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So the Rockets are Hard-Capped… Now What?

The Houston Rockets will face a hard cap in 2015-16. David Weiner breaks down the impact of the Montrezl Harrell signing and where the team goes from here.

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Montrezl Harrell Houston Rocket rookie

With the recent signing of Montrezl Harrell to a three-year, $3.1 million deal using a portion of the Non-Taxpayer Mid-Level Exception (MLE), the Houston Rockets finally answered a key question many have been asking over the past two months, ever since they agreed to a three-year, $10 million deal with K.J. McDaniels using a significant portion of the MLE.

That question:  Are the Rockets willing to subject themselves to a hard cap at the “apron” level ($88.74 million) by using the Non-Taxpayer MLE?

The answer:  Apparently, yes.

The Rockets now sit approximately $1.56 million below the apron level.

I addressed many of the factors surrounding Harrell’s situation in my last cap update.  Take a look at that piece for more context.  This article will focus on what the Rockets did to set up the Harrell signing and how Houston will attempt to navigate the hard cap this season.

Setting Up the Harrell Signing

Before signing Harrell, the Rockets needed to make a few moves to create a sufficient amount of room below the resulting hard cap.  This helps explain why Houston and Chuck Hayes decided not to proceed with a partially-guaranteed veteran’s minimum deal.  It may also explain why the Philadelphia 76ers ended up signing Christian Wood, who had previously agreed to a partially-guaranteed deal with the Rockets after going undrafted in the 2015 NBA Draft.  With Hayes and Wood on the Rockets’ books, it would have been difficult to give Harrell the deal he wanted.

Exhibit 9s . . . Lots of Exhibit 9s

During all this time, the Rockets still needed to fill out their training camp roster.  But in order to maximize room under a hard cap, Houston preferred to sign their training camp invitees — none of whom has a terrific shot at making the regular season roster — to a particular type of contract containing what is called an “Exhibit 9.”

Regular player contracts, even non-guaranteed contracts, still protect players from injuries suffered while playing for their teams.  A player signed to a (regular) non-guaranteed contract who gets injured in training camp continues to count against his team’s cap until he returns from injury.  An extended injury to such a player could have potentially disastrous consequences for a team right up against a hard cap.

By contrast, player contracts containing an Exhibit 9 (while still providing players with a per diem, lodging expenses and medical insurance) limit a player’s compensation to $6,000 if he gets injured.

However, in order for a team to sign players to Exhibit 9 contracts, it must have at least 14 regular contracts on its books.  But with Harrell unsigned, the Rockets only had 13 contracts once they re-signed Jason Terry.  This is where Daryl Morey and his staff got a little creative.

The Rockets apparently signed Remi Yusuf to a regular non-guaranteed contract, then followed that signing up by signing each of Will Cummings, Denzel Livingston, Chris Walker and Josh(ua) Smith to Exhibit 9 contracts.  Once Harrell signed his contract (giving the team a 15th “regular” contract), the Rockets waived Yusuf.  Had Yusuf not been waived but later gotten a season-ending injury in training camp, he could have counted as much as $947,276 towards the luxury tax and the hard cap determination, as opposed to only $6,000 under an Exhibit 9 contract.  (For what it’s worth, I have a feeling that Yusuf may be the recipient of an Exhibit 9 contract from the Rockets once he clears waivers.)

Impact on Signing Free Agents

Even hard-capped, the Rockets should still have room to add to the roster beyond just “Exhibit 9 guys.”  However, expect Morey & company to be more judicious in their signings than in years past.

The Rockets can sign a player to the veteran’s minimum, either now (for the full two-year veteran’s minimum amount) or later in the season (during which that amount prorates downward based on the number of days remaining in the regular season).

Houston still has about $1.27 million left of its Non-Taxpayer MLE it can use.  Unlike the veteran’s minimum salary, the MLE does not begin to prorate downward until January 10, making the MLE an even more attractive alternative to the minimum after the trade deadline, when several key older veterans negotiate buyouts with their former teams in hopes of latching on with a contender.

The Rockets also have a few small trade exceptions (described in my last cap update) they could use to claim a player off waivers.

With 14 guaranteed contracts spread fairly evenly across all five positions, don’t expect the Rockets to be eager to sign another player to a guaranteed deal.  They will probably bide their time and see if a good enough player “shakes loose” in free agency.

Impact on Trades

Trades are where the hard cap may have its most profound impact on the Rockets.

Even before the hard cap was imposed, Houston was subject to the more restrictive salary-matching rules for taxpaying teams, which limit incoming salary to 125% (plus $100,000) of outgoing salary.  The hard cap adds another layer of restrictions on top of that.

For instance, let’s say the Rockets have the opportunity to trade three players in exchange for one significant player.  Even if such a trade would work under salary-matching rules, the Rockets would still need to fill out their roster to meet the league’s minimum roster requirement of 13 players.  Even signing 1-2 players to veteran’s minimum salaries could push the team above the apron level and could therefore make the trade illegal.

Conclusion

The signing of Harrell has created a hard cap for the Rockets.  While this hard cap has already cost Houston guys like Hayes and Wood, it does not completely cut off any ongoing salary cap flexibility.  Trades and signings can still be made, albeit to a limited extent.  Meanwhile, Houston has locked up a first round-caliber talent to a long-term deal that will likely be a bargain in as little as one year.  This was apparently a trade-off that Morey and his staff felt was worth making.

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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.

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.

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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How a potential return of high schoolers to the NBA Draft impacts the Rockets

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2024 NBA Draft

So the opportunity for high school players to jump straight to the NBA is set to return.

According to Shams Charania of The Athletic, the NBA and Players Association are “expected to agree on moving the age eligibility for the NBA Draft from 19 years old to 18, clearing the way for the return of high school players who want to make the leap to the NBA.”

According to the report, the new age limit “would go into effect as early as the 2024 NBA Draft.”

How does this impact the Houston Rockets?

It’s tough to say right now, but looking strictly at Houston’s own picks, it doesn’t help. Granted it’s a sunk cost, but the Rockets still owe first-round picks to the Oklahoma City Thunder from the ill-fated Chris Paul-for-Russell Westbrook trade in 2019. Houston owes picks in 2024 and 2026 to OKC — both are top-four protected. They also owe a top-10-protected first-round pick swap in 2025.

The first draft that sees these new rule changes — often referred to as the “double draft” — will be loaded as both the top high schoolers and top one-and-dones will likely make themselves eligible, theoretically creating an abnormally deep and stacked draft.

The Rockets, for their part, plan to make several changes in the summer of 2023 after (hopefully) adding another top pick in the Draft and leveraging their massive cap room. That’s when they will flip the switch and making winning the top priority. They do not want to send OKC a top draft pick in 2024, but if they fall just short of the play-in or playoffs, they will still send the Thunder a very good pick if it’s the double draft.

The good news: Brooklyn. The Nets owe first-round picks in 2024 and 2026 and swaps in 2023, 2025 and 20276 to Houston — all unprotected. So for the Rockets to really benefit from the double draft, they need Kevin Durant, Kyrie Irving and the Nets to implode sooner rather than later.

A look at the picks the Rockets have over the next five years and ones they owe:

Houston Rockets Draft Picks Chart

Even though the year for the double draft is not set, the fact that it could be as soon as 2024 could make it tougher for the Rockets to acquire a 2024 pick for Eric Gordon, even if lottery-protected. Forced to guess, I think the best the Rockets will be able to do is net a 2023 lottery-protected pick from a strong team needing a boost at the deadline. Rockets GM Rafael Stone has held out for more so we will see what happens here.

All in all, the news today is mixed for the Rockets. It likely increases the value of a pick the Rockets already gave up to OKC, but it could make a pick they own from Brooklyn more valuable to use or trade. Look for the 2023 offseason to be when the Rockets really show their hand as they hope to make enough significant changes that they are catapulted into playoff contention.

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Houston Rockets Prospects Power Rankings – Volume 1

The Rockets are loaded with young prospects so let’s take a look at how they rank in order of importance to this team’s future

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Houston Rockets prospects

It’s hard to believe, but Houston Rockets training camp opens later this month and the 2022-23 NBA season is right around the corner. Like a highly-anticipated second season of a popular show, the Rockets present a surprisingly-large amount of storylines that could go in a number of directions.

The reason for that is simple: Houston, after using seven first-round picks in the last two drafts, is stocked with young talent. The upside, however, varies for each one. Here’s how I currently rank the Rocketss most valuable prospects for the future heading into camp.

12. Bruno Fernando

We don’t talk about Bruno.

11. Daishen Nix Daishen Nix Houston Rockets

I like Nix. I love what he’s doing in the G-League. I think he’s a solid point guard who is built like a tank. He has reshaped his body and clearly he’s putting in the work. He hit 30-76 (39.5%) from three in the G-League last year, which is a big improvement over his G-League Ignite season before the draft. But hitting less than 60% from the stripe for a guy who makes a living off of creating contact and getting to the line is a big issue. He’s got to make the leap from G-League dominator to Big-League contributor.

10. Usman Garuba

Garuba is capable of moving up the rankings quickly — if he’s healthy. The problem is he rarely was his rookie season, even missing Summer League in July. He’s representing Spain in EuroBasket, coming off the bench in a limited but important role. Garuba is smart and energetic, but I need his defense to shine, not just be solid. He will have every opportunity in camp to earn the backup center role. I admit I’m a little lower on him now than I was after the 2021 draft (where he was likely my favorite of the four picks, relative to position) but I still hold out hope he can be a valuable role player.

9. KJ Martin

We really don’t know what KJ Martin thinks, but we do know his father, former NBA star Kenyon Martin, wants his son out of Houston. In a way, I don’t blame him. Since the 2022 Draft, the writing is on the wall that his role could be reduced as the season goes on. Martin is a great cutter, unbelievable athlete and an improving shooter. His game is limited, however, and he will need to be playing off of great players to carve out a role as an energy athlete. Does that make him a trade candidate? Let’s see what the future holds here but my feeling is he won’t be a Rocket beyond this coming season.

8. TyTy Washington TyTy Washington Rockets

My hunch is that Washington ends up playing heavy minutes in the G-League. With KPJ starting and Nix in line ahead of TyTy for the backup role, meaningful minutes early in his rookie season are likely only to be found in the Valley. But I love what TyTy brings to the table — outside of consistent rim pressure, he can do a little bit of everything and has a good feel for the game. I expect him to be the backup, if not higher, by 2023-24. If he does go to RGV, we’ll be watching those games.

7. Josh Christopher

I try not to ever let Summer League performance impact my outlook on a prospect too much, but I confess I did just that with Jaygup. I thought he played very selfishly in Vegas when focusing on setting up his teammates would have gone a long way. He’s a tough dude with a legit NBA body for his position and has a scoring mentality. However, for a guy who drew Jrue Holiday projections from Rockets GM Rafael Stone, Christopher’s defense was fairly terrible in his rookie season. He’s got to get a better understanding of how to defend in schemes off the ball. He’s young and that part is fairly normal — that should come with time.

6. Jae’Sean Tate

I’m not sure the 26-year old Tate falls under the “prospect” category, but this is only his third season in the NBA and both the front office and coaching staff love him. Tate brings intangibles and is a valuable role player on just about any team. Can he develop a consistent three-point shot? He’s 31% from distance and that’s not going to consistently draw a defense and create space out there on the floor. This is a big thing holding him back. Given that he’s undersized, he has to improve there to unlock the next step.

5. Kevin Porter Jr.

This is the single most important season of KPJ’s career. I know it’s cliché but it’s very true in this case. We already know Porter Jr. is one of the better isolation scorers in the league and is tough for any one player to stop. We also know he showed improvement off the ball last season, hitting over 48% of his catch-and-shoot three-point attempts. But for me, success for Scoot this season in Houston won’t hinge on his scoring ability but rather how he, as the starting point, gets the Jalens and the Jabaris and the Senguns involved and puts them in positions to succeed. With a contract extension (if not signed before the season) hanging in the balance, I can’t overstate how important this season is for him.

4. Alperen Sengun Alperen Sengun Turkey

Sengun’s so happy and so are we watching him play. The man is an old-school human highlight reel. He might be the funnest player to watch on this team and his passing just wows you on a consistent basis. With Christian Wood gone, the starting center position is all Alperen’s. It’s up to Stephen Silas to leverage his unique skills on offense and allow him to conduct the show in a secondary role at times. My big concern with Sengun — and it’s admittedly large — continues to be his defense. It’s not a lack of will but simply a lack of athleticism and measurables that really hold him back. He needs to improve there to separate himself as a true starting center rather than an offensive spark off the bench, but the offensive upside here is really high.

3. Tari Eason

Eason checks nearly every single box for me. He’s built like Kawhi with a strong frame, huge hands and a long wingspan. There’s tremendous potential here as a defender, but he’s also a two-way player: He can create, he has shown improvement shooting the ball and he gets to the line. There’s no liability on either end of the floor, which is why I rank him this high. The only real question is his understanding of the game. If he takes to learning schemes, understanding sets on both ends and playing within the structure of an offense, the ceiling is much higher than just a role player here.

2. Jabari Smith Jr. Jabari Smith Jr. Houston Rockets

Jabari struggled making shots in Summer League and, surprise, surprise — that’s all some needed to project him as a disappointment. Let them run with that. This is a 19-year old who might end up being 6-foot-11, can shoot lights out and plays the game with a rare passion on both ends of the floor. While “The Locksmith” is earning that nickname, his defensive impact seems to be felt way beyond just a single assignment. Finding his way offensively will take time, however. I could go on and on about how high I am on Jabari — give me every share you’re selling. In my book, he and Jalen Green are the only locked-in core pieces in Houston at the present moment.

1. Jalen Green

Green already has an elite skill. His first step and electrifying athleticism will make it almost impossible for defenders to hang with him. In theory, he can get his shot off anytime he wants. If it becomes truly efficient? Look out. We could seriously be talking about a generational scorer here. Where he has to improve is, however, is everywhere else: Defense (both on and off the ball), handles, strength, physicality, playmaking. If his work ethic is the real deal, and it appeared to be in his rookie season, he will improve in those areas. Franchise cornerstone potential.

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Rockets to add Willie Cauley-Stein

Rockets bring backup center into a crowded Houston roster to compete for minutes at the five

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Willie Cauley-Stein Houston Rockets

The Rockets are set to sign center Willie Cauley-Stein, according to Shams Charania of The Athletic.

Cauley-Stein is expected to compete for the backup center minutes against the likes of Usman Garuba, Boban Marjanović and Bruno Fernando in training camp. Alperen Şengün all but has the starting center spot locked up.

A former high-lottery pick, Cauley-Stein was taken 6th overall by the perenially-dreadful Sacramento Kings in the 2015 NBA Draft. However, the seven-footer never met expectations placed on him after a strong freshman season at Kentucky. In 422 games over seven seasons, WCS is averaging 8.7 points, 5.9 boards and 0.8 blocks in 22 minutes a night.

It’s definitely not an earth-shattering move. Cauley-Stein was released by the Sixers last season in a move to create space to sign DeAndre Jordan, which doesn’t exactly inspire confidence. But the Rockets need options that differ from the strengths/weaknesses of Sengun and WCS has potential as a rim-running big.

There is a current issue, however: The Rockets are already at the offseason maximum number of 20 players, so they will have to release someone before making the signing official. Marquese Chriss, Trey Burke and Sterling Brown all seem like potential candidates.

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Interviewing Rockets legend Mario Elie

ClutchFans interviews the Rockets great as he tells stories from behind the scenes of Houston’s 1994 and 1995 championship runs

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Mario Elie Houston Rockets

When I started ClutchFans in 1996, Mario Elie was a big reason why. His toughness and grit was a big attraction and I even wrote a regular piece called “Super Mario’s World” that jokingly pretended to be from The Junkyard Dawg’s point of view.

So it was pretty crazy to me to get the chance to be part of an interview of the Rockets legend on Thursday.

Mario joined Lachard Binkley, host of the ClutchFans Rocket Fuel podcast, and I to discuss his career, how he worked on his game overseas, his championship runs with the Rockets, where Hakeem Olajuwon stands among NBA greats, the matchup with Michael Jordan and the Chicago Bulls as well as his thoughts on the current Rockets — as well as several other topics.

Mario didn’t pull any punches so it was a dream to get his insight on the championship Rockets. You can subscribe to Rocket Fuel on Apple and Spotify.

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