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The Rockets' Approach This Offseason Might Not Involve Using Cap Space

Discussion in 'Houston Rockets: Game Action & Roster Moves' started by BimaThug, May 28, 2012.

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  1. BimaThug

    BimaThug Resident Capologist
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    With all the talk of the Rockets' opportunity to have truly meaningful cap room for the first time since 1998, there has been very little mention of the Rockets taking a different strategy this offseason:

    Potentially foresaking that cap room in favor of improving via trades and use of salary cap exceptions.

    Right now, the Rockets (absent trades) expect to have either just under $3M (waiving Fortson and Simpson and renouncing Camby's Bird rights) or about $8.1M (also waiving Dalembert) in cap space. Those numbers decrease by another $800k or so if the Rockets sign their picks (#14, #16, Moti) to 120% of their rookie scale salaries prior to signing an outside free agent (which cannot happen until July 11 at the earliest), which I think is quite likely to happen. Of course, trades could increase or decrease that figure. It is highly unlikely that a large contract like Martin's or Scola's is waived via the amnesty provision, as both players are far too productive (and Martin has an expiring contract) to merit such a move.

    Given that Deron Williams is the only unrestricted free agent worthy of a max contract, and given that the Rockets will need to have a Plan B if they do not succeed in attracting Williams, there should be other moves put in place to give the Rockets the flexibility they need to improve the roster.

    One move that I can distinctly envision is a draft night trade of Dalembert without much/any salary coming back. Either Dalembert has enough trade value for another team to want to give value for a $6.7M center next season, or his $1.5M partial guarantee can be easily absorbed by a team with more cap space than it needs and can be dumped with, say, $2M cash (the Rockets still have the full $3M cash allowed by NBA rules). Meanwhile, the Rockets will benefit by both (a) adding at least $1.5M to their available cap room, if they choose to use cap room; and (b) obtaining a $7M trade exception, if they choose to use their salary cap exceptions instead.

    Remember, Dalembert's contract will be fully guaranteed for $6.7M if he is not waived by July 8, which is DURING the July Moratorium, meaning that Dalembert will need to be traded before July 1 or else either cost the Rockets $1.5M in cap room (if waived) or $6.7M (if he's kept around). This makes a draft night trade of Dalembert a distinct possibility. If Dalembert is traded, say, to Toronto (along with cash) into their cap space, then the current Rockets roster would be left with either of the following options:


    Cap Room Route:
    --Approximately $8.8M in cap space
    --The $2.5M "Room" Exception
    --No Bird rights on Camby (meaning some of that $8.8M would have to be used to re-sign him)
    --Loss of $1 of cap space for each $1 Dragic signs for above a $4,005,200 starting salary
    --Loss of $1 of cap space for each $1 above a $5,562,733 starting salary for which Lee signs an offer sheet


    Foregoing Cap Space Route:
    --An approximately $7M trade exception
    --The full Non-Taxpayer Mid-Level Exception of $5M (or the full Taxpayer MLE of $3.09M)
    --The Bi-Annual Exception of $1.957M
    --Full Bird rights on Camby, Dragic and Lee


    I'm not necessarily advocating the foregoing of cap room as an offseason strategy. Trades can change everything. I'm simply saying that I would not be surprised if the Rockets opt to straddle a line that enables them to go in a variety of directions, one of them being NOT using any cap room at all.

    Flexibility. That's the name of the game.
     
    #1 BimaThug, May 28, 2012
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  2. Pringles

    Pringles Member

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    Bima, could we sign and trade Dragic to a team that is over the cap? What new rules apply with that type of scenario?
     
    #2 Pringles, May 28, 2012
  3. deshen

    deshen Member

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    Thanks, I do not think Lee will be resigned at such high salary to return.
     
    #3 deshen, May 28, 2012
  4. durvasa

    durvasa Member

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    The Rockets have been straddling that line for what seems like forever.
     
    #4 durvasa, May 28, 2012
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  5. Stevierebel

    Stevierebel Member

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    Correct. This cap flexibility has been set up to take advantage of teams who need to dump money with the pending tax/cap. And to keep our own guys at manageable salaries.
     
    #5 Stevierebel, May 28, 2012
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  6. leebigez

    leebigez Member

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    Rockets are a disaster. How is 7 or 8m flexibility? Flexibility is having young, high ceiling players and money. The rox have neither.
     
    #6 leebigez, May 28, 2012
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  7. gregas

    gregas Member

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    Which team over the cap would want him and would be simultaneously his preferred destination?

    All we hard till now is interest from teams under the cap, that can sign him outright. Rockets have no leverage there. Why would he weaken the position of any team he's going to and plans to have a future with, for the sake of the Rockets? If he's smart he wouldn't. Every single asset - let it be a pick or a player - is too valuable to be given away for free.
     
    #7 gregas, May 28, 2012
  8. Pringles

    Pringles Member

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    I know we wouldn't sign and trade him to a team under the cap. I was just wondering because if Morey thinks Lowry is better value at 6 million than Dragic at 8-10 million, it is an option to consider.

    Rockets are just stock piling on assets. We may keep both Lowry and Dragic to Lowry's dismay, or we might have to trade Lowry (like everybody is predicting) and keep Dragic. I'm just trying to say there could be another option Morey could explore. No one is going to trade us a superstar for Dragic, but we could package him with others if the rules permit. (Which is why I asked the question originally - to find out what options Morey can pursue)
     
    #8 Pringles, May 28, 2012
  9. gregas

    gregas Member

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    Yes, but he would have to agree with that, wouldn't he. He'll forfeit one of the rare occasions where he's a free agent and can dictate his own destiny, to end the Rockets perpetual quest to find their "superstar"? I don't think he's that good of a guy.
     
    #9 gregas, May 28, 2012
  10. jtr

    jtr Member

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    Bima

    Thank you for another awesome "I read it through once and I am going back to read it again" posts. The situation is exactly what I expected, but I have been reading your posts carefully for a year or more.

    Again great work!!!
     
    #10 jtr, May 28, 2012
  11. jtr

    jtr Member

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    Bima

    One thing I do have a question about. Under what circumstances can the Rockets exceed the salary cap before next season. My speculation (needs to be confirmed by Bima lol) is that if the Rockets are under the salary cap they can exceed the salary cap in a trade, assuming that Les is willing to pay a luxury tax of $1.75 for every $1 the cap is exceeded, up to $5 million. Is this true?
     
    #11 jtr, May 28, 2012
  12. Jontro

    Jontro Member

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    Does this mean we're not going to get much better anytime soon?
     
    #12 Jontro, May 28, 2012
  13. Pringles

    Pringles Member

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    There is a difference between salary cap and luxury cap.

    If you are over the salary cap, that means you have no free money to spend (except for exceptions like the MLE). There is a luxury threshold which is over the salary cap. If a team passes that threshold, than that is when the new tax rule occur ($1.50 each for first 5 million dollars over the threshold, $1.75 each for the next 5 million dollars, etc.).

    As for your original question, they can exceed the salary cap by trades (but the trade has to match financially), resigning players with raises, and just by signing draft picks. You can see why the Rockets could easily go over the salary cap by just resigning Courtney Lee and Dragic and signing two draft picks and as well as D-Mo.
     
    #13 Pringles, May 28, 2012
  14. jtr

    jtr Member

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    Thank you for your response. I do have further questions which may allow me to increase my understanding. Unfortunately many web sights are currently in the process of updating CBA information.

    What is the current/projected salary cap versus luxury cap levels? A better way to express this question may be "How many millions above the salary cap is the luxury cap next season".

    If the Rockets were below the salary cap, say by 2 million dollars, with the relaxed trade restrictions for assuming cap, how far could they get above the salary cap in a single trade?

    And of course I will probably have further questions. Your help is greatly appreciated.
     
    #14 jtr, May 28, 2012
  15. TEXNIFICENT

    TEXNIFICENT Member

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    So more of the same. WOW. Thanks.........

    So with the 14th pick in the 2013 draft, the Houston Rockets select..........
     
    #15 TEXNIFICENT, May 28, 2012
  16. larsv8

    larsv8 Member

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    Rockets are fine.

    Teams like New York, Atlanta, Memphis, Orlando....

    Now those teams are disasters.
     
    #16 larsv8, May 28, 2012
  17. Carl Herrera

    Carl Herrera Member

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    Bima,

    Thanks for dropping some actual info and analysis on this forum instead of the usual repetitive complaint and blind negativity we see from some people.
     
    #17 Carl Herrera, May 28, 2012
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  18. Rip Van Rocket

    Rip Van Rocket Contributing Member

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    I see.

    So, I guess the Rockets trading for a player that makes $19,000,000.00 per year through 2014 doesn't really help with the flexibility?
     
    #18 Rip Van Rocket, May 28, 2012
  19. Commodore

    Commodore Member

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    This is how I feel, not to mention the young players with potential we have (Lee/Dragic) will require eating cap space to keep.
     
    #19 Commodore, May 28, 2012
  20. jtr

    jtr Member

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    Just out of curiosity why would you bring a spurious comment like that into an article about cap space? And it is NOT more of the same. Cap management by the NBA is changing at lightening speed right now and it will have serious ramifications for every team.

    So is this one of those small brain farts or what? And don't blame me for that comment. You completely went off subject and dismissed a thread that you didn't have any real understanding of or insight into. Or have I completely missed your point? And that point being ...
     
    #20 jtr, May 28, 2012
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