Window officially opens for Rockets to trade Nene’s contract

As of Wednesday, Jan. 15, Nene is eligible to be traded by the Houston Rockets. Here’s a look at why he almost certainly will be.

As of Wednesday, the Houston Rockets are officially able to trade veteran center Nene — which they likely will do by the Feb. 6 trade deadline.

Unlike most offseason signings, who became trade eligible on Dec. 15, Nene was re-signed to his $2.6-million contract for this season with Bird rights. This meant that he could not be traded until Jan. 15, 2020.

Over the last three seasons with the Rockets, the 37-year-old Nene has averaged 6.8 points (58.6% shooting) and 3.6 rebounds in 15.5 minutes per game as the team’s backup center.

There are several reasons why a trade appears inevitable. For starters, the Rockets are currently above the NBA’s luxury-tax line, and it seems unlikely that Houston would pay extra payments on a player who has yet to even play a single game for them this season.

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Nene has been away from the team with what the Rockets have called a chronic strain to his left adductor, and even if he was healthy and available, he’d be fourth on the team’s depth chart at center behind Clint Capela, Isaiah Hartenstein, and Tyson Chandler.

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In other words, it’s extremely unlikely that the Rockets will make tax payments and keep a roster spot occupied for a player who isn’t in a position to make any major contributions to the team.

There’s also the matter of Nene’s contract, which was clearly drawn up with trade considerations in mind. Though the NBA lowered the deal’s outgoing trade value due to the controversial bonus structure, his $2.6-million salary is still potentially useful, even at that base rate.

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That’s because the Rockets don’t have much in the way of “filler” salaries to make the math work on potential trades to upgrade their team. With Houston well above the league’s 2019-20 salary cap, they have to send out close to as much money in trades as they take in to make them permissible under the NBA’s Collective Bargaining Agreement (CBA).

Of the team’s larger salaries, most seem to be indispensable pieces to their title chances, and Eric Gordon isn’t eligible to be dealt this season at all after signing a contract extension in September. That prevents any trades for six months, and that period runs beyond the Feb. 6 deadline.

Even among the smaller salaries, guards Austin Rivers and Gerald Green have veto power on potential trades, since they were re-signed using Early Bird rights to one-year deals. That rule doesn’t apply to Nene, since there is a second-year option on his current contract.

Thus, Nene is one of the most tradable salaries the team has — both from a math perspective, and his lack of importance to their success.

Finally, there’s the matter of that second-year option for the 2020-21 season, which kicks in as fully guaranteed if Nene isn’t waived by Feb. 15.

In other words, even if the Rockets did somehow see a scenario where Nene could help the current team, it’s extremely unlikely that they would want to guarantee his contract for next season at 38 years old.

Thus, if they’re going to move on from Nene by mid-February no matter what, there are more advantages to a trade than a release.

In a perfect world, Nene’s salary could be used to help match salaries on a deal that brings in an upgrade to the current rotation. That obviously couldn’t happen if he had been released earlier in the season.

But even if a move for a rotation upgrade isn’t in the cards, it’s still financially advantageous from a tax perspective to dump Nene to another team and let them release him, instead of the Rockets.

This is what GM Daryl Morey did in January 2019 with a pair of deals sending Carmelo Anthony and Michael Carter-Williams to Chicago, where they were subsequently released.

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The Rockets do still have the majority of their $5.6-million annual cash allotment, which is not taxed, to incentivize another team to help them out in such a scenario. That’s what helped enable the Anthony and Carter-Williams trades with the Bulls a year ago.

In Nene’s case, whether it’s a straight salary dump to try and avoid the luxury tax altogether or part of a larger deal for a rotation upgrade, the reality is that a deal is almost certainly coming. Jan. 15 opened the window, and now Morey has just over three weeks until the deadline on Thursday, Feb. 6 to figure out the best course of action.

The safe bet is on a deal coming to fruition in the final week, with Morey and the Rockets keeping their options open on whether Nene can potentially be used for more than merely tax savings. Waiting would also lower the remaining salary owed from the team acquiring Nene, which could in turn reduce the cash payments needed to facilitate a deal.

The bottom line: Nene trade season is officially underway in Houston.