his commitment to an aggressive search for upgrades. A more recent report indicated the team is shopping Lin and Asik in an effort to clear room for Anthony. Still, I’d be surprised if Houston pulled the trigger on any such deal at any point before it became clear that Anthony or another such talent could be had. Knicks team president Phil Jackson‘s assertion that ‘Melo is at least thinking about opting in for next season rather than hitting free agency is a caution flag for teams that have been eyeing him, even if he’s still more likely than not to opt out, as he’s said on many occasions that he’ll do.
Trading either Asik, Lin or both in any deal that would clear significant cap space would be remarkably challenging. Few teams are willing and able to absorb nearly $8.4MM cap hits without giving up salary in return, and the balloon payments for Asik and Lin make it doubly hard for the Rockets to find trade partners. Each of them is due $14,898,938 in actual paychecks next season, as I explained a while back when I examined how such backloaded deals affect trades. There might be some charm for the Knicks in bringing Lin back for old time’s sake as part of a sign-and-trade for Anthony, but it seems doubtful that Jackson would agree to help a team with little other recourse to clear the necessary cap room for ‘Melo. Most teams would have more interest in Asik, whom the Hawks are reportedly pursuing. Still, trading only Asik in exchange for assets that don’t add to Houston’s payroll for next season would give Houston about $12.6MM worth of cap flexibility at best, not nearly enough to get into the running for ‘Melo. That almost certainly wouldn’t be enough to woo reported targets LeBron James, Chris Bosh, and Dirk Nowitzki, who appear even less available than Anthony.
Trades might allow an easier path to improvement, but while Love represents the primary trade target for just about every team, Houston doesn’t appear to be Love’s preferred destination. The Rockets seemed interested in Rondo at the trade deadline, though talks apparently never got started. The Celtics were one of the teams involved in Morey’s attempted Asik auction in December, but Morey would have to offer more than his backup center to pry an elite point guard from the hands of Danny Ainge, his old boss. The Celtics seem much more focused on convincing Rondo to stay rather than preparing for his departure, so the Rockets would probably meet a dead end down this avenue, too.
The prudent path for the Rockets this summer appears to be a quiet one, as unfulfilling as it might be for the creative, trade-happy Morey. The Rockets can have the non-taxpayer’s mid-level exception at their disposal if they decide to operate above the cap, and that can serve as a handy tool to help the team upgrade its defense with a rotation-caliber player. Houston finished just 12th in points allowed per 100 possessions this season, per NBA.com, in spite of the pairing of All-Defensive Second Team selection Patrick Beverley and Howard, a three-time Defensive Player of the Year, in the starting lineup. Oklahoma City free agent Thabo Sefolosha would seem like a fit for the Rockets if he rediscovers the stroke he had when he hit 42.2% of his three-point attempts in 2011/12 and 2012/13, though there have been no reports linking the longtime member of the Thunder to Houston.
The Rockets have only about $39MM on the books for 2015/16, so there’s plenty of reason for the team to exercise caution as it spends this summer. Flashy names like Love and Rondo may already be in their long-term homes by this time next year, but Goran Dragic, Paul Millsap, David West, Monta Ellis, Marc Gasol and Al Jefferson are among the others who can become unrestricted free agents in 2015. Morey has quickly turned the Rockets into a Western Conference heavy. The question is whether he’ll have the gumption to wait for just the right finishing touch that can turn the team into a true contender.
Cap footnotes
* — Garcia’s cap hold would be $915,243 if he turns down his player option.
** — Parsons’ qualifying offer would be $3,270,004 if the Rockets decline his option, as they reportedly intend to do. That figure would also be the amount of his cap hold. If Houston declines the option and doesn’t tender the qualifying offer, his cap hold would be $1,760,350.
*** — Daniels’ qualifying offer and cap hold would be $1,016,482 if the team turns down its option. His cap hold would be $816,482 if the team doesn’t tender the qualifying offer.
**** — The cap hold for Hamilton is equivalent to the greatest amount Houston can offer him for next season. Because the Nuggets declined their fourth-year team option on Hamilton before the season, the Rockets, who acquired him via trade, aren’t allowed to re-sign him for a 2014/15 salary that’s more than he would have earned on that option.
ShamSports and Larry Coon’s Salary Cap FAQ were used in the creation of this post.