On Sunday, GM Daryl Morey struck again when the Rockets made the trade to bring in point guard Ty Lawson. While the deal may not go down in the annuls of the NBA as the greatest trade in history, when you peel back the curtain of this Rockets offseason and dig into the numbers you can’t help but come away impressed.
And while many fans may not have much of an understanding of the NBA’s Collective Bargaining Agreement (CBA), which gives NBA teams most of their salary and transactional rules, we’ll do our best to explain the rules as they pertain to this and the transactions leading up to the Lawson trade as well as where it leaves the Rockets currently.
The Rockets traded Kostas Papanikolaou, Pablo Prigioni, Joey Dorsey, Nick Johnson and a lottery protected 2016 1st round pick to the Nuggets for Ty Lawson and a 2017 2nd round pick. That’s arguably the last four guys on the Rockets current roster. Papanikolaou and Prigioni both have non-guaranteed or partial guaranteed contracts for the upcoming season and may be released (Prigioni already released).
As the Rockets came into the offseason, Daryl Morey to Kevin McHale to James Harden to the relatively serious fan knew that the Rockets needed another playmaker on the offensive side of the ball. Having ramped up the defensive side of the ball significantly in recent years with Patrick Beverley, Trevor Ariza, Corey Brewer and Dwight Howard, the Rockets were squeezed in key moments in the offseason, when double and triple teams were throw at Harden, the teams only real playmaker that could create for himself and others.
May 25, 2015; Houston, TX, USA; Houston Rockets guard James Harden (13) speaks to the media after the victory against the Golden State Warriors in game four of the Western Conference Finals of the NBA Playoffs. at Toyota Center. Mandatory Credit: Troy Taormina-USA TODAY Sports
Another factor has been Harden’s minutes, leading the NBA in minutes played in the 2014-2015 season. While he wouldn’t admit that he wore down in the playoffs, immediately after season’s end he admitted that the Rockets needed someone that could shoulder some of the load in the backcourt, which the veterans and even a healthy Patrick Beverley simply cannot do, at least not the playmaking role.
If you don’t think Lawson can be that for the Rockets, think again and check out this highlight clip from this season.
The Rockets did their due diligence for this offseason – as is smart business – which was to kick the tires on LaMarcus Aldridge because he was at least willing to give them an audience. As expected, though, they lost out the Spurs. But Daryl Morey had a plan.
The Rockets did not panic and instead went with their plan A (or B), re-signing Patrick Beverley and a few days later Corey Brewer.
Then the crazy twist that was DeAndre Jordan occurred, initially leaving smart Rockets fans glad he was headed to Dallas and thereby severely hurting the Los Angeles Clippers only have a change of hurt and spurn the Mavericks.
Some Rockets fans, as it is their right, delighted in Mark Cuban, Chandler Parsons and the Mavericks feeling that painful loss that was a swift kick to their offseason. But some Rockets fans, as they should be, are alarmingly concerned at how good the Clippers could be this next season having added some significant pieces. But Daryl Morey had a plan.
Then Josh Smith chose to take the Clippers veteran minimum salary offer of $1.5 million over what is believed to be the Rockets offer of what would have been his qualified offer, with non-bird rights status, of $2.49 million.
May 14, 2015; Los Angeles, CA, USA; Houston Rockets forward Terrence Jones (6) shoots against the Los Angeles Clippers in game six of the second round of the NBA Playoffs at Staples Center. Mandatory Credit: Richard Mackson-USA TODAY Sports
This posed a two-fold concern, one because the Rockets lost Smith to the quickly improving and Western Conference rival Clippers. But what that move also did was make Terrence Jones who would have appeared available to put into a trade for a guard, not as available as we might have thought he would have been had Smith returned. But Daryl Morey had a plan.
In all likelihood, the Rockets had the makings of a trade before the Josh Smith Clippers signing or at least had a good idea of what Ty Lawson was going to cost them and it didn’t include Jones. So they thanked Smith for his contributions and said goodbye.
A few days after the Smith signing the Rockets announced the re-signing of restricted free agent K.J. McDaniels to a new three-year contract. The Rockets utilized part of the only salary exception still available to them, the non-taxpayer mid-level exception (MLE) which is $5.46 million. McDaniels will get $3.19 million in year one of his contract leaving $2.27 million of the MLE remaining. Daryl Morey had a plan.
The McDaniels signing needed to take place prior to the Lawson trade. Additionally, although some signings were “announced” such as guard Marcus Thornton, some have not been officially signed yet. Again timing is significant.
The reason timing is significant is after the Lawson trade was made with the four salaries going out along with a trade exception and Ty Lawson’s $12.4 million coming in, it pushed the Rockets total team salary much closer and even over the NBA’s tax threshold.
Sep 29, 2014; Houston, TX, USA; Houston Rockets general manager Daryl Morey poses for a photo during media day at Toyota Center. Mandatory Credit: Troy Taormina-USA TODAY Sports
The tax threshold ($84.74 million in 2015), is the point at which NBA teams must start paying a penalty or TAX back to the league to be distributed to the non-tax paying teams. The purpose is of course incentive for teams to not go too far over the league’s soft salary cap as the dollars escalate quickly beyond the actual payroll.
Another technical number in the NBA’s Collective Bargaining Agreement is the Tax Apron, which is $4 million over the Tax Threshold. The significance of this number is that any team over the Tax Apron is considered HARD capped and is very limited in their transactional movement. In the Rockets case this would have meant the remainder of the MLE, the $2.27 million that they still have at their disposal, they would no longer have. Have we mentioned Daryl Morey has a plan?
That $2.27 million, assuming the Rockets don’t spend it on veterans Jason Terry and Chuck Hayes (deals for veteran minimum won’t affect the MLE money), they will have available throughout the season to offer any free agent or a player released from another team, just like they did with Josh Smith last year. Having this, CAN give them an advantage if a player of interest becomes available, versus other playoff bound teams.
So after the Beverley and Brewer signings, letting Josh Smith go, McDaniel’s signing and the Ty Lawson five-player trade, and assuming veteran minimum deals for Jason Terry and Chuck Hayes and the official signing of rookie Montrezl Harrell, want to guess where that leaves the Rockets?
If you said just under $4 million over the Tax Threshold, thereby NOT over the Tax Apron and maintaining the rest of the MLE ($2.27 million), give yourself a prize! And if he hits that mark while on the fly with various transactions happening, that is damn impressive!
Here is the projected Rockets roster after the expected signings to round out the roster and the totals. As it stands today the Rockets will likely pay roughly $6 million in tax, barring future roster changes.
The Lawson addition while on paper looks great for the Rockets. However, it’s not without risk. Lawson has been charged with two DUI’s in the past six months and is currently in rehab in everyone’s hopes of getting his personal life together. Additionally the Rockets have stated they will reach out to NBA legend and Houstonian John Lucas to council Lawson and be a local person who has walked the walk and beaten drug and alcohol addiction, should Lawson be open to it.
The Rockets also are a veteran team, with a strong administration and player-respected coaching staff. Lawson has friends on the team in James Harden and Corey Brewer and presumably will have veterans like Jason Terry to be a leader off the court as well. And Lawson is said to be excited about the trade and happy to be on the team.
However, to top it all off, not only did Daryl Morey add the guard that the Rockets desperately needed to keep pace with the Spurs, Warriors and Clippers in the Western Conference, but as part of the deal, Lawson agreed to make the 2nd year remaining on his contract non-guaranteed.
This is HUGE and means that if things don’t go well with Lawson, the Rockets can let him go and move on next season. For Lawson it’s huge incentive to MAKE it work. If he doesn’t and if he doesn’t stay out of trouble, he will take a huge financial hit in the future and could have his NBA reputation ruined, much the way Rajon Rondo has done with his on court and locker room antics in recent years.
It’s a win-win for Lawson and the Rockets and in both of their interests to find a way to make this work.
Did Daryl Morey know from the get-go that this is exactly how the offseason would unfold for the Rockets? That’s’ doubtful. Did he even know for sure that Lawson was the player he would end up with? That’s doubtful as well.
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But he had a plan, with options A, B & C. It was also a two-fold plan, to bring back the core of the team that made it to the Western Conference Finals to allow continuity to build and to add a 2nd playmaker that the team needed. He did both.
And with this offseason and the Harden and Howard acquisition offseasons, you don’t have to look any farther to understand why Rockets fans proclaim the phrase, “In Morey We Trust!”.
Going forward the Rockets have stars, they have veterans, they have young players who still have room to improve, they have defensive players and offensive players, and though they will be paying luxury tax for the first time under the new Collective Bargaining Agreement, they still have flexibility to tweak the roster if need be.
Daryl Morey had a plan. As a result the Rockets are in good hands.
Stick with us here at House of Houston for all your Rockets offseason coverage.