Trade analysis: Assets the Rockets acquired for Robert Covington

With Trevor Ariza and Portland’s 2020 draft pick redirected to Detroit, here’s what the Rockets ultimately acquired for Robert Covington.

Late Monday, the Houston Rockets agreed to trade frontcourt starter Robert Covington to Portland for Trevor Ariza, the No. 16 pick in the 2020 NBA draft, and a protected first-round selection in the 2021 draft.

On Wednesday, the Rockets then traded two of those three assets (Ariza and the No. 16 pick) to Detroit for another protected 2021 first rounder.

By dumping Ariza’s salary slot of over $12 million (comparable to what Covington made), Houston dips beneath the luxury tax “apron” level by enough to use the full mid-level exception (MLE) in free agency, which is worth ~$9.3 million in starting salary. Using the full MLE implements a hard salary cap at the $138.9 million “apron” for team payroll.

Had Houston kept Ariza or Covington, they would have been limited to the smaller “taxpayer” MLE (~$5.7 million), since using the full MLE would have then pushed their total payroll above the hard cap. The Rockets reportedly believe that they can sign a “significantly better player” in free agency with the full MLE than with the smaller version.

The Rockets will also generate a $12.8-million traded player exception (TPE) in the deal, since Ariza is being absorbed into cap space by Detroit. However, Houston probably can’t use the full TPE and the larger MLE this offseason, since using both would likely exceed the hard cap.

Depending on future moves made by Rockets GM Rafael Stone that might alter team payroll, that TPE could potentially prove useful down the line. (The TPE will last until an equivalent point in the 2021 offseason.) Or it could be used in the interim, but in a smaller amount.

In essence, by combining all the trades and implications for free agency, here’s what the Rockets got in exchange for Covington — regarded around the NBA as of their best and most versatile defenders.

Going out:

— Robert Covington (30 years old; 11.6 points, 8.0 rebounds, 2.2 blocks per game last season)

Coming in:

— Ability to use full MLE ($9.3M) instead of taxpayer MLE ($5.7M)
— 2021 Portland first-round pick (Top 14 protected in 2021, unclear beyond then)
— 2021 Detroit first-round pick (Top 16 protected in 2021-2024; Top 10 protected in 2025-2026; Top 9 protected in 2027; multiple second-round picks if still not conveyed then)
— $12.8M TPE until late 2021 (While Houston may not be able to use the full amount in tandem with the larger MLE, at least for now, there are other benefits.)

While both of the protected future first-round picks via Portland and Detroit are likely to convey to Houston at some point, the most likely scenario is that they will come in the middle of the round.

The Rockets reportedly believe those future picks could have more value in trade talks around the league, as opposed to a prospect that has already been selected (i.e. had they kept No. 16 or acquired another 2020 pick), per Jonathan Feigen of the Houston Chronicle.

Basically, the Rockets gave up the certainty of Covington for the upside of being able to spend more aggressively in free agency, along with the value of those two future picks on the trade market. (Or, if the Rockets eventually trade James Harden, perhaps they keep those picks and use them to kick off their own rebuilding effort.)

Is that a worthwhile move? It depends on who the Rockets sign in free agency and what happens with those future picks. In short, stay tuned.

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