[ClutchFans] July 2013 Houston Rockets Salary Cap Maneuvers: Timing is Everything

As always, thanks, everyone, for the kinds words.

The article was written before the news about Henriquez came out. Even so, it is likely that Henriquez's deal is either a "training camp contract" (i.e., non-guaranteed) or has only a very small guarantee. As I posted in the thread about Henriquez, this contract is likely being used as a means for the Vipers to gain control of Henriquez's "D-League rights" after he is cut.

There is a little (but important) difference between a "team option" and a "non-guaranteed year" in a player contract.

A team option is what it sounds like: an option year that the team can elect (in its sole discretion) to exercise. Typically, the exercise date is June 30 (the last day of the NBA season) and it cannot be after that. If a player has a team option coming up, he CANNOT be traded after the February trade deadline unless and until his option is actually exercised.

A non-guaranteed year is almost exactly like a team option, except that a player with a non-guarantee can be traded after the team's season is over and before his "guarantee date" (which is the date after which his contract will become partially or fully guaranteed and which can range anywhere from right after the end of the team's season until early January of the following season). This is especially helpful to teams trying to execute draft night trades or other summer deals. It is this flexibility that is why most teams now bargain for non-guaranteed years rather than team options.

The continuing benefit of team options is that the team can continue to hold Bird rights on the player even after declining the player's option. With a non-guarantee, the team typically waives the player, not only losing the player's Bird rights but also potentially losing the player to another team via the waiver claim process. Another benefit of team options is that, for non-first rounders with three years of less of experience, a team can decline a team option but still extend a qualifying offer to the player to keep him a RESTRICTED free agent.

Daryl Morey and company have been very creative with these issues, in many cases negotiating in BOTH team options AND non-guaranteed salary into the same year of some players' contracts. (FYI, while I have no confirmation of this, I wouldn't be the least bit surprised if this is the case with the contracts of Covington, Young and possibly Canaan and Henriquez.)

Honestly, it's too early to give a good forecast. However, while I think Les Alexander can afford to trade for a third star and re-sign Parsons, it would quickly become financially unfeasible for the Rockets to continually also add players at the Taxpayer MLE each year. The tax bills will quickly get very high. That said, unless they are still planning their cap situation around acquiring another star in free agency, I could see them using the MLE next summer at least.

 

Teams (with some exceptions) technically have access to the MLE and BAE every season . . . to the extent that they could make use of them instead of cap room. For instance, if a team (without taking into account salary cap exceptions) is $2 million below the salary cap, they would still be able to use the MLE and BAE instead of that cap room.

However, if a team is far enough below the cap that it has more cap room than the combined amount of all salary cap exceptions and player cap holds combined (i.e., cap room is obviously the more beneficial use of its resources), the team AUTOMATICALLY loses those salary cap exceptions.

In the Rockets' instance, they had the MLE and BAE at their disposal . . . until they made the Robinson trade. That move put them far enough below the cap that they automatically lost the MLE and BAE.

But to answer your question, with all of the Rockets' recent signings, they are essentially "capped out." They can only sign players at this point to either minimum salary deals or through the use of the "Room" Exception, which is a separate salary cap exception (a form of the MLE) available to teams that actually use their cap room in a given season.

(FYI, all of this is in the article. Hope you read it.)

If you're looking to trade solely for Aldridge, he makes $14,628,000 in 2013-14. This salary is barely within the range allowing the Rockets to use salary-matching rules of 150% + $100,000. So, working backwards, the Rockets would need to send a minimum amount of outgoing salary to Portland (or elsewhere) equal to $9,685,334. If you subtract Asik's salary of $8,374,646 (who you are assuming is included in the trade), you are left with a gap of $1,310,688. This amount could be made up using either Jones or D-Mo or could come from a combination of 2-3 minimum salaried players (assuming those players are eligible to be traded at that time).

Hope that helps.