[ClutchFans] BimaThug: Houston Rockets Salary Cap Update

Shane is still effective on the court, still a good glue guy. I'm certainly glad for the example he sets off the court, too. I'd be shocked to see him traded.

 

***UPDATE***

Well, it looks like the Brad Miller deal is a little better than we originally thought.

According to both espn.com and shamsports.com, Miller's starting salary is "only" $4.4M. Shamsports.com also shows Miller's salary as $4.752M for 2011-12 and $5.104M for 2012-13, with the partial guarantee for 2012-13 being only $848,000. This puts the total guaranteed money for Miller at exactly $10M for two years (including the partial guarantee on Year 3).

Still a bit much, but much more reasonable than originally reported.

This decreased starting salary ($4.4M as opposed to $5M) has the following effects:

--The Rockets still have a full $1.365M remaining of their MLE if they want to use it on another young player (although I can't think of anyone worthy of that money).

--The current payroll for Les Alexander is $1.2M less ($600k in salary, $600k in tax).

--Assuming that all non-guaranteed contracts are waived and no other players are signed, it is now possible to sneak under the luxury tax "simply" by trading Jared Jeffries to a team with cap room or a trade exception without taking back any salary (although it will still cost the Rockets some assets to do so).

This change of events, combined with Toronto inexplicably being willing to take on David Andersen's contract for only $1M, is leading me to re-evaluate my position that the Rockets ABSOLUTELY won't be able to avoid the tax. That possibility now exists, if the Rockets can find the right team and are willing to part with (potentially) a first round pick to dump Jared Jeffries's salary.

leebigez, I'm still willing to honor our sig bet, but these developments (the Miller contract moreso than the Andersen trade, since the Miller contract appears to have just been inaccurate information from the Chronicle) do change my thinking a bit. Now that it is possible to dump Jeffries without parting with a guy like Taylor (who Adelman loves), I think the Rockets could conceivably part with a (lottery-protected) first rounder in order to save upwards of $13M in salary and tax. But would you honestly have a problem with that?

Any Jeffries trade would obviously be conditioned on the Rockets not being able to pull off a major talent upgrade move using his expiring contract as a piece.

 

Never bet against Morey.

 

Its not that big of a deal to lose to me in a sig bet :grin: . On the real though, it makes business sense to get under the lux tax. Even if theyhave to dump jeffries or battier as a big contract, they still have the other, hayes,hill,patterson,and chase or possibly ariza to use in a deal. They would still have assets to use in this so called major talent upgrade. Also, with so many teams under the cap, the asking price might go up,but the asking price isn't bigger tha what the tax hit would be. Right now, they would pay basically 14m in tax or somewhere in that range. Now if this team was close or in contention, i could see les being cool with that, but they're not. If they were in a different place with more knowns, it might be a harder question. Truth is, even with yao, they are between a 48-52 win team wgich would put them anywhere from 5th-8th in my opinion. The spurs paid last year because they thought with jefferson in the fold, they could make a serious run if everyone stayed healthy. Well, manu and parker missed chunks of the season and they really didn't help Duncan alot with talent. Even then they beat dallas and made it to the 2nd rd. The owners make good on playoffs because they don't pay th players salaries and the other team don't share the gate. I will take it easy on you and your sig :grin:

 

Hey, I'm not conceding victory to you just yet, man! :grin:

My point was that the BASIS on which I made the bet with you--that it was almost IMPOSSIBLE that the Rockets could get below the tax threshold--has been affected by the faulty information on Brad Miller's deal. Yes, I know that $600,000 doesn't seem like a lot of money; but it is the difference between having to also trade away a nice young player or not. Jeffries and Andersen were basically the only two players with guaranteed deals who the Rockets wouldn't mind dumping. I still think the more likely result will be that the Rockets either make a big move to upgrade the roster (and in turn may increase their payroll) or do a "Darko-for-Brian-Cardinal-type" trade at the deadline to marginally decrease their luxury tax burden. But the probability that the Rockets completely avoid the tax has changed based on this new information; and that changes my stance regarding feeling so strongly about it that I would make a sig bet (something I do not normally do).

While you may be right that the Rockets could still package other players' salaries to make a major trade work, I seriously think that Morey would much rather use Jeffries as the salary filler, even if it means paying the tax. The reported Ariza/Hill/Jeffries package mentioned in the rumor for Iguodala is EXACTLY the type of package that Morey would like to use in a major trade. ONLY if no (reasonable) major talent upgrade trade is available at the February trade deadline (at least none that could possibly involve Jeffries as salary filler) do I think the Rockets will look to dump Jeffries to get below the tax threshold.

With "only" about $2.35M in remaining salary owed to Jeffries as of the trade deadline (maybe less if his 2010-11 salary is front-loaded), I would cross my fingers and pray that $3M cash and a lottery-protected first round pick would be enough to get him off the books.

Remember, though, that this coming trade deadline may be the last chance for quite some time that the Rockets will have BOTH the assets necessary to entice another team to part with talent AND large expiring contracts to make salary matching easy. After Jeffries and Battier salaries (well, at least Battier's current salary) come off the books, with the Rockets expected to be right near where the current salary cap is at, it will be much more difficult to match salaries in any trade for a star player, even if the other team likes the young assets or draft picks the Rockets are offering.

 

Wow. It always trips me out how misrepresented this kind of info can be reported, widely reported, in the aftermath of an NBA deal. My impression was that the numbers attached to Miller's contract were "carved in stone," yet reality, after a bit of time passes, shows us those numbers are quite different. Sure, not a huge difference, but huge in the sense that getting under the LT suddenly looks possible without jumping through hoops under Barnum and Bailey's big tent.

Morey, for all the times he can seem unusually verbose discussing the team, salaries, etc., is not someone you'd want to play poker with!

 

I can't see us using a first rounder to dump money unless we somehow end up a better team in the process.

 

You mean like giving back a high 2nd round pick and $3 million to dump Steve Francis?

It is why Leeb and I have been consistently saying.."Don't believe the hype" about the team willing to pay lux tax.

Because they never have.

DD

 

A first rounder is not a second rounder.

 

I can see it.

Having someone taking Jeffries off the Rockets' hands in February means that they (1) save the $2.35 mil or so (estimated) left on his contract after the trade deadline, (2) save the $7 million or so in tax money, and (3) gain a tax distribution probably worth $2 mil to $2.5 mil.

So, that's like a $11 million value, and if the Rockets can get that value by, say, giving up a late first round pick, especially when they will likely have 2 first rounders in 2012, it would make sense to do it since, most years, late first rounders and or early 2nd rounders can be bought for $3 million in cash or less. It makes sense to give up a pick worth $3 million to gain $11 mil. Hell, it would make sense for the team to thrown in $3 million more in cash in such a deal.


That said, a much better use for the Jeffries contract would be for them to use it as contract filler in a deal for a star player who makes a ton of money. That, of course, would depend on whether such a star player becomes available. Failing that, it would make some sense to give up a protected first round pick to save themselves some money and use the saving to buy picks or other assets in the future.

 

I really don't understand the argument here. There's no point in paying luxury tax unless it gives you a decided advantage on the court. Getting rid of end-of-the-bench players to move closer or under the luxury tax line is just smart. I think any well-managed team would do that, including the ones who are willing to pay luxury tax.

You should save the "I told ya so" for when the Rockets give up a significant player or asset to get under the tax line.

 

Bima, I just want to point out that

1. the minimum salary for a 10+ year experienced player in 2010-11 is $1.352M, and
2. the minimum salary for a rookie is $473,604 and for a player with 3 year's experience is $885,120, which adds up to $1.359M

Given Rox's preference of signing their players into 1+2 contracts using the MLE, I have to think that the number works out too perfectly to be a coincidence here.

how many years of experience does Mike Harris have now? could Morey be saving the MLE for possible 1+2 contracts for Harris and a 3rd rookie PG should the situation calls for it?

 

Teams don't need cap space, MLE, or LLE to sign minimum contracts. They're exceptions of their own and unlimited.

 

Dada, are you saying that being financially smart and responsible equals to not willing to pay lux tax when it is required?

high 2nd round picks are readily available with a price tag of around $1-2M for a couple of years now. You can pretty easily buy or sell them at that price range. If the rockets save more than the 4-5M they pay out, they HAVE to do that trade, IMO. It has nothing to do with whether the team is willing to pay lux tax or not this year.

 

Teams don't need cap space to sign minimum contracts, but minimum contracts can only be maximum 2 years in length.

Thus, if rox wants to offer a 3 year contracts (with the last two year being team options) and be able to retain their bird rights should it desire so, as they have been doing lately, they NEED to use their MLE to do it.

 

Just how much would Les save if Morey was able to dump Jeffries?

 

before the trade deadline yes but at the deadline value is up due too expiring contract +overloaded at his spot +age+game on downside last year=good bye shane

 

Assume everything stays as-is, then Les will save the 7M in lux tax plus about 3M in revenue sharing (currently, there are 6-7 team above the lux tax line not counting rox, with a sum of about $80M above the tax line, these taxes will be shared by teams under the tax), which means a total of $10M, give or take a million.

-- This did not count Jeffries' salary, as rox pretty much will have to pay the $3M in cash to cover his salary in any such salary dump trades.