Harden signs extension with Houston

Yessssss

 

You can't afford 2 of these guys (most of whom get 25-30% of the cap) when you're paying 60%+ to Harden, Anderson, and Gordon.

2 is almost out of the question unless you move both and gut the roster, 1 would require you move at least one

 

I guess KD's signing with GSW really scared the owners, they don't want that to happen to their star players.

 

I wonder what Steph Curry thinks about this.

 

It was reported that the front office approached him about an extension in November 2015.

 

It will be interesting to see if OKC works their possible cap holds and Dion Waters' situation to offer WB one.

Aside from the fact he deserves the new Max, consider that it is easier to trade WB if he is locked up to more years.

 

http://espn.go.com/nba/insider/story/_/id/16933077/why-rockets-gave-james-harden-contract-extension

Why Rockets gave James Harden a contract extension
by Kevin Pelton on 2016-07-10 01:02:00 UTC (original: http://espn.go.com/nba/insider/story/_/id/16933077/why-rockets-gave-james-harden-contract-extension)

Can both the Houston Rockets and James Harden benefit from the extension the All-Star guard agreed to Saturday?


Extensions have all but disappeared for veteran players in the NBA, the result of changes to the league's collective bargaining agreement that made it more lucrative for players to finish out their contracts and hit free agency even if they planned to re-sign with their original team.

That's changed recently, however, because the rapidly rising cap has allowed teams with unused cap space to simultaneously renegotiate the contracts of players and extend them, giving players more money now and teams better terms or more security down the road.

Of the handful of players who have renegotiated and extended their contracts, Harden is by far the highest-profile. So let's take a look at why it made sense for both Harden and Houston.

Why Harden signed an extension
From Harden's perspective, there was huge financial incentive to extend his contract in exchange for the carrot of renegotiating his salary to the maximum possible this year and next.

Though Harden signed a "max" extension at the conclusion of his rookie contract, the subsequent jump in the salary cap means he was set to make far less than the current maximum salary over those two seasons. By renegotiating him up to the new max, the Rockets gave Harden an additional $9.8 million this season and $10.7 million in 2017-18.

Harden sacrificed almost nothing in future earnings, based on current projections. (This is unlike the situation for Russell Westbrook if Westbrook were to make a similar deal - the Thunder guard would likely be sacrificing significant future earnings.)

Harden's new 2018-19 salary ($30.5 million) is almost exactly his projected maximum as a free agent in the summer of 2018 ($30.3 million). So it appears that all Harden is really giving up is the ability to become a free agent a year earlier.

There are scenarios where Harden could cost himself future salary down the road by locking in now. The maximum salary could increase, or even go away altogether (a long shot), during the negotiations on the next NBA collective bargaining agreement. Still, if Harden is happy in Houston, that small risk appears well worth the extra money over the next two years.

Why the Rockets signed an extension
From Houston's standpoint, there's a lot more downside here. After all, the Rockets could have simply done nothing and had one of the league's best bargains. I estimate Harden's production to be worth an incredible $145 million over the next two seasons, when he was set to make a little less than $35 million.

Unlike when the Denver Nuggets renegotiated and extended the contracts of Will Barton and Danilo Gallinari last season, Houston didn't trade off more money now for below-market salaries down the road. As noted, Harden would probably have made about the same amount in 2018-19 either way.

Of course, what the Rockets get out of this deal is the certainty that they'll be the ones paying Harden in 2018-19 -- or if not, a team to which they trade Harden -- which was not a foregone conclusion. If Houston struggled again next season, we would have been looking at many months of rumors about whether he was headed elsewhere in free agency.


The Rockets also lock in the cost certainty of knowing Harden's 2018-19 salary can't change subject to the new CBA, which will help their long-term planning.

All that security came at the cost of their remaining $9.8 million in cap space this summer and $10.7 million next summer. That's why I'm not sure Houston would have made the deal if not for locking up Ryan Anderson and Eric Gordon to four-year contracts this summer, deals that exhausted much of their cap flexibility.

At this point, the Rockets were unlikely to add much in free agency. They filled their biggest remaining need, experienced depth at center, by agreeing to sign Nenê to a two-year, $6 million contract using their room exception after completing this extension.

And Houston's 2017 cap space was getting tight, too. While the Rockets still probably could have gotten to max room by declining the team option on backup forward K.J. McDaniels, that would have required adding no additional 2017-18 salary between now and then. With Harden under contract, Houston can feel comfortable taking on longer contracts in trade.

Ultimately, having Harden under contract is probably worth sacrificing cap flexibility. If the Rockets play well next season, they're going to want the keep their core together, and if they put together another season like 2014-15 they're not going to be able to attract premier free agents no matter how much cap room they have.

For better or worse, Harden is Houston's best selling point. And with this extension, that should remain the case through at least 2018-19.

 

Nene's deal is two years?

 

OKC did it with Nick Collison in 2010.

I think this is a good move for both sides: Harden get way more $$ & the Rockets get Harden for 1 more year guaranteed and possibility make next year's pitch to free agents a bit easier.

On the other hand, I think people are way way way overreading this move as some sort of statement the Rockets is sending to the league, and Rocket is now showing their loyalty toward players by doing something that other cheapskate teams didn't do in the past.

Something like this rarely happened in the past because of such a renegotiation was either prohibited by league rules & it rarely made sense for the players.

1) Teams rarely had the cap space necessary to pull of this kind of renegotiation. This year we had an unprecedented cap increase, and pretty much every team suddenly ended up with a boat of cap space.
2) This kind of renegotiation was rarely necessary for a star player. With normal cap space increase, a max contract signed 3 years ago is not that different from a max contract today. Also such a renegotiation can only add 2 more years max, so it rarely made sense for the star players in the past to do this.
3) Most players are not eligible for this kind of renegotiation. The player have to be on at least the 3rd year of their contract. For example, Paul George is not eligible for this kind of renegotiation this year even though I'm sure the Pacers would love to extend him for 1 or 2 more years.
4) Even for the eligible players, it makes no sense for them personally most of the time. For example, Durant last year, Curry & Griffin & Westbrook etc this year. OKC can't renegotiate Durant's contract last year because 1) they didn't have the capspace and 2) Durant would lose a boat load of $$. Curry, Westbrook, Griffin etc are expiring after this season with another large cap increase expected next year, so if they renegotiated their contract they would actually lose $$.

 

Westbrook, Curry etc would never sign such an renegotiation/extension. Because Harden have 2 years remaining, such a renegotiation actually increases his earning. On the other hand because Westbrook & Curry are expiring & the cap is expected to increase significantly again, they would actually lose $$ with a renegotiation/extension this year.

 

Best news of the offseason. I have no idea what this means from a cap standpoint for this season and next, but I honestly don't care. It's another guaranteed season of Harden in a Rockets uniform, and the extension shows that not only are the Rockets dedicated to keeping James here, but that the guy actually wants to be here.

Nobody is expecting a championship this season. But if Harden buys into this system, and they see a marked improvement from last season, then they're definitely on the right track.

 

I'm in tears. What a great news.

 

Very surprised, but nice. Glad Harden signed.

 

Best post on this thread. Repped.

 

I'll just leave this here without further comment.

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">FWIW:<br><br>Rockets current cap room (pre D-Mo sign/match): $9-11M.<br><br>Cap room needed to renegotiate-and-extend Harden to a max deal: About $9.7M.</p>&mdash; David Weiner (@BimaThug) <a href="https://twitter.com/BimaThug/status/750088421280849920">July 4, 2016</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>

 

Yeah that looks like an error. It's a 1 year deal at 2.89M

 

That's largely correct, but assumes an extension like Harden got.

There is no requirement that a renegotiation has to have an extension of years, too. Curry and WB could be bumped up by $9m to the new max without adding more years.

So, there really is no excuse for GSW or OKC not to give Curry and WB the full max next year.

As far as the salary cap increasing go, whereby Curry and WB potentially make less if they do an extension as well as renegotiations of salary...it is possible to get paid more than the "Max" amount available to free agents, when salary raises out-perform the cap increases. What is the predicted increase for next year...and in terms of increases to Max salary? Silver already said it's not as much as previously predicted. In dollar terms, the cap increase would have increase the Max by $12m more vs this year's max to exceed Harden's pay over the next two years -- assuming my math is correct.

Also, what it does for both, Curry moreso, is it locks in guaranteed money until he is eligible for his 10yr max in the same year Harden gets it. Injuries can happen.

 

Nice, BimaThug.

Good stuff. I hope his defense improves now that he's seen it can help.

Why are you even worried about other players or what they think? As a ROCKETS fan (if that's what you are), I don't think think neither you nor I should be even wondering about other players in the league but our own.

 

I'll go so far as to say that anyone who views this as a negative move knows absolutely nothing about economics or psychology. This is by far one of the best things that Daryl has done as GM.