Tag: Rockets Salary Cap

NBA salary cap guru sees high variance for Rockets with 2023 offseason figures

Depending on roster decisions with current players, the Rockets can approximately generate between $45 million and $75 million in salary cap space for 2023, per @YossiGozlan of HoopsHype.

The Rockets should have salary cap flexibility in the 2023 offseason, and it comes at a good time. The ensuing 2023-24 year is when Houston’s draft-pick obligations to Oklahoma City come back into play, so the Rockets will likely want to put a winning team on the floor.

But when it comes to free agent options and trades in that 2023 offseason to upgrade the roster, exactly how much space will they have? That depends on decisions Houston makes regarding its current players.

Yossi Gozlan, NBA salary cap guru for HoopsHype, explains:

The Rockets have a high variance of cap space projections depending on their decisions. They will have their own first-round pick which could be in the Top 7, as well as the Bucks’ first-rounder this season which should be somewhere in the 20s.

Assuming those pick projections stand, they could generate around $75 million in cap space if they renounce all cap holds, including Kevin Porter Jr., and waive all their non-guaranteed players, including Eric Gordon’s $20.9 million salary. If they keep all those players, they could be looking at $45 million in space. They might be realistically looking at around $60 million in cap space by keeping Porter Jr.’s $9.7 million cap hold on the books, if he’s not extended, and waiving Gordon.

One possible silver lining, per Gozlan, is that most of the other teams projected to have salary cap space in 2023 are in the middle of rebuilds and with an organizational focus on accumulating draft picks and developing young players. “It’s possible we just get more teams rolling over their (2023) cap space, like this (2022) offseason,” Gozlan writes.

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If that’s the case, it could work to Houston’s benefit, since general manager Rafael Stone (in contrast to many rebuilding rivals) would appear to have a much greater incentive to be financially aggressive in 2023, owing to those future draft-pick obligations with the Thunder.

A complete rundown of Houston’s current player salaries is available below. A preliminary look at top 2023 free agents is available here.

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Podcast: August 2022 Rockets financial update with David Weiner

NBA salary cap guru David Weiner (@BimaThug) joins our latest podcast with a Houston Rockets financial update covering the remainder of the 2022 offseason and 2023 free agency.

David Weiner, NBA salary cap guru for ClutchFans, joins Friday’s episode of “The Lager Line” podcast with a Houston Rockets financial update covering the remainder of the 2022 offseason and 2023 free agency.

Topics discussed between Weiner and our Ben DuBose include trade aggregation options in late August involving players acquired from Dallas for Christian Wood; what Houston’s 2023 salary flexibility could bring; rotation battles to watch at 2022-23 training camp; and much more.

The podcast also dives into the stalled NBA trade market based on uncertainty involving Kevin Durant in Brooklyn and Donovan Mitchell in Utah. Once those situations are resolved, it’s possible more deals could open up around the league for teams like the Rockets.

Friday’s full episode can be listened to below. Each episode of the show is also made available via flagship radio station SportsTalk 790 in Houston, as well as to all major podcast distributors under “The Lager Line.”

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Rockets have reportedly used up their 2020-21 cash allotment in trades

Per David Hardisty of ClutchFans, the $5.6 million sent to Detroit all came out of Houston’s annual allotment for the upcoming season.

Per David Hardisty of ClutchFans, the Houston Rockets have already used up their entire cash allotment in trades for the 2020-21 NBA season.

In each league year, teams are allowed to send out up to a certain amount ($5.6 million in 2020-21) to help facilitate various deals. Houston sent out all of that money to Detroit in the massive sign-and-trade transaction that brought 25-year-old center Christian Wood to the Rockets. In theory, that cash was to compensate the Pistons for absorbing the expiring salary of Trevor Ariza, a less desirable player. Ariza’s salary had to be fully guaranteed for the trade to work under the league’s salary cap.

The Rockets did not use most of their 2019-20 cash allotment — and when part of the eventual Wood trade was agreed to on draft night (Ariza and the No. 16 overall selection for a protected future first-round pick), some fans had hoped that Houston might use its funds from the 2019-20 pile and save the 2020-21 allotment for a future deal. After all, the NBA’s annual draft is considered part of the previous season’s league year.

However, when Ariza’s contract was used to facilitate the Wood sign-and-trade by expanding the original agreement, it became clear that the cash would have to come out of Houston’s 2020-21 allotment.

Wood was not a free agent until the 2020-21 league year, so the transaction could not be backdated. And since the Rockets were and are well above the NBA’s salary cap, they could not have given Wood his three-year, $41-million deal without a sign-and-trade transaction.

With cash now unavailable, new Rockets GM Rafael Stone will have to use player or draft assets as sweetener for any trade proposals over the remainder of this league year. That could make the acquisition of young prospects — such as Friday’s sign-and-trade deal with New York for recent second-round pick Issuf Sanon — particularly important this year.

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Contract tidbits for Sterling Brown, Jae’Sean Tate, and Bruno Caboclo

Brown has a straight-forward minimum contract with the Rockets, while the terms for Tate and Caboclo are a bit more complex.

Courtesy of NBA salary cap experts Bobby Marks (ESPN) and Keith Smith (Yahoo Sports), we now have new details regarding three recent contracts given out by the Houston Rockets in the 2020 offseason.

Per Smith, the contract to guard Sterling Brown — formerly of the Milwaukee Bucks — is very straight-forward. It’s for one season at the minimum salary, and it is already fully guaranteed.

The new contracts for Jae’Sean Tate and Bruno Caboclo, however, are a bit more complicated. Per Marks, both Tate and Caboclo only have $50,000 guaranteed, which gives the team flexibility if they decide to go in a different direction with one of those roster spots at a later date.

Caboclo’s deal becomes fully guaranteed if he is not waived by the first game of the NBA’s 2020-21 regular season (Dec. 22), while Tate’s contract guarantee will increase to $500,000 at that time.

Caboclo’s contract is for two seasons in total, while Tate’s deal is for three. However, all of the future years are non-guaranteed. This gives the team a number of potential paths moving forward, depending on the level of play shown by both players and also the state of the overall roster.

Led by new GM Rafael Stone, Houston used a portion of its mid-level exception (MLE) to give Tate the three-year deal, which is not allowed under minimum exception contracts. There are several reasons for this.

One potential reason is that Tate’s first-year salary is $1,445,697 — typically the minimum for a player with one year of NBA experience — instead of the standard NBA rookie minimum of $898,310. In other words, it’s a higher salary for the rising 25-year-old prospect.

However, another plausible reason is that the three-year deal makes it harder for other NBA teams to claim Tate on waivers, should the Rockets decide they need his roster spot to acquire someone else.

“By giving Tate three years, it makes him ineligible to be claimed by a team using the minimum exception if Houston waives him,” Smith writes. “By giving Tate just $50,000 guaranteed, it makes him eligible for a two-way [contract] with Houston, if he is waived.”

With Houston subject to a hard salary cap after the sign-and-trade acquisition of Christian Wood, the Rockets are already close to their maximum team payroll. However, should a player they like (Glenn Robinson III?) come available at a later time, the unique terms in Tate and Caboclo’s deals could give the team additional roster flexibility.

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Rafael Stone: Rockets have no spending limits from Tilman Fertitta

“We’re extraordinarily lucky for that to be a non-issue, because not every organization is in that spot,” Stone said. “But we are.”

In an introductory press conference, new Rockets GM Rafael Stone pushed back on critics of owner Tilman Fertitta, whose spending habits with regards to Houston’s roster have recently been called into question.

Stone, who was the team’s No. 2 basketball operations executive last season after Daryl Morey, said some moves were misconstrued as being about cost-cutting, when they were actually about something else.

In response to a reporter’s question on Thursday regarding Fertitta’s willingness to spend this offseason, here’s how Stone responded:

I actually think that’s a bit of a misnomer. To be clear, I’ve always been in the room, this entire time. I’ve been in on every conversation that’s been had between Tilman and Daryl, or Tad, and everybody. Tilman has never once said that he’s not willing to spend, if spending results in winning. That’s been consistent.

He reiterated to me upon being hired that his priorities were winning first, second, and ad nauseam. Money, not so much. I do think sometimes that on the personnel side, we have rules within the NBA. The salary cap and luxury tax, if you’re in them… they actually limit your flexibility. I think sometimes people think that you don’t want to be in it because of cash, when often times, it’s because it results in being hard-capped and limits your flexibility at the trade deadline, or something else.

I know that to be a non-issue for this organization. We’re extraordinarily lucky for that to be a non-issue, because not every organization is in that spot. But we are, and we always have been. That’s the honest answer.

Previous media reports stated that Fertitta has authorized the Rockets to spend the taxpayer Mid-Level Exception (MLE) in this upcoming offseason, which started at an annual salary of approximately $5.7 million last season. (This year’s levels have yet to be finalized.)

While there is a larger non-taxpayer MLE (worth over $9 million last year) potentially available to above-the-cap teams, such as Houston, the usage of that MLE would trigger a hard salary cap. Stone’s comments suggest that the rigidness of a hard cap concerns the Rockets, which is why using the taxpayer MLE appears to be their plan this offseason.

Thursday’s press conference can be viewed in its entirety below.

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Rockets luxury tax update after waiving Gary Clark

Although the Rockets are slightly above the luxury tax, there are factors that should make them operate as if they are much more above it.

The Houston Rockets waived forward Gary Clark on Tuesday ahead of the NBA’s salary guarantee deadline. He only appeared in 18 games this season and was in and out of the rotation.

Clark’s 2019-20 salary was only 50% guaranteed. Had he not been waived today his $1.4 million salary would’ve become fully guaranteed. Guard Ben McLemore and center Isaiah Hartenstein both are now fully guaranteed for the rest of the season.

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Clark leaves the Rockets with a $708,426 dead cap hit, bringing them from $1.2 million over the luxury tax down to about $331,000.

Houston Rockets current cap sheet after waiving Gary Clark and fully guarantee Ben McLemore and Isaiah Hartenstein.
Houston Rockets current cap sheet after waiving Gary Clark and fully guarantee Ben McLemore and Isaiah Hartenstein.

The Rockets need to reduce much more payroll than the figure they are over the luxury tax by if they are to stay under it by the end of the season. Although the Rockets are slightly above the  tax, there are factors that should make them operate as if they are much more above it.

For starters, center Clint Capela has $2 million in incentives that he can earn. He can earn $500,000 if he plays 2,000 minutes and finishes with a 30% defensive rebounding rate, and $1 million if the Rockets reach the 2020 Western Conference Finals.

Capela currently has a 31.6% defensive rebounding rate as of January 7 and has played 973 minutes in 29 of the team’s 35 games, according to Basketball-Reference. If he earns both incentives, that would increase his cap hit by $1.5 million. This means the Rockets, as currently constructed, can consider themselves $1.8 million over the luxury tax.

One thing that feels certain is that veteran center Nene will be traded. He is eligible to be traded on January 15, and clearing his $2.6 million base salary would bring the Rockets from $1.8 million over the tax to $734,000 below it. This leaves them with tight flexibility for the rest of the season to fill their last one or two roster spots, which they could do through either 10-day contracts or pro-rated minimum deals while avoiding the luxury tax with Capela potentially earning $1.5 million in incentives.

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A second trade would give them a lot more flexibility below the tax line. They can trade one of Gerald Green (who has trade veto power), Thabo Sefolosha, or Tyson Chandler, all of whom have a $1.6 million cap hit. If they were able to trade one of them, Houston would further increase their luxury tax cushion to about $2.4 million.

Initial indications are that GM Daryl Morey wants to use Clark’s open roster spot to bring in an impact player, perhaps sooner rather than later. If such a move happens in January, that could require a second trade.

There are several ways the Rockets can go about evading the tax while filling out the roster. They generally all lead back to the same road, but the route they take will become clear once the trade deadline passes.

Rockets luxury tax update after waiving Ryan Anderson

The Rockets are now carrying fourteen players on the roster. If they finish the season with the exact same roster, they would be $178,984 above the luxury tax for a tax payment of $268,476.

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The Houston Rockets waived forward Ryan Anderson on Monday. He only appeared in two games and did not play after Nov. 3.

Anderson was only guaranteed $500,000 after making the team’s opening night roster. The Rockets could have kept Anderson for four more days before his salary would’ve exceeded his guarantee, but they decided to part ways with him now.

The Rockets are now carrying 14 players on the roster. If they finish the season with the exact same roster, they would be $178,984 above the luxury tax for a tax payment of $268,476.

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The Rockets can get below the tax by trading some of their minimum-salaried players by the deadline and then signing new players on pro-rated deals. This was a practice they engaged in last season in order to completely avoid the luxury tax.

Nene, who was signed in order to be used as trade fodder, is widely expected to be traded once trade-eligible on January 15, 2020.

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One factor that can complicate the Rockets pursuit of avoiding the luxury tax is if Clint Capela earns some or all of his incentives. He has three incentives that can boost his salary by up to $2 million. Right now, he is on a rebounding tear and is on pace to have at least a 30 percent defensive rebounding percentage (currently at 33 percent per Basketball-Reference), which would give him an extra $500,000. He also must play at least 2,000 minutes to meet the criteria.

Two-way player Chris Clemons, who is in the rotation after playing in eight of the team’s last nine games, is a candidate for the 15th roster spot. The Rockets could run out his two-way clock and then convert him onto the regular roster with a prorated minimum salary.

The Rockets could trade both Nene and Gerald Green and have about $4 million in space below the tax. That should be plenty to work with for converting Clemons onto the regular-season roster, filling minimum roster requirements with 10-day contracts, and ultimately signing free agents to rest-of-season contracts while leaving some room for Capela’s potential incentives.

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