July 12, 2016 at 11:10 am

Houston Rockets Salary Cap Update: 2016 Offseason Edition

Ryan Anderson Eric Gordon Houston Rockets

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?

Houston Rockets Donatas Motiejunas against Draymond Green

The Rockets can go over the cap to re-sign restricted free agent Donatas Motiejunas

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.

Posted in Houston Rockets, Salary Cap Update |
July 10, 2016 at 10:24 am

The James Harden Extension: A Salary Cap Perspective

James Harden signs Rockets extension

While the media was gathered at a Saturday afternoon press conference to introduce the Houston Rockets’ newest free agent acquisitions, the team made “a second announcement”: it had signed James Harden to an extension that will pay him the maximum salary through 2020 (the last season being a player option), locking up its franchise player for the long(er) term.

This announcement came as a huge surprise… to most.

“But how was that even possible?” you ask? Here’s how:

Players with deals of four years or longer who have been under their current contract for at least three years (like Harden) are eligible for a contract extension. An extension can prolong the player’s contract for up to four seasons (including seasons remaining on the player’s current contract). However, an extension alone cannot increase the player’s salary during the remaining year(s) on his deal, nor can it increase his salary in the extended years by more than 7.5% from the player’s previous salary.

But a renegotiation-and-extension of a player’s contract can increase a player’s existing salary up to the max, so long as the team has enough available cap room to provide such a raise. The Rockets had just enough space to do so. The Rockets used about $9.8 million in cap room to increase Harden’s previous salary of $16.8 million.

Harden’s extension will pay him $26.54 million this season, $28.53 million in 2017-18 and $30.52 million in 2018-19, with a player option for $32.51 million in 2019-2020.

Unless Harden dramatically underperforms his contract, expect him to opt out in 2019, at which time he will be a 10-year veteran and eligible (at least under the current CBA) for an even higher maximum salary. But with a boatload of goodwill in the bank (literally!), an opt-out by Harden would most likely be in order to secure another long-term deal with the Rockets rather than to bolt for another franchise.

This extension also provides the Rockets with a little more cost certainty for their star player prior to a 2017 CBA negotiation that could see a dramatic increase (quite possible) or even an elimination (less likely but still on the table) of the max salary. Note that, unlike in 2011, the players union’s leadership is comprised of superstars (including president Chris Paul and vice president LeBron James) who may be motivated to better compensate the league’s marquee players.

As I’ll touch on in further detail in my next salary cap update, this extension largely eliminates the Rockets’ remaining cap flexibility this summer and significantly hampers it next summer. However, avoiding the impending free agency limbo that the Thunder will undoubtedly face with Russell Westbrook this season may outweigh whatever that flexibility (which was not going to be sizeable, anyway) would have provided Houston.

Posted in Houston Rockets |
July 6, 2016 at 1:59 pm

Sergio Llull to Houston? Not this year.

Sergio Llull Houston Rockets

With the Houston Rockets still having roughly $9-10 million in cap room and a need for some help at point guard, many have speculated that this may finally be the time that Spanish league star Sergio Llull comes to Clutch City.

Not this year. The Rockets will not be signing him this offseason, a source confirmed to ClutchFans.

It remains unclear how much interest Llull has in coming over to the NBA. The Rockets felt very good about their chances of bringing him over last season but he declined their deal at a late hour, opting instead to sign an extension with Real Madrid through the 2020-21 season. It was reported that the NBA buyout clause in his new extension was friendlier to him than it was in his previous deal.

The 6-foot-3 combo guard was drafted by Denver with the 34th pick of the 2009 NBA Draft. His draft rights were sold to Houston that night for $2.25 million in cash, a record at the time for a second round pick.

As far as identifying talent, the Rockets did well as Llull has thrived overseas. He is a strong pick-and-roll guard who loves to play in the open court, which would make one think that a Mike D’Antoni system would be a draw. He’s a career 38-39% three-point shooter, though he has been less effective from distance the past two seasons. He’s passionate about the game, having a flair for the dramatic and a penchant for game-winning shots.

It will now be a minimum of eight years from the time Houston drafted him to the next shot they have at getting him over, and even Arvydas Sabonis thinks that’s a bit long. That raises the question about whether the Rockets will ever bring over the 28-year old guard.

Posted in Houston Rockets |
July 6, 2016 at 12:34 pm

Rockets land center, sign Nenê for just $2.9 million

Nene Houston Rockets

It’s the Summer of Overspending, but the Rockets may have just found their value.

The Rockets have agreed to a one-year, $2.9 million deal with Wizards free agent center Nenê Hilario. The 33-year old big man confirmed the deal via Twitter, with newest Rocket Eric Gordon replying to the tweet with his approval as well.

The 6-foot-11, 250-pound Nenê was a target of the Rockets in 2011, having agreed to sign with Houston contingent on the Pau Gasol trade. That deal was later vetoed by the league and Nenê re-signed with Denver, traded to Washington a year later.

For the Rockets, this is sorely needed. Clint Capela, while progressing, is not quite ready for the bulk of the minutes and Nenê, who was an effective backup last season for the Wizards, fills this gap.

Nenê is a good defensive player, though not the rim protector that a Dwight Howard is. He’s a smart, strong defender that is difficult for opponents to move. Like a Chuck Hayes, he doesn’t fill up the box score but he has a major impact in plus-minus.

The problem, as it is with other Rocket additions this offseason, is health. Nenê played in just 57 games this past season and has averaged playing just under 60 games a season the past four years.

The Rockets now have some depth at center, though they are likely to start out rookie Chinanu Onuaku at Rio Grande Valley. As Deuce of the BBS points out, the Rockets now have a Nanu and a Nene at center.

Posted in Houston Rockets |
July 2, 2016 at 6:51 pm

Rockets sign Eric Gordon to four-year, $53 million deal

Eric Gordon Houston Rockets

The Houston Rockets are adding shooters.

Shortly after striking a deal with Ryan Anderson, the Rockets have agreed to terms on a deal with Pelicans guard Eric Gordon, as first reported by Adrian Wojnarowski.

The deal is for four years at $53 million.

Gordon has dealt with several injuries in New Orleans but is a very strong shooter and scorer, capable of more if he can stay healthy. Therein lies the rub as Gordon played in only 141 games over his five seasons in New Orleans.

But he’s a dangerous scorer. The 27-year old shooting guard is a career 38.3% three-point shooter and 81% free-throw shooter, so he can put the ball in the basket. He might be effective as a spot-up shooter alongside Harden but is definitely capable of being a strong sixth man scorer for this squad.

Defense isn’t found too much on the menu right now, but one thing looks pretty certain — this won’t be the Corey Brewer-Josh Smith brickfest we’ve been seeing the last couple of years. The Rockets have added a couple of guys that teams will have to defend on the perimeter. Mike D’Antoni has more weapons to work with now as James Harden, Trevor Ariza, Patrick Beverley, Anderson and Gordon can all connect on spot-up threes.

As for what’s next, it looks like the Rockets could still have ~$10 million left in cap space, with Donatas Motiejunas’ restricted free agency still up in the air.

If D-Mo does return and can get his back situation in order, you have to hope he can play some center minutes (as he did in 2014-15) as that spot is a concern right now.

Posted in Houston Rockets |
July 2, 2016 at 2:47 pm

Rockets land sharpshooting big Ryan Anderson for four years, $80 million

Ryan Anderson signs with Houston Rockets

The Rockets didn’t get to make a pitch to Kevin Durant, couldn’t woo Kent Bazemore and seem to be out of the running for Al Horford, but they did make one big signing on Saturday.

Pelicans forward Ryan Anderson reportedly will sign a four-year, $80 million contract to join the Rockets, as first reported by Adrian Wojnarowski.

The Rockets need shooting and salaries have ballooned. We now live in a world where Jon Leuer signs for four years, $42 million, so the $20 million per year the Rockets are giving Anderson isn’t as crazy as it sounded 36 hours ago. Anderson has had Houston’s interest for some time.

The 6-foot-10 power forward is a career 37.7% three-point shooter, averaging 17.0 points per game last season to go with 6.0 rebounds. He enjoyed a career year in 2013-14 when he put up 19.8 points a night, hitting 40.9% from deep. The hope is that he will see even more open threes here.

The 28-year old fits what Mike D’Antoni is likely to implement, an offensive-minded scheme that will shoot a lot of triples and needs a power forward that can stretch the floor. James Harden will undoubtedly love kicking passes out to Anderson. He’s also a solid rebounder. What he’s not is a defender, which is the big bonus the Rockets would have gotten in Bazemore and/or Horford.

He wasn’t my first choice and it’s a lot of money for an incremental bump as the Rockets still don’t have a definite solution at the five, but this team desperately needs shooting at this spot and they get it here. How this looks in the overall big picture will depend on what other moves Daryl Morey and company do after this, and Woj is reporting the Rockets are going after another Pelicans sharpshooter in Eric Gordon. The Rockets still have cap space. As it stands, I’m not convinced Dwight out and Anderson in alone has a huge impact on the bottom line but we’ll see how this shakes out.

Posted in Houston Rockets |
June 30, 2016 at 10:15 pm

Rockets land surprise meeting with Kent Bazemore

Kent Bazemore Houston Rockets

The Rockets are meeting with Atlanta Hawks free agent guard/forward Kent Bazemore tonight as free agent negotiations have started.

As first reported by Shams Charania of Yahoo! Sports, the Rockets are preparing a big pitch for Bazemore, who was not planning on meeting with any teams until July 5th. James Harden will reportedly be present for the meeting.

The 27-year old Bazemore averaged 11.6 points for the Hawks last season, hitting 35.7% from three-point range, to go with 5.1 rebounds and 2.3 assists. He’s an athletic player with upside that has a history with Mike D’Antoni from the 2013-14 Lakers.

Bazemore is going to get overpaid in free agency, without a doubt, but he would be a very good addition here. He’s a three-and-D wing who has experience defending some of the league’s best players, sporting a near-seven foot wingspan that gives opponents trouble. He also has shown to be an effective catch-and-shoot three-point shooter, a skill that would be in demand from role players alongside Harden.

Posted in Houston Rockets |
June 30, 2016 at 10:35 am

Rockets set to meet with free agent Al Horford on Friday

Al Horford Houston Rockets

It was not 100% clear who the Rockets would consider a top target outside of Kevin Durant in this free agent class, but that picture may be starting to come into focus.

The Rockets are scheduled to meet with Atlanta Hawks free agent center Al Horford on Friday, according to local Fox 26.

The 30-year old Horford averaged 15.2 points on 50.5% from the field to go with 7.3 rebounds and 1.5 blocks last season for the Hawks. The nine-year veteran started to show three-point range for the first time this past season, putting up 256 triples at a 34.4% clip. Horford had shot a grand total of 66 three-pointers in his first eight seasons in the NBA.

Horford was a college teammate of Rockets small forward Corey Brewer at Florida where the pair won back-to-back NCAA championships together in 2006 and 2007.

With Dwight Howard an unrestricted free agent, the Rockets are likely going to need some help inside. Horford is a different kind of big man, one who shot nearly 80% from the free throw line last season, which must make him look like a unicorn to Houston fans.

The Rockets declined to extend a qualifying offer to Terrence Jones, highlighting that they are placing a premium on cap space. Not to get ahead of ourselves, but an approach the Rockets are likely taking here is to get a guy like Horford early, which could make the Rockets more attractive to other free agents. Easier said than done, but they’re still hunting big game.

Posted in Houston Rockets |