In terms of roster construction, the Houston Rockets have been a roller coaster ride all season. For starters they didn’t re-sign Trevor Ariza and Luc Mbah a Moute over the off-season and traded Ryan Anderson, De’Anthony Melton to the Suns for Marquese Chriss and injury prone Brandon Knight. It was pretty clear that these were salary cap saving moves on the Rockets part since giving Clint Capela and Chris Paul big money contracts have put them well into the luxury tax. The Rockets thought that they could find 50-80% of the production that Ariza, Moute, Melton and Anderson produced for a fraction of the cost through league minimum contracts. As I pointed out over the summer I wasn’t the fondest of these moves especially letting Ariza walk. I didn’t think that this was the best time to be “cost effective” while the season before they traded for Chris Paul in what was described as an “all-in” move. If the Rockets are in win now mode then why not re-sign Ariza and make another run at the Warriors?
Even though I wasn’t a fan of these penny pinching moves I understood the premise and waited to see who they would sign to replace Anderson, Melton, Moute and Ariza. To my dismay they signed Carmelo Anthony, James Ennis and Michael Carter-Williams. I still assumed the Rockets were going to be great offensively but after the moves they made thought surely their defense would fall off from being ranked in the top 10 the season prior. It was worse than what I originally thought. The Rockets started the season off 1-5 through 6 games and 11-14 through 25 games. The obvious was becoming obvious for Daryl Morey and the Houston Rockets. Their season was on the brink and they had to righten the wrongs they made over the off-season.
The Rockets first move was to let Carmelo Anthony go. He’s still technically on the roster since the Rockets are trying to find a trade partner instead of just releasing him but nevertheless he’s not with the team. They also benched Michael Carter-Williams and then later on traded him to the Bulls to free up a roster spot. They also cut James Ennis’ minutes down from 26 from the start of the season to 14 over the past month. Morey and the Rockets made up for those questionable off-season moves and signed Austin RIvers to a rest of the season league minimum contract. Rivers has been a great pickup averaging 13.3 points on 39.7% from three in 11 games so far with the Rockets. The Rockets also converted undrafted rookie Gary Clark from a two-way contract to a pro contract by using a portion of their taxpayer mid-level exception for three years in length. I dedicated a whole article during November detailing why the Rockets should convert Clark’s contract from a two-way to a pro style contract; obviously I’m a fan.
But one of their most significant moves was the pick up of Danuel House jr. Even though signing Rivers and Clark were moves I liked they were still searching for a requisite replacement for Ariza. Then here comes House jr who is averaging 9 points on 39% from three and playing solid team defense through 25 games with the team. Over the last month House is averaging 11 points on 47% from three and has been giving the Rockets an adequate level replacement for Ariza on the cheap. House has a +5.4 net efficiency rating while on-court which was better then the team’s overall net efficiency rating of +2.1; clearly House was meshing well with his new team. House was cut during training camp by the Warriors even though he played pretty well over his last few pre-season games. The Rockets ended up picking him up after he cleared waivers, placed him on the Rockets g-league affiliate the Rio Grande Valley Vipers then signed him to a minimum contract.
Here’s where it gets interesting. Since the Rockets wanted to convert Clark from a two-way to a pro style contract they had to free a roster spot. You can’t convert a two-way contract without a free roster spot. So the Rockets put House on waivers, freeing a roster spot and signing Clark to a three year deal. The Rockets then used their newly opened two-way contract on House so they didn’t lose him. However from that point forward House became an integral part of the Rockets new found success and started 12 games with Chris Paul and Eric Gordon injured. The two-way contract only allows a player 45 days to be spent with the pro team and the rest of the time with the g-league affiliate. With the 45 day time frame about to expire the Rockets and House were working on a deal to keep him with the pro club after trading Michael Carter-Williams away and freeing up a roster spot. This is where it gets complicated.
The Rockets don’t have many options in the way of signing players due to being a taxed team. They only have the league minimum, the taxpayer mid-level exception and a players bird rights to make roster upgrades outside of making trades of course. So when they have a quality young player like House they don’t want to lose him after one season. The options for Houston to sign House to a long term deal would be through the league minimum or the taxpayer mid-level exception. It was recently reported (Link) by Tim MacMahon of ESPN that House turned down the Rockets initial contract offer of three years league minimum non-guaranteed deal. After House obviously turned down that deal the Rockets offered him a three year league minimum guaranteed deal which House still turned down. House wants to capitalize on his recent success and either wants a portion of the taxpayer mid-level exception or a one year minimum deal which would make him a restricted free agent this summer and possibly sign a bigger contract with another team.
The Rockets have already used a portion of their taxpayer mid-level exception on players Isaiah Hartenstein and Gary Clark as a result only having $3.9 million remaining. You might be asking yourself, why won’t the Rockets just sign him with that then? Are the Rockets being cheap again like they were with Ariza? The problem is the Rockets want to keep the remaining money on their taxpayer mid-level exception so they can have a leg up on the buyout market come February. If players like Demarre Carroll get bought out the Rockets are going to want a bigger salary incentive so they can have an advantage over teams like Golden State or the Lakers. The Rockets might also be hesitant to use the taxpayer mid-level on House because while he has been rather good for the Rockets it has been a small sample size. House did play for the Suns last season, shot only 26% from three and has been inconsistent from three for most of his basketball career shooting 33.8% from three during his 4 years at Texas A&M. Why make a heavy investment in House for the Rockets when they think they can do better on the buyout market?
House and his agent the Raymond Brothers see the market as booming for his skill set as the NBA is low on quality 3-and-D swing forwards. If House signs a rest of the season one year deal worth the minimum he would be a restricted free agent this summer and the Rockets would have the right of first refusal which means they could match any offer made on the open market for him but the Rockets are limited in what they can offer due to stipulations in the Collective Bargaining Agreement. For starters the Rockets don’t have his bird rights and only have his non-bird rights which means they can pay him only 120% of his last contract which would be around $1.7 million. House and his agent clearly think they will get more than that on the open market. So to match any deal made for House (not above the taxpayer mid-level) the Rockets would have to use their new taxpayer mid-level exception which is worth $5.3 million in total. The Rockets however want to save that to re-sign Austin Rivers or for some other free agent. That’s why the Rockets want to avoid signing House to a rest of the season one year deal since they might not be able to re-sign him even though they hold his restricted free agency. That’s why the Rockets are offering House a three year deal at the league minimum because after the deal is up the team would own his bird rights and can pay him whatever at that point. But House and his agent want to cash in on his recent success as soon as possible and either want to be a free agent this summer or the Rockets use a portion of their remaining $3.9 million taxpayer mid-level to sign him now.
With the two sides not coming to an agreement House will be sent down to the Rio Grande Valley Vipers in the meantime. The Rockets are in a pickle. They don’t want to lose House but they don’t want to use their best modes of upgrading their roster for a g-leaguer who had a good month of basketball. They want to re-sign Austin Rivers this summer and they want to go hard after buyout candidates in a month and to do that they are going to need their taxpayer mid-level exception. With the recent injury to Clint Capela, House and his agent think they have some leverage in this situation. While somewhat true James Harden is on a tear scoring 30 points or more in 17 straight games. So for the Rockets they think they can hold out giving what House wants since Harden could make up the difference in lost scoring plus Eric Gordon should be back soon.
I’m going to assume the Rockets hold out on making a final decision on House until players start being bought out around the trade deadline. If they don’t see any player worth the the taxpayer mid-level then they probably re-sign House with the exception. But if the Rockets sign someone with the $3.9 million taxpayer mid-level things will get interesting. Will House and his agent cave and sign the three year guaranteed minimum deal? That really is the going rate for a player in House’s position and maybe they don’t want to over estimate the market for a g-leaguer who played well for a stretch of a month. Or will House hold out until the Rockets give up and sign him to a rest of the season league minimum deal? The Rockets are looking to sign a player to a 10-day contract to replace House in the meantime; this could have a huge impact on who blinks first. I understand why both sides are doing what they’re doing. House is betting on himself while the Rockets want to keep him long term without using any of their best options to sign another player. The buyout market is about a month away. Can the Rockets afford to last that long without House? Will James Harden tire himself out carrying the weight of an undermanned team?
I like House a lot and think the Warriors misevaluated him when they cut him during training camp. He’s probably playing over his head right now because James Harden makes everybody better. House might not be as good if he were on the Charlotte Hornets but there is still value he brings to the Rockets. Veterans like James Ennis, Michael Carter-Williams and Carmelo Anthony weren’t having the type of success House is having with James Harden and it’s not a guarantee that bringing someone in after the trade deadline will match House’s production. I’m not sure what the exact salary figure would be to entice House to re-sign with the Rockets but I’d use it now and worry about the buyout market when the time comes. Again though, I have no problem with Houston holding out on House since they think a lot of his success is derived off James Harden and they can find another g-leaguer to take his spot for less money. Most likely House’s production isn’t sustainable and he falls off some but at the rate he’s playing paying him around $2.5-4 million a season for three years at 25 years old would be a bargain even with a drop off. Maybe nobody like Marco Belinelli or Ersan Ilyasova gets bought out like last season and the Rockets are just posturing. Maybe when the Rockets give House his contract he stops playing so well and reverts back into a g-leaguer. But what I do know is that House is playing good at a position of need, he fits with the team and ever since he was inserted into the starting lineup the Rockets have joined the contenders conversation again. Overall this is a situation to monitor because the Rockets could easily bungle this up and let a coveted 3-and-D swing froward walk.