Rockets offseason primer: James Harden possibility, max cap space, draft picks, more
The Houston Rockets appear poised to end their rebuild after three consecutive seasons at the bottom of the standings. Since trading James Harden, they’ve been focused on accumulating draft picks and developing their young players. Now it seems like a reunion with Harden is near as they look to sign him with their cap space for a playoff push.
Here is a preview of the 2023 offseason for the Houston Rockets.
State of the roster and cap space
Troy Taormina-USA TODAY Sports
The Rockets are motivated to make a playoff push for several reasons. For starters, three years in the lottery is more than enough bites at the apple to find building blocks. They’ve drafted well and need to start getting their prospects to play meaningful basketball in order to progress their development.
Another factor toward starting to compete now is the fact that the Rockets owe the Thunder Top 4 protected first-round picks in 2024 and 2026. It makes sense for Houston to start trying now considering the odds are against them for keeping those picks.
The Rockets are heading into the offseason with 13 players under contract, including their two first-round picks and two players on non-guaranteed contracts. They are projected with $62.3 million in cap space after getting the fourth overall pick in this year’s draft and could get to $64.2 million if they waive the non-guaranteed salary of Daishen Nix. That is more cap space than they may need considering that amount is $17.3 million more than the highest maximum salary slot.
The smoke surrounding James Harden and a potential return to Houston has been brewing since Christmas. Since then there have been more and more reports substantiating the possibility. Whether or not this is also a leverage play to get the Sixers to give him his desired contract is still unclear. But whether it’s this year or in a future season, Harden’s desire to return to Houston seems to be real.
The Rockets are eligible to sign Harden this summer for up to four years, projected at $201.7 million. That is only $8.4 million less than the maximum amount the Sixers can re-sign him to, so there is no significant financial disadvantage if he leaves them. Houston would still have a lot of spending power left after presumably signing Harden, including $15.5-$17.2 million in cap space as well as the $7.7 million room mid-level exception.
Just signing Harden alone might not be enough to get the Rockets back into the playoffs in such a loaded Western Conference. He should be able to raise their floor from one of the league’s worst teams to potentially being in the play-in mix. A playoff seeding is definitely possible depending on what else they can do with their remaining flexibility to improve the roster.
If they don’t sign Harden, they would presumably pursue some of the other top free agents on the market including Khris Middleton, Kyrie Irving, Fred VanVleet, and Draymond Green. If they do sign Harden, they could target another top free agent by trading the $15.9 million salary of Kevin Porter Jr. without taking anyone back and waiving Nix. This would leave them with approximately $33 million in cap space to pursue another big name.
Draft picks and trade possibilities
Dale Zanine-USA TODAY Sports
Houston’s lottery night didn’t go as they’d hoped after dropping from the second-best lottery odds to landing the fourth overall selection. This puts them outside of selecting any of the consensus Top 3 players in this year’s draft featuring Victor Wembanyama, Brandon Miller, and Scoot Henderson. The Rockets prayed for Victor, but the lottery gods said Amen. Most preliminary mock drafts currently have them selecting Amen Thompson with the fourth overall pick.
The Rockets are expected to gauge the trade market for the pick considering their competitive intent for next season. Assuming they sign Harden, their starting lineup would include him, Jalen Green, Jabari Smith Jr., and Alperen Sengun. They could target a veteran All-Star wing in a trade using a combination of the No. 4 pick, the 20th overall pick, and up to a maximum of four additional first-round picks (2024 and 2026 via Brooklyn, and their own in 2028 and 2030).
If the Rockets cannot sign a second top free agent after presumably signing Harden to a max, they could use their cap space to pursue an All-Star in an uneven trade. They could acquire a player earning just north of $40 million by sending out the 4th overall pick and Porter Jr. Their combination of trade assets and flexibility could put them in the mix for just about any player who becomes available in what could be a period of “unbelievable star player movement”.
Potential free agent or extension-candidate: KJ Martin
Troy Taormina-USA TODAY Sports
Houston’s most significant player currently on the roster whose future they need to address is KJ Martin. He just completed his third season and has a $1.9 million team option which is also non-guaranteed. If the Rockets decline the option, he will become a restricted free agent this summer. If they pick it up, he will become an unrestricted free agent next summer. He also can avoid free agency and extend by June 30.
Martin established himself as a rotation player this season and started in the majority of Rockets games. His 49 starts qualified him for the starter’s criteria which will increase his qualifying offer this summer from $2.2 million to $5.2 million, provided the Rockets make him a restricted free agent. Declining his team option and making him a restricted free agent now allows Houston to secure his future while eliminating the risk of unrestricted free agency in 2024.
The Rockets can re-sign Martin this summer while still fulfilling their cap space goals. For example, they could utilize all $60 million or so of their space and then go over the cap to re-sign him to a long-term deal with his Bird rights. They could come to a verbal agreement with him, and then rescind his qualifying offer to reduce his cap hold from $5.2 million to $2 million. This would give the Rockets an additional $3.2 million in cap space for their bigger picture cap space goals before subsequently re-signing him.
Martin could also be an immediate beneficiary if the Rockets aren’t successful in utilizing all of their cap space. That’s because he would become eligible for a renegotiation and extension if the Rockets pick up his team option. For example, if they sign Harden to a max but strike out with the remainder of their cap space, they could use it to increase Martin Jr.’s $1.9 million salary and extend him for up to an additional four years.
By giving Martin an immediate raise, they could look to keep the subsequent years under team-friendly cap hits. That’s because in a renegotiation and extension, the Rockets would be able to reduce his second-year salary by as much as 40 percent. Here’s what a potential framework could look like with the 40 percent drop and 8 percent annual decreases:
2023-24: $19,000,000 ($17.1 million raise)
2024-25: $11,400,000
2025-26: $10,488,000
2026-27: $9,576,000
2027-28: $8,664,000
This framework would total in $59.1 million over five years with $17.1 million of it paid upfront. It distributes his salary early in exchange for cap and tax relief in future seasons for the Rockets.
2023-24 SALARY SITUATION
Players rostered: 13
Guaranteed salaries: $67.9 million
Non-guaranteed salaries: $3.8 million
Total salary: $71.7 million
Luxury tax space: $90.3 million
First apron space: $92.1 million
Second apron space: $102.6 million
Spending power:
Cap space: $62.3-65 million
Room mid-level exception: $7,609,000
Christian Wood trade exception: $3,892,917 (expires June 26, 2023)
Eric Gordon trade exception: $3,089,360 (expires February 9, 2024, will be renounced when Rockets generate cap space)
Marquese Chriss trade exception: $293,920 (expires October 2, 2023, will be renounced when Rockets generate cap space)
Kevin Porter Jr.
Troy Taormina-USA TODAY Sports
2023-24 salary: $15,860,000
Remaining salary guaranteed: $15,860,000
Additional notes:
2024-25, 2025-26, and 2026-27 (team option) salaries are each for $15.9 million and are non-guaranteed.
$4.8 million in annual unlikely incentives.
Jalen Green
Troy Taormina-USA TODAY Sports
2023-24 salary: $9,891,480
Remaining salary guaranteed: $22,374,528 through 2024-25
Jabari Smith Jr.
Kirby Lee-USA TODAY Sports
2023-24 salary: $9,326,520
Remaining salary guaranteed: $31,447,792 through 2025-26
Jae'Sean Tate
(AP Photo/Bebeto Matthews)
2023-24 salary: $6,500,000
Remaining salary guaranteed: $6,500,000
Additional notes:
2024-25 salary is a team option worth $7.1 million.
$500,000 in annual unlikely incentives.
Alperen Sengun
Troy Taormina-USA TODAY Sports
2023-24 salary: $3,536,280
Remaining salary guaranteed: $8,960,934 through 2024-25
Stephen R. Sylvanie-USA TODAY Sports
2023-24 salary: $3,527,160
Remaining salary guaranteed: $12,898,086 through 2025-26
(AP Photo/Michael Wyke)
2023-24 salary: $2,588,400
Remaining salary guaranteed: $6,980,915 through 2024-25
Troy Taormina-USA TODAY Sports
2023-24 salary: $2,485,200
Remaining salary guaranteed: $6,831,815 through 2024-25
TyTy Washington Jr.
David Banks-USA TODAY Sports
2023-24 salary: $2,320,440
Remaining salary guaranteed: $9,139,619 through 2025-26
KJ Martin
Scott Wachter-USA TODAY Sports
2023-24 salary: $1,930,681 (team option)
Remaining salary guaranteed: $0
Additional notes:
2023-24 salary is non-guaranteed. Fully guaranteed if not waived by June 29.
Extension-eligible and renegotiation-and-extension eligible throughout 2023-24 if team option is picked up.
Daishen Nix
Alonzo Adams-USA TODAY Sports
2023-24 salary: $1,836,096
Remaining salary guaranteed: $0
Additional notes:
2023-24 and 2024-25 salaries are non-guaranteed.
DJ Augustin
Scott Wachter-USA TODAY Sports
Cap hold: $1,989,698
Type of free agent: Non Bird (unrestricted)
Willie Cauley-Stein
Jerome Miron-USA TODAY Sports
Cap hold: $1,989,698
Type of free agent: Non Bird (unrestricted)
Frank Kaminsky
Brett Davis-USA TODAY Sports
Cap hold: $1,989,698
Type of free agent: Non Bird (unrestricted)
Boban Marjanovic
Wendell Cruz-USA TODAY Sports
Cap hold: $1,989,698
Type of free agent: Bird (unrestricted)
Darius Days
Cap hold: $1,774,999
Type of free agent: Non Bird (restricted)
Trevor Hudgins
Cap hold: $1,774,999
Type of free agent: Non Bird (restricted)
2023 Pick No. 4
2023-24 salary: $8,678,400
Remaining salary guaranteed: $39,413,737 through 2026-27
Additional notes: HoopsHype and ForTheWin’s draft expert Bryan Kalbrosky has Amen Thompson as the 4th overall selection in his most recent mock draft.
2023 Pick No. 20
2023-24 salary: $3,170,280
Remaining salary guaranteed: $15,363,237 through 2026-27
Additional notes: HoopsHype and ForTheWin’s draft expert Bryan Kalbrosky has Olivier-Maxence Prosper as the 20th overall selection in his most recent mock draft.
You can follow Yossi Gozlan (@YossiGozlan) on Twitter.
