Key Sentence:
- The upcoming 2021-2022 season in the NBA will be the first for the Houston Rockets to pay the dreaded repeater tax.
Areason given in previous seasons why Houston Rockets’ Financial Situation the franchise had to cut costs every year. Even during the heyday of James Harden Prime. Suppose a team has paid the luxury tax in at least three of the last four seasons and is over the tax cap again this season. In that case, the team is eligible for high after-tax penalties and surcharges from standard sanctions under the league’s collective agreement rules.
But with Harden trading last season, it’s now a Houston Rockets’ Financial Situation new era in Houston, and rebounding is underway. Associated with this are new financial incentives and a revised perspective on cap management.
At the time of writing, the Rockets have a total taxable salary of $123.69 million. Which gives them plenty of wiggle room under the 2021 luxury tax cap of $136.61 million. The team still has their full-time taxpayer mid-waiver. Which will be retained after signing a contract to sign and trade with the Chicago Bulls to acquire Daniel Theis Center.
Observers will remember that in previous years with General Manager Daryl Morey.
It was an annual dance with the Tax Line Franchise, who had to raise the threshold when forming his team. Now no more fingers and no hope that the team will pay the luxury tax, at least not at this early stage from the recovery. But that doesn’t mean there won’t be meaningful ways to use the space the team has. General Manager Rafael Stone must treat the team space on the control line as an asset in itself.
The most obvious way is to take advantage of the mid-level exception to sign promising young players on long-term contracts than the league’s minimum allowed. Minimum wage exceptions for players limit contracts to two seasons. While mid-level exemptions are available for contracts with terms of up to four years.
At Moray, the Rockets regularly signed unprofiled free agents and second-round picks, such as striker Gary Clark. Who used his mid-range pawns to keep promising young talent under the control of a cheap club for long.
Way higher is to “rent” some of the nearly $13 million the team has under the tax line to help competitors solidify for the playoffs as well as under the tax line itself. It would be a reversal of roles when the Rockets dropped Brandon Knight’s contract to acquire Iman Shumpert in 2019. And sent the 2019 first-round pick to Cleveland.
Under that formula, the Rockets can send Daniel House to bidders. And take back long-term deals by offsetting assets for their favor. House’s $3.9 million contracts are about to expire, and his expertise could be of value to bidders.