[ClutchFans] BimaThug: Houston's Future: Dollars and Sense

On a side note I was looking up facts on Trades/Salaries, etc etc. When I stumbled upon this Gem..

Sachin Gupta, architect of the ESPN trade machine,

Sachin actually works for the Rockets and his current role is: "Basketball Operations & Salary Cap Analyst"

I'm having full confidence DM can pull off any trade now

 

BimaThug,

As you mentioned Amare, I have the same question as CheezeyBoy22 who posted in this thread. Why do we need a overpaid PF? Scola is ok if Yao is healthy. This team only need Amare if Yao can not play anymore. I do not how we manage the money for Amare (asking a max), Yao (a less max), Martin ($11M). Maybe the team does not believe Yao will be healthy again, give him a MLE (a smile).

 

I, personally, could not agree more with your assessment of Amare and how the Rockets would be better off without him. But I'm not Daryl Morey, who presumably made a serious run at acquiring Amare. If Morey and I are in disagreement on a player, I will humbly defer to Morey's judgment.

At least until Morey finally gets one wrong. But I'm stilling waiting for that to happen.

 

I think Morey and the Rockets just want a PF that can slide into the center position either when Yao is taking a breather or if he's out for injury. We've seen time and time again when Yao went out of the game, the team had fallen apart while he was out. I think that's their logic but I could be wrong.

 

Les is a multi-millionaire. He can afford it.

 

Bima, let me just say I have mad mad respect for you. Fantastic read, you are such an important part of clutchfans.

Lets hope that Les's willingness to take these risks and pay the tax pays off. Hopefully we land Bosh if that's what Morey's target is, and become contenders once again. This certainly tells me that Les wants to win, and I for one am more than happy we have him as an owner, and he had the foresight to step out of the box and hire Morey.

From you I have learned so much about the financial side of this business, that I am now applying it trying to get my friends to understand the things the Rockets can and cannot do, so sincerely thanks again. You and a handful of others are why I frequent this site. Damn I love this team and damn I'm glad we have clutchfans

 

I learn something new every time I read one of your posts.

 

Great read. Clearly, as would seem obvious, money equals championships. Attempting to play "moneyball" is all good and fun, but its showing again and again it just does not work well.

This article makes me want to research the economic and other policies of other sports. I think you'd have to be pretty damned naive to believe that the NFL is magically making billions of dollars a year without lenient policies on performance-enhancing drugs, illicit drugs, and lax salary implications. Same with MLB.

Maybe the NBA is too strict? Or is just the most fair.

 

Yeah I saw that too. But there's no denying the fact that Morey pursued Amare two years in a row, even though our insiders told us he did not want to play for Houston.

Why would Morey do this?

I can only assume he's wiling to offer Amare and the max and feels like a lot of teams won't be so willing. If Miami offers the 2nd max to Amare, they will have no room to sign any additional players. They would have to fill out their roster with league minimum guys. That means they would essentially have:

Chalmers/Wade/?/Beasley/Amare with Cook and their 2010 1st rounder factoring in. In other words, is it really that smart for Miami to offer him the max? I don't think that competes for a championship - they are severely lacking in the depth department. Miami might be better served to use that 2nd max money on multiple players.

Miami has said to been Amare's first choice. If he outright signs with them, he's losing $30M off the table. Morey might feel like Houston is in the best position to offer him the best team + "true maximum salary" -- aka sign-n-trade with Phoenix.

 

All I learn is how much I don't now every time I read his posts. :grin:

 

Yes, he has lots of money, but I do not think he is going to spend money like the Dallas owner, so we could end in no any good role players after three big spending.

 

after reading that i just want to know what happened in the 2010-2011 season?

 

Great stuff Bima.

Some questions.

First, when does the cap threshold set in? I'm fairly certain it isn't the beginning of the year. It seems to be after the trade deadline, right? Which means DM would have a bunch of time to get under the cap during next season.

Along those lines, while it wouldn't be ideal, and maybe not even possible, but couldn't they also "dump" salary by off-loading some players to teams that are under the cap? Kind of like the Ronnie Brewer trade to the Grizzlies?

Shane would be the key contract here, in that he has actual value as a player that is somewhat commensurate with his contract. If Shane continues to be less than what he once was, you could trade him at the deadline to a team under the cap. Same with Jeffries, right? DM could try and move Jeffries + a first rounder (say Rockets 2012) in return for a second rounder to a team that is under the cap right at the trade deadline.

It wouldn't be all that great trading a pick in order to get under the cap, but with all the picks now accumulated, if doing so allows you to resign your players, use your first rounder this year, and potentially even sign an MLE type player, it is probably a smart thing to do.

Using the Jeffries trade as an example, while it might not get them completely under the luxury tax, it would save them the remainder of Jeffries contract for next year plus the full amount of his contract in luxury tax penalty - so $7 million plus. One could even envision a scenario where the Rockets offer enough "sweetner" - maybe add a couple million cash, so that they could offload Jeffries sometime during training camp to a team like the Clippers or TWolves, who might just need a body, could be tempted by the future pick, and will have some of Jeffries salary paid for with the cash in the deal. If Les sent over $2 million in cash, as an example, they'd save about $12 million in total payments to Jeffries (the other $5 million in salary due him + the $7 million in matching luxury tax payments), at the cost of a future first round pick. It's a heavy cost, but one that might allow them to take the $12 million in savings and invest $5 million of it into an MLE player.

Does this make sense?

 

Great read...really answered all questions i had, thank you's to Clutch and Bima for this great article

 

BimaThug, considering that the Rockets seem willing to go well over the luxury tax limit next year, does that change your thinking at all on how sensible it would have been to trade for Iguodala/Dalembert?

 

Cash in a trade counts as $0 in salary cap calculations. So, it can't be filler.

I don't see how this trade nets Bosh. If Toronto loses Bosh, they want potential, not grizzled vets. So, Scola and Battier are too old to be desirable. If we get Bosh plus our other guys, our picks won't be too valuable. The Knicks picks might be valuable, but they may end up doing well with their cap space and then those picks won't be worth much either.

 

Great question. Especially since the analysis is Iggy/Dalembert/Landry vs. Martin/Hill/Potential Lotto Picks.

 

The salary cap and the luxury tax threshold for the 2010-11 season will be known sometime between July 1 and July 8, 2010. THAT is why there is a week-long moratorium on free agency and trades. It's so that the league lawyers can properly tabulate these figures once all league revenues are known.

The luxury tax for the 2010-11 season will not be assessed, however, until July 1, 2011. The amount of tax payable by each team is determined by basically taking a snap shot at the team's total salary as of the end of the regular season. So, (a) if a player is waived during the season and not claimed off waivers, his full salary counts against total team salary; (b) if a player is bought out, his buyout amount (subject to some technical apportioning rules) is what counts against total team salary; and (c) most importantly, if a player is traded, NONE of his salary counts against the cap (only the full salaries of the players traded for will count).

Yes, trading either Shane or Jeffries will be something that the Rockets will definitely look into. Just remember, however, that it will come at a price. You mentioned a 2012 first rounder, which may be about right. But just look at what Utah had to give up to OKC in order to dump Matt Harpring's INSURANCE-COVERED expring contract: first round pick Eric Maynor, who had already proven to be a good pick-up and not a draft bust. This was the price to dump something that was actually otherwise an attractive financial asset. Just think what the price would be for someone making more money (like Battier or Jeffries), without insurance paying anything.

But I think you definitely have the right idea about how the Rockets might be able to approach taking on more salary and then later trying to reduce salary in order to minimize the luxury tax bill.

 

Unfortunately, as it stands they are.
Toronto: Give us more or watch Bosh go to NY and devalue your picks!

There would be a lot of posturing in the offseason. But Morey would be in his element.

 

Great write up Bima again! Let me add my .02. I think the rockets should start over. Yeah, I know, its me again with the doom and gloom, but I hate seeing this team being avg. To me avg in the west is a 4th or 5th seed. Now to some, thats good enough, but to be a champion, I don't think that means jack. We see this year a glimpse of the future with teams like OK City,Utah(with a high lotto pick from the knicks) and of course Lakers,nuggets and dallas thrown in there. Portland also has the goods to make moves while the spurs and suns are going downhill. I do like the addition of martin and the development of some of our younger players, but if we're going to have a team minus a superstar like the recent champions pistons, we need a couple of guys to play on a all star calibe level. That said, I like the picks morey got from the knicks no matter where they land and i like jordan hill as a prospect.

Morey has said they will match any offer to retain lowry and scola. Now that landry has been traded, he might be more inclined to do so, but seeing is believing to me. I think someone is going to offer scola the cap hold amount and lowry will get 4m. In that case, is that something you really want to do with role players? Of course, everyone in the league is a role player because they play a role, but if this team doesn't net that big time impact player, we're kinda spinning our wheels? What do i suggest? The same thing I've said in a few threads probably won't happen.