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[ClutchFans] Houston Rockets Salary Cap Update

Discussion in 'Houston Rockets: Game Action & Roster Moves' started by BimaThug, May 7, 2014.

  1. basketballholic

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    Howard makes $21.4 million dude.
     
  2. BimaThug

    BimaThug Resident Capologist
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    I think I answered this for you via Twitter but will explain for others here.

    I had used 120% of the rookie scale salary for the 21st pick in the draft in which Parsons was picked (who happened to be Nolan Smith) as the basis for determining Parsons's qualifying offer (having met the "starter criteria").

    However, after reading the actual CBA language more closely, I discovered that this was the criteria used to determine the qualifying offer for FIRST ROUND PICKS meeting the starter criteria (except using the 9th pick instead of the 21st).

    For SECOND round picks, the correct determination of the qualifying offer is the qualifying offer that would be payable if the 21st pick in [the draft whose rookie scale contracts are due for qualifying offers in the year of said second round pick's free agency] had signed for 100% of the rookie scale salary.

    What this means is that, in the case of Parsons, he is due the qualifying offer payable to the 21st pick of the 2010 NBA Draft (the draft coming up for qualifying offers this summer) had he signed for 100% of rookie scale. (The 21st pick in 2010 was Craig Brackins, but that is irrelevant to determining Parsons's qualifying offer.) This amount is $2,875,130.

    Hope that adequately explains how to calculate Parsons's qualifying offer and where I went wrong previously.

    You cannot trade for "a trade exception." Trade exceptions get generated when a team sends out salary in exchange for less salary. Also, any trade exceptions that do get generated count against the cap unless they are waived.

    So, if Asik and Lin are traded for absolutely no salary (which would generate two trade exceptions in the amount of $8,374,646), those two exceptions would count against the cap unless they are waived. The Rockets couldn't use both. At least not practically speaking.

    Dwight Howard is due roughly $21.4 million next year.

    James Harden is due roughly $14.7 million next year.

    Carmelo Anthony can command a starting salary of up to roughly $22.4 million this summer.
     
  3. d12babymamas

    d12babymamas Member

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    Here's an idea. Have Morey suggest a pay cut to Harden, D12, Lin, Asik so we can retain the bulk of our current roster, add that 3rd star player, and tweak our roster a bit. Also, ask Parsons to take less than his market value. We get to build on our chemistry and become a true contender. Will it happen? Probably not, but it's still worth a shot. Do it Morey!!!!
     
  4. Dutchrudder!

    Dutchrudder! Member

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    This isn't the NFL, that's not an option. Contract salaries are guaranteed and cannot be renegotiated.
     
  5. Roachiep

    Roachiep Member

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    I see all this number crunching looking at what the Rockets will have available this offseason for potential Free Agent signings and resignings of our own players.
    I think the most important thing we should all look at and take from what we just saw with the Spurs winning the Finals this year. The Spurs were built with a ton of role players and former superstars who know their role and their value and have accepted contracts that pay them accordingly. The most important aspect of this being that these players not requiring overpayment on their long term deals has enabled the Spurs the cap room and flexibility to sign key free agents and veterans as needed to complete their squad and make them the most well-rounded TEAM in the league.
    The Spurs may not win another with their over the hill core, but their salary model should be copied by teams aiming for championship contention. The Rockets for example need to find a way to lock up key role players like Parsons. One can hope that he will see his place and value and the potential to be a part of a title contender for the next 4-5 years and accepts $5-6 million per. If the Rockets are able to lure a 3rd star, which they must in order to make their title quest a realistic venture, someone like Melo would reasonably need to agree to taking a $10-12 million per year contract for the next 4 years to leave room for the Rockets to fill out their roster with other championship caliber contributors.
    I know this is probably way way way too much to hope for, but the league was just given proof that the star trio from the Spurs accepting less money overall each year allowed the Spurs the financial flexibility to fill out their roster with enough talent and fitting role players to get them a championship.
    I only hope the Rockets can find additional free agents and players who will buy into the team philosophy and sacrifice some of their ridiculously high salaries for the chance to put more championship banners up in the rafters of the Toyota Center. Hakeem would be proud, and so would I. I hope the Rockets can make this work.
     
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  6. BigMaloe

    BigMaloe Member

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    Bima... or anyone else who may know...

    We just used the rest of our cash allotment with the asik trade. My question is when can we use next years 3mill? When does the calender restart?

    I'm curious because i think it could be a valuable tool used to trade lin.
     
  7. basketballholic

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    ^^

    That is true BigMaloe. A fresh $3.3 million to cushion Lin's contract available to send out after July Moratorium.
     
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  8. JuanValdez

    JuanValdez Member

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    Well, that's not clear. If they have to wait for the of the July Moratorium, they'll trade the $1.5m out of the 2014-15 allowance. Basketballaholic had suggested we could trade for some nonguaranteed scrub now and pay them so as not to waste this year's allowance. I think that can work, but nothing has actually been done yet.
     
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  9. BimaThug

    BimaThug Resident Capologist
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    EXACTLY!!!

    I suggested the same within minutes of first hearing of this trade. (Is it just a coincidence that the reported cash outlay [$1.5M] is just about exactly what the Rockets have left from their 2013-14 annual cash limit [$1.48M]?)

    My hope is that the Rockets can structure this as two trades. (I haven't been reading much of the BBS since the Asik trade news broke, so I'll assume that basketballholic already laid out the mechanics.)

    But "agreeing in principle" is not the same as actually consummating a trade. So, unless the Rockets actually complete a trade to send cash to New Orleans (for SOMETHING) by June 30, then the $1.5M cash payment will come out of the Rockets' $3.3M annual cash limit for 2014-15, leaving only about $1.8M left to use in a Lin trade.
     
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  10. ForTheWinYes

    ForTheWinYes Member

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    But aren't simultaneous/contingent trades illegal unless otherwise specified in the CBA (sign and trade)? It would be great if true though.
     
  11. TheRealAllpro

    TheRealAllpro Morey only fan

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    Oh man this is huge. Having the full allotment, yes please. thanks for the details.
     
  12. basketballholic

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    My suggestion is for purposes of amalgamating a trade after July 1 the Rox could simply send the $1.48 million to New Orleans for Luke Babbit's non-guaranteed deal. Jeff Withey's non-guaranteed deal would also be eligible for such a transaction but I doubt New Orleans would be stupid enough to ship that out to us for the cash. This would leave the entire $3.3 million (or $3.28 million to be more precise) available to send out with a Lin trade after the moratorium. And that trade could then be amalgamated with Asik for the pick after the moratorium as well.


    However.......I am wondering if we won't even need cash to move Lin. I am wondering if we can get by with just sending out Lin with Jones to some team in need of a temporary point guard fix that wants an asset to go along with Lin. Lots of options here with the announcement of the "agreed-upon" deal of Asik for the pick.



    Here's the true benefit of amalgamating the separate trades of Asik and Lin (and others) into one trade....we can take back more salary. If we are trying to trade for Love...it gives us more ability to take back other contracts in addition to Love. Such as Martin (or possibly Martin flipped to another team like Indy) and the expiring deals of Mbah A Moute, Shved, and possibly Barea. Not to mention the possibility of sending DMo or Jones elsewhere at the same time for a backup big like Brendan Haywood. This gives us a lot of expiring/non-guaranteed salary that we could possible cobble into other assets at the trade deadline or at some later date.

    Trading for Love isn't just about trading for Love. It's also about future trade flexibility as well.
     
  13. acshen

    acshen Member

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    My calculations:

    Key Assumptions: Jeremy Lin, Donatas Motiejunas, 2014 NBA Draft Pick #25 are all traded for cap space

    Scenario 1
    20,513,178.00 Dwight Howard 1
    14,728,844.00 James Harden 2
    2,875,130.00 Chandler Parsons Qualifying Offer 3
    1,618,680.00 Terrence Jones 4
    915,243.00 Patrick Beverley 5
    816,482.00 Isiah Canaan 6
    816,482.00 Robert Covington 7
    816,482.00 Troy Daniels 8
    507,336.00 Incomplete roster charge 9
    507,336.00 Incomplete roster charge 10
    507,336.00 Incomplete roster charge 11
    507,336.00 Incomplete roster charge 12
    18,070,135.00 Free Agent 13
    63,200,000.00 2014-2015 Projected Salary Cap

    23,333,405.00 Carmelo Anthony 2014-2015 Opt-out Salary
    (5,263,270.00) Carmelo Anthony deficit
    20,590,000.00 LeBron James 2014-2015 Opt-out Salary
    (2,519,865.00) LeBron James deficit

    In scenario 1,Carmelo seems a bit unrealistic at ~$5.3mm less for the first year. Will be quite a lot over the course of 4 year contract (~$22MM). LeBron seems more realistic at $2.5MM less for the first year, which will be closer to a $10MM difference.

    Scenario 2 - Chandler Parsons is renounced or traded for non-2014 draft picks
    20,513,178.00 Dwight Howard 1
    14,728,844.00 James Harden 2
    1,618,680.00 Terrence Jones 3
    915,243.00 Patrick Beverley 4
    816,482.00 Isiah Canaan 5
    816,482.00 Robert Covington 6
    816,482.00 Troy Daniels 7
    507,336.00 Incomplete roster charge 8
    507,336.00 Incomplete roster charge 9
    507,336.00 Incomplete roster charge 10
    507,336.00 Incomplete roster charge 11
    507,336.00 Incomplete roster charge 12
    20,437,929.00 Free Agent 13
    63,200,000.00 2014-2015 Projected Salary Cap

    23,333,405.00 Carmelo Anthony 2014-2015 Opt-out Salary
    (2,895,476.00) Carmelo Anthony deficit
    20,590,000.00 LeBron James 2014-2015 Opt-out Salary
    (152,071.00) LeBron James deficit

    Scenario 3 - Terrence Jones & Chandler Parsons traded or renounced for non-2014 draft picks
    20,513,178.00 Dwight Howard 1
    14,728,844.00 James Harden 2
    915,243.00 Patrick Beverley 3
    816,482.00 Isiah Canaan 4
    816,482.00 Robert Covington 5
    816,482.00 Troy Daniels 6
    507,336.00 Incomplete roster charge 7
    507,336.00 Incomplete roster charge 8
    507,336.00 Incomplete roster charge 9
    507,336.00 Incomplete roster charge 10
    507,336.00 Incomplete roster charge 11
    507,336.00 Incomplete roster charge 12
    21,549,273.00 Free Agent 13
    63,200,000.00 2014-2015 Projected Salary Cap

    23,333,405.00 Carmelo Anthony 2014-2015 Opt-out Salary
    (1,784,132.00) Carmelo Anthony deficit
    20,590,000.00 LeBron James 2014-2015 Opt-out Salary
    959,273.00 LeBron James deficit
     
    #133 acshen, Jun 26, 2014
    Last edited: Jun 26, 2014
    1 person likes this.
  14. acshen

    acshen Member

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    According to my calculations, the Rockets only have $16.8mm in cap space if they trade Asik, Lin, Motiejunas, and our 2014 first rounder for non-2014 player contracts (cap or future picks). That number becomes $18.9mm if we renounce or trade (far more likely than renouncing) Chandler Parsons, and $19.7mm if we also add in Terrence Jones.

    The $19.7mm number means LeBron is taking roughly $900k paycut (less than $5mm difference over the entire contract) on the first year, while Melo would be taking a $3.6mm paycut per year (about $15-16mm over the course of the contract).

    That means if we do land a marquee agent I think its far more likely we won't have Parsons on the roster. Parsons's qualifying offer of $2.8mm will come directly out of the free agent's paycheck each year.

    Of course, if Parsons signs an offer sheet before we are able to come to terms with a big free agent, we will likely renounce his rights.
     
  15. Ming The King

    Ming The King Member

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    Question:
    Is it possible sign Lebron with the 16,8 million cap space and then S&T Parsons for Kevin Love or Carmelo?
     
  16. micah1j

    micah1j Member

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    I thought roster charges (cap holds) for incomplete roster were at the rookie minimum, not second year player minimum ?
     
  17. BimaThug

    BimaThug Resident Capologist
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    Correct. Incomplete roster charges are equal to the rookie minimum salary, which will be $507,336 for the 2014-15 season.
     
  18. acshen

    acshen Member

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    Oh my mistake. Thanks guys.
     
  19. Goat Herders

    Goat Herders Member

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    Good grief.
     
  20. micah1j

    micah1j Member

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    $507,336. So the Rockets would probably waive Daniels, Covington & Canaan to free up that 1 million or so in cap space.
     

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