[BimaThug] Houston Rockets Salary Cap Update: 2018 Offseason Pre-Draft Edition

I assume this doesn't include Trae Young's contract. Initially, I was thinking about a Capela for Schroeder trade in case Chris decides to leave Houston. I think Atlanta might look to acquire Kemba for Dennis. Trae isn't ready to be a starter for a long time. I do think that Schroeder wants to play for a contender though. I could see him wanting to play with Harden, if Chris unexpectedly leaves Houston.

 

i'm not a very big fan of schroeder -- his bb IQ and often questionable shot selection in particular. plus not a good 3pt shooter

 

Chris isn't leaving, and even if he did, Schroder isn't a good fit next to Harden

 

@BimaThug,

I have a question about possible "new math" and the stretch provision. Could the Rockets try and use the stretch provision on Anderson's contract?

The initial paperwork would set in motion payments of around $8 million over 5 years. But if Anderson signs with another team, which he undoubtedly would, wouldn't that substantially improve the Rockets cap position? The CBA mentions that the original team "can pay up to one-half the difference between the player's new salary."

Anderson's new contract (say with Phoenix, to pick an arbitrary team) might be 3 years and $18 million. Rather than owing Anderson $40 million over 2 years (our current position) or stretching that into new $8 million payments, wouldn't the Rockets only owe him $3 million a year? And if he signs for less, doesn't the set-off only get better for us? That contract would be such a bargain for the new team because they would only have to pay for 1/2 that on their books. In one fell swoop, Anderson's contract would become the cheapest veteran contract in the league.

If this is the case, isn't this the easiest way to unburden ourselves of his contract? The only risk would be if Anderson simply retires to cash is $8 million a year. But I see him wanting to play a little longer.

Let me know if I don't have the facts straight.

 

Not quite.

Here's Larry Coon's explanation of "set-off"

If another team signs a player who has cleared waivers, the player's original team is allowed to reduce the amount of money it still owes the player (and lower their team salary2) by a commensurate amount. This is called the right of set-off. This is true if the player signs with any professional team -- it does not have to be an NBA team. The amount the original team gets to set off is limited to one-half the difference between the player's new salary and the minimum salary for a one-year veteran during the season in which the player is waived (if the player is a rookie, then the rookie minimum is used instead).


In your scenario, we stretch the remaining $40M owned to Anderson over 5 years for $8M/yr. You're example had Anderson signing with Phoenix for a starting salary of around $6M/yr. The setoff would be ($6m - 1 yr vet min)/2 .

That's $6M - $1.3M (this is last years number) = $4.7M /2 = $2.35M


That means that the Rockets would only owe Anderson $8M - $2.35M = $5.65M


The net would be that Anderson would actually be getting $5.65 (from Rockets) + $6M (from Phoenix) for $11.65M total. Basically, whatever a stretched player signs for (after being stretched), the player banks an additional amount just under half of their new salary.


The downside to using the stretch provision is that you end up with dead money hitting your salary cap for several years. Under your scenario, we'd have $8M in dead money for each of the next 5 years.

 

QFT. It only makes sense to open cap space (like the Lakers could do with Deng). But for a team over the cap, it only helps reduce luxury tax pain.

Anderson will be moved in some capacity.

 

Thanks for the correction on what we would owe Anderson.

I guess what I'm wondering is what the hit would be on the Rockets books against the cap after Anderson signs a new deal with a new club. If he signs a reasonable contract (thus, new math) after we stretched his deal, do we still have to count $8 M against the cap?

To put it differently, would the Rockets cap hit be $5.65M over three years? Or would the presence of new math overwrite that $8 M over 5 years that we would have originally created?

Either way, I think a stretch approach (or this new math, if it would actually would work) seem better than paying luxury tax dollars for Anderson.

 

Good point.So, we'd reduce the amount to just over $7M for the next 5 years.

 

See Bima's correction. We only get to reduce salary for 2 years since there's only 2 years left on the deal. That would be a total of $4.7M in setoff but it would be stretched over the 5 years of payments. So, that's $4.7M/5 = $940K reduction for the Rockets. They'd still end up with just over $7M in dead money for the next 5 years.

 

Thanks for answers. As we're sitting around waiting, I'm simply trying to figure out what "new math" might mean. Doesn't sound like it would involve stretch provisions.

 

what morey is waiting for

 

NBA imbalance..

 

Gianis will be on that list soon enough.