I'm highly anticipating draft night but not because I hope or expect we'll draft anyone. I see draft night as the Rockets' last best chance to trade for a 3rd star and avoid chasing Melo.
That's not correct. If we draft a player who isn't under contract in Europe then his 1st round salary slot immediately counts against our cap and reduces the amount that we can offer a free agent. I believe that the salary slot for the #25 pick in this draft is right at $1M. So, if we use the pick on a player that isn't going to play in Europe then we reduce our cap space by $1M as long as we hold the players rights. Unless the Rockets are extremely confident that they can pull off a Sign n Trade deal (and therefore not need cap space), you'll likely see them either trade the pick or draft a player that is currently under contract in Europe. Of course, the other option would be to draft a non-Euro player and then later if we do need cap space then we can trade his rights for draft picks and free up that money for a FA.
The rookie scale salary for the 25th pick is $991,000, which would be the cap hold for that player once drafted (unless he signs a letter agreeing not to play in the NBA this season). The alternative to that cap hold (if the Rockets are trying to maximize cap room) would be to take an incomplete roster charge ($507,336) against team salary. Therefore, taking a (non-stash) player at #25 would really only eat into the Rockets' available cap room by $483,664. If the Rockets like the guy at #25 enough, they may be willing to take that (very minor) cap hit. Also, as you said, they could always flip him to another team later to clear space if absolutely necessary. (aelliott, I know that you know all this. This was more for the general public.)
I'd posit even a 25th pick would be much better than one of the following players: Garcia, Casspi, Hamilton, Daniels, Canaan, Motiejunas, Powell.
And this draft is pretty deep. It's likely that a player at 25 can be a rotation player on this team.
I just want to add one more thing to this. The Rockets can offer the draft pick just 80% of the rookie scale for year one to deflate the amount even more. It probably requires some sort of pre-draft agreement or something. But it's definitely an option that allows them to take a guy just in case no FA comes here.
<blockquote class="twitter-tweet" lang="en"><p>Houston (#25) & Phoenix (#27) have both made their picks available in exchange for future firsts, sources say. Likely go int'l otherwise.</p>— Jonathan Givony (@DraftExpress) <a href="https://twitter.com/DraftExpress/statuses/482225034866335745">June 26, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" lang="en"><p>One name to watch for Rockets at either #25 or #42 — Russian big man Artem Klimenko. They’ve been doing a deep dive researching him</p>— Chad Ford (@chadfordinsider) <a href="https://twitter.com/chadfordinsider/statuses/482225924809949184">June 26, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
How do these things leak? I'm pretty sure Morey doesn't want other teams to know what foreign players he thinks are special.