Houston Rockets vs. Chicago Bulls pursuit of Carmelo Anthony – Trade or Sign?

Feb 22, 2014; Atlanta, GA, USA; New York Knicks small forward

(7) talks to a referee after a foul in the second half against the Atlanta Hawks at Philips Arena. The Hawks won 107-98. Mandatory Credit: Daniel Shirey-USA TODAY Sports

So can the Rockets clear space to sign Carmelo Anthony outright if the Knicks refuse to play ball on a sign and trade? Short answer is yes, they can.

However, it’s not nearly as attractive of an end result as the sign and trade:

In the straight free agent signing for Carmelo Anthony as you can see the Rockets would have to make some significant salary cuts. Some are not as difficult. Jordan Hamilton, Omri Casspi, Josh Powell are all likely gone anyway and can be released. But the Rockets would have to find trades for Asik, Lin, Motiejunas, Canaan, Troy Daniels and Robert Covington.

In this scenario I chose the option of trading back during the draft from #25 to the top of the 2nd round, thereby reducing that cap hold/slot. This would allow the Rockets to offer Melo $18.5 million. This trade-back option remains a possibility no matter how the Rockets go.

Drafting a player that they can stash overseas for a year at #25 would also accomplish this as that player would not count against this year’s cap. However, it will depend on who is available when their pick comes around at #25 during the draft.

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The Rockets could go a little higher on their offer (around $20 million), by also trading Terrence Jones and Patrick Beverley but I suspect they would try to appeal to Melo’s interest in winning by retaining at least a starting point guard and Jones who would become the 6th man essentially and fill out the rest of the bench with veteran minimum players. Keeping Terrence Jones allows Melo to slide to small forward when Parsons rests.

In the straight signing scenario, the Rockets would lose the Mid-Level Exception option. They would however be able to use the Room-Mid Exception of $2.732 million. That could take a number of attractive free agents out of contention.

With the depleted bench, the Rockets would for sure need a point guard or a backup center and use the Room Mid-Exception to fill one of those positions. Jerryd Bayless or Darren Collison would be possibilities at point guard. Andray Blatche, Jordan Hill or Chris Kaman are the type of centers they may look at in that price range.

The straight signing is not impossible, but as compared to the sign and trade it leaves the roster with significantly less depth.  It’s not preferable, most likely to the Rockets or Carmelo Anthony.

The Bulls on the other hand would likely prefer a straight free agent signing.

If we stick with the premise that the Knicks have little interest in Carlos Boozer or simply that the Rockets sign and trade offers are better. And if the Bulls do not want to completely gut their team beyond stars, a straight signing may be their only option. This is a reasonable assumption given Bulls coach Tom Thibodeau’s emphasis on team defense.

In this scenario the Bulls can clear slightly more room than the Rockets by releasing non-guaranteed salaries, amnestying Carlos Boozer and trading Taj Gibson for future draft picks 2015 or beyond. Those are moves that are fairly clean and simply and not difficult at all for the Bulls to accomplish.

The Bulls could cut deeper and off load their 2014 1st round picks as well as 2013 1st round pick Tony Snell and come very close to being able to offer Melo the $23 million that he can get from the Knicks or the Rockets in sign and trade.

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In that situation they would be getting closer to what we said about the remaining team being totally absent of any depth, as with the sign and trade scenario for the Bulls but it does allow them to at least keep a starting group with Jimmy Butler and Mike Dunleavy.

Same as for the Rockets, if the Bulls go below the salary cap, in order to complete a straight free agent signing, they will no longer have the Mid-Level Exception (MLE) and will only have the Room-Mid Exception of $2.732 million in year one for the best free agent offer that they can make.

Either way, the straight signing is going to be the preferred way to go for the Bulls and the only direction that could give them an advantage over the Rockets. But that aspect is more likely only present if the Knicks refuse to do a sign and trade and are willing to lose Melo for nothing in return.

However, as we’ve stated here previously. The Bulls clearing out the space for the straight signing could work to the Rockets advantage. In that having that risk hanging over the head of the Knicks, that a more desirable team could easily pry him away with a straight free agent offer could bring the Knicks to the table willing to take the best sign and trade offer.

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Another factor for Melo will be that if the dollars are equal, the Rockets have a fairly big financial advantage over the Bulls and that is no state tax in Texas versus Illinois. In a deal of this size that can be a difference of around $10 million dollars over the life of the contract.

But in the end it could come down to two simple questions.

Does Carmelo Anthony feel better about his chances with a core of Howard, Harden, Parsons, Beverley, Jones and some young talented shooters?

Or does he feel better about a core of Noah, Rose, Butler, Dunleavy with nothing behind them and accepting the injury risk and concerns that come with Derrick Rose?

If Carmelo Anthony is the player that the Rockets choose to pursue and the Bulls are their main competition, their chances could be quite good.