Houston Rockets GM Daryl Morey says his team isn’t too threatened by potential changes to the NBA’s salary cap, which might occur due to revenue losses from the ongoing coronavirus (COVID-19) pandemic.
Even if the NBA completes its 2019-20 season at the Florida “bubble” site, as intended, it won’t be the usual 82-game schedule. The league will also miss out on ticket sales for the remainder of the regular season and the entire postseason. That will cause revenues to fall short of projections, which in turn could lead to a lower team salary cap than expected — since that figure is determined by the league’s annual revenues.
But the Rockets are in a fairly unique position, relative to most teams. The team’s top six rotation players (Russell Westbrook, James Harden, Eric Gordon, Robert Covington, P.J. Tucker, and Danuel House Jr.) are all under contract through the 2020-21 season, and five of the six are signed all the way through 2021-22. Next year, Houston will be pushing $100 million in team salary just from Westbrook, Harden, and Gordon.
So from Morey’s perspective, an unexpected dip in the league’s projected salary cap isn’t all that significant, since the team was already planning to operate above it — even at higher league revenues. This season’s salary cap was $109.1 million, with a luxury tax threshold of $132.6 million.
In Monday’s Zoom call with media members in advance of the NBA’s planned restart later this month, Morey was asked how a lower salary cap might impact the Rockets moving forward. He replied:
Our main conclusion is it’s probably not going to impact us too much. I think we have a very good, locked-in team, so we’re comfortable with it. We don’t have a lot of moving parts in terms of whether or not we’ll need cap room or not. We’re probably gonna have a mid-level [exception] in most scenarios.
Morey on salary cap (continued): "I think we have a very good locked-in team, so we're comfortable with it. We don't have a lot of moving parts in terms of whether or not we'll need cap room or not. We're probably gonna have a mid-level [exception] in most scenarios." https://t.co/u17bZjcRg6
— Salman Ali (@SalmanAliNBA) July 6, 2020
The one potential problem is that a reduced salary cap for next season could also lead to a lower tax threshold than expected. To date, the Rockets have yet to pay the luxury tax in each of Tilman Fertitta‘s first three seasons as owner, and avoiding tax payments in 2020-21 would almost certainly require ditching one of the team’s larger contracts.
But Fertitta’s comments have signaled a willingness to pay the tax for a winning team, and Houston’s future salary obligations to keep the current group together would make it almost a prerequisite to do so.
Based on Morey’s latest comments, it sounds as if that is his expectation for upcoming years with the Rockets.
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