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Houston Rockets Salary Cap Update: 2022 Offseason Pre-Draft Edition

Houston Rockets Salary Cap Update

Houston Rockets

Houston Rockets Salary Cap Update: 2022 Offseason Pre-Draft Edition

Breaking down the Rockets salary cap situation as they head towards the 2022 NBA Draft

Year 2 of the rebuild is in the books. While the Houston Rockets had the league’s worst record for a second straight season, there was much more hope and excitement this season. The youth movement in Houston is fully underway, led by scoring dynamo Jalen Green.

With their season now over, GM Rafael Stone and the Rockets must look to the offseason for ways to improve their roster and optimize their rebuild.

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 2022-23 season (assuming that the league’s current projection of a $122 million salary cap is accurate):

Player salary commitments: John Wall ($47.4 million, likely), Eric Gordon (19.6 million), Christian Wood ($14.3 million), Green ($9.4 million), David Nwaba ($5.0 million), Alperen Sengun ($3.4 million), Kevin Porter, Jr. ($3.2 million), Usman Garuba ($2.5 million), Josh Christopher ($2.4 million), Garrison Mathews ($2.0 million), Jae’Sean Tate ($1.8 million, team option), K.J. Martin ($1.8 million), Daishen Nix ($1.6 million), D.J. Augustin ($333,333 dead cap hit), and in the final year of its application, the long-since-waived Troy Williams ($122,741 dead cap hit).

Cap holds: Dennis Schroder ($7.1 million – Rockets hold only Non-Bird rights), Bruno Fernando ($2.2 million – Rockets hold full Bird rights), Trevelin Queen ($1.6 million – coming off a two-way contract), Anthony Lamb ($1.6 million – coming off a two-way contract), and Michael Frazier ($1.6 million – cap hold never waived).

Other Salary Cap Exceptions: If Houston operates over the salary cap this summer (extremely likely), the Rockets will have access to the Non-Taxpayer Mid-Level Exception (NT-MLE, expected to be around $10.3 million, the use of which would impose a hard cap at the “apron” level – currently projected at about $155.7 million). Although it would also impose a hard cap at the apron level, Houston could possibly use the Bi-Annual Exception (BAE, expected to be around $4.1 million), since they did not use it last summer. In the unlikely event that the Rockets use cap room this summer, they could instead have the Room Exception of around $5.3 million at their disposal. Assuming they operate over the salary cap, the Rockets will also have a small ($608,000) traded player exceptions (TPE) left over from the Daniel Theis trade, although it is highly unlikely to be used (or even usable).

Given their salary commitments, Bird rights to their free agents and additional cap exceptions available to them, the Rockets should operate over the cap for the 2022-23 season. Barring trades, the Rockets will be at least $5 million over the salary cap.

Preliminary Internal Decisions

Ahead of the NBA Draft and the subsequent free agent season, Stone and his staff will need to address some internal matters.

The two biggest no-brainers of Houston’s offseason will take place before the end of June: (1) Wall exercising his $47.4 million player option and (2) the Rockets exercising their $1.8 million team option on Tate.

With so many roster spots already occupied for next season, it is unclear whether the Rockets will attempt to retain Fernando, who can be made a restricted free agent by extending him a $2.2 million qualifying offer. Right now, the odds of the Rockets committing that offer to Fernando are fairly slim, although Fernando played pretty well in a limited role down the stretch.

The Rockets can make each of Queen and Lamb – coming off two-way contracts – a restricted free agent by extending them another two-way contract for next year (with only a small salary guarantee) as a qualifying offer.

Draft Night

Paolo Banchero Houston RocketsThe Rockets will enter the 2022 NBA Draft with the 3rd overall pick (their own) and the 17th overall pick (via the Brooklyn Nets). They are without their own second rounder (31st overall), which was traded away in the 2019 salary dump of Brandon Knight for Iman Shumpert. Houston will also have about $4.5 million in remaining cash available to buy draft picks, having already spent some cash in trades for Theis and Sekou Doumbouya this past season. (Credit Rockets ownership for spending over $3.7 million in salary and cash in the Doumbouya trade last fall to acquire an unprotected 2024 Brooklyn Nets second rounder.)

While trades up, down or out (for an established player) are still on the table, the most likely scenario has the Rockets staying at #3 and selecting Duke power forward Paolo Banchero, perhaps the most league-ready player in the draft and an early favorite for Rookie of the Year.

At #17, trades up, down or out are much more likely. However, if the Rockets stay at #17, expect them to take the best player available on their draft board, regardless of position. Still, all else equal, Houston would probably love to get another wing defender with size or a rim protector with length.

While spots on the 15-man roster are hard to come by for next season, don’t be shocked if the Rockets try to deploy some of their remaining cash to buy a draft pick in the late 40s or the 50s if there is a player they like who is willing to be stashed overseas for a year or two. Especially with the Rockets expected to have a massive amount of cap room in 2023, having a second round pick (as opposed to an undrafted free agent) to add for the rookie minimum that summer would help maximize their cap room.

Of course, as is standard operating procedure, look for the Rockets to pursue a handful of undrafted free agents for their summer league team, training camp and possibly two-way contracts for next season.

Internal Free Agent Decisions

Houston will have some decisions to make with its own free agents heading into July.

Dennis Schroder: After taking a major hit to reputation over the past couple of seasons, Shroder did a noble job as a veteran presence for the young Rockets down the stretch this season. However, both sides will likely part ways this summer. Shroder will look for a starting (or key backup) point guard role on a playoff team. Meanwhile, the Rockets will probably look to give backup point guard minutes to Nix and/or one of their new rookies.

Bruno Fernando: Even if the Rockets don’t extend a qualifying offer to Bruno, they could still bring him back this summer via full Bird rights. Still, it would probably require a trade moving out Wood or another big to open up a roster spot for Fernando.

Trevelin Queen: Queen just had one of the greatest seasons in G-League history. MVP. Finals MVP. All-Defense Team. With a qualifying offer potentially costing the Rockets very little in guaranteed salary, it would seem foolish for them not to extend a qualifying offer to Queen. Expect him to be in a similar position to Armoni Brooks last summer, a restricted free agent who ultimately accepts the two-way qualifying offer before playing well enough to earn a multi-year standard NBA contract. If a trade opens up an extra roster spot on the wing, Queen seems a likely contender to take that spot.

Anthony Lamb: While not receiving the same accolades as Queen, Lamb had an excellent all-around season for the RGV Vipers this season. Even if he is ultimately cut from one of the two-way spots in favor of an undrafted rookie, Lamb has probably earned the small investment it would take to potentially keep him in the fold this summer and into this fall. At the very least, Lamb would be a nice addition to training camp.

Outside Free Agents

Mo BambaDue to the shortage of roster spots – and the team’s goal to have significant 2023 cap room – it is unlikely that the Rockets will be as active in free agency as they’ve been in years past. However, armed with their full NT-MLE, they could possibly acquire a real contributor via free agency if they so choose.

One possible free agent who could slip through the cracks and could be a contributor for the Rockets next season is Mo Bamba. Orlando must extend Bamba a $10.1 million qualifying offer in order to make him a restricted free agent. Given the presence of Wendell Carter, Jr., Jonathan Isaac (expected back from injury) and presumptive top pick Jabari Smith (or Chet Holmgren), there’s a decent chance Orlando doesn’t elect to make that financial commitment to Bamba.

At 7-1 with a ridiculous 7-10 wingspan and 9-7 standing reach, Bamba would provide the length and rim protection that is missing from the current Rockets roster. Bamba also shot 38% from 3-point range this season, an impressive percentage from a big man. While his stats this season (10.6 points, 8.1 rebounds, 1.7 blocks in 25.7 minutes per game) don’t necessarily jump off the page, and while he certainly comes with a little risk, 24-year-olds with Bamba’s physical tools don’t often hit unrestricted free agency.

Especially if Houston trades Wood this summer, they should look long and hard at Bamba for most/all of the NT-MLE. He could come in and start at center, with Sengun being the higher usage sixth man dominating second units. Meanwhile, they could let Bamba take those early game lumps against other teams’ starting centers. The promise of (or at least the chance to compete for) a starting spot could entice Bamba enough to sign for a little less than some other offers. (And yes, the Longhorns connection doesn’t hurt, either.)

Of course, Bamba isn’t the only free agent out there who could help the Rockets. But that list is probably a short one for a team expected to keep enduring growing pains next season with its many young players.

Conclusion

Entering Year 3 of the rebuild, no one is expecting the Rockets to contend for a playoff spot, let alone a championship. However, with a burgeoning core of Green and (probably) Banchero, the hope and excitement from last season should continue to grow. The franchise is aiming for a brighter future ahead.

Here’s hoping it comes soon.

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