Breakdown Of Math Behind Rockets’ Trades

Earlier today, news broke that the Clippers will be sending Chris Paul to the Rockets in a blockbuster trade, with Lou Williams, Patrick Beverley, and Sam Dekker heading to Los Angeles. However, that trade is not yet official, and can’t be made official based on the terms reported, since it doesn’t meet the NBA’s salary-matching rules.

The Rockets are currently a little below the cap, but Paul’s salary would take them above the cap, with means they’d need to take advantage of the traded player exception to complete the deal. Based on NBA rules, Houston needs to include enough outgoing salary to get within $5MM of Paul’s 2016/17 salary, which is $22,868,827. So, if Paul is willing to waive the 15% trade kicker in his contract, the Rockets’ magic number for outgoing salary is $17,868,827.

Here are the 2016/17 cap numbers for Williams, Beverley, and Dekker:

  • Williams: $7,000,000
  • Beverley: $6,000,000
  • Dekker: $1,720,560
  • Total: $14,720,560

That package leaves the Rockets $3,148,267 short of the outgoing salary required to land Paul before the new league year begins. It’s possible Houston could wait until after July 1 to complete the deal, but the team would need to include even more salary at that point, since CP3 will get a raise, while the total value of the Rockets’ value decreases due to a slight pay cut for Beverley.

The Rockets have reportedly now added Montrezl Harrell and his $1,045,000 salary to their trade package, and have other pieces on their roster that they could include, but the majority of those players are either too valuable to move or don’t earn enough money to make up the difference.

That’s why, as David Aldridge of TNT tweets, the Rockets have been calling teams all over the league in an effort to find non-guaranteed salaries to include in the deal. A “horde” of teams is involved or trying to get involved in those discussions, according to Brian Windhorst of (Twitter links), who adds that the Rockets are telling teams they’ve assembled the necessary pieces. Since rosters expand to 20 players in the offseason, roster limits haven’t stopped Houston from adding extra players.

Because the Rockets finished the season about $3.1MM below the cap, the team can acquire players in trade using that cap space. Typically, the CBA restricts teams from trading for a player, then flipping him right away in another deal that aggregates his salary with other salaries. However, that rule doesn’t apply to players acquired using cap room.

Here’s what the Rockets have done so far today:

Liggins, Quarterman, and Kelly all have fully or heavily non-guaranteed salaries for the 2017/18 season, making them ideal trade pieces. If we assume all three of those players – plus the original four Rockets – will be included in the Paul trade, Houston now appears to be just $257,315 away from having enough salary to make the deal work, and the club still has enough cap room left to absorb up to about $1.27MM in salary.

Unless our math is slightly off, it seems the Rockets will need to include one more salary in their trade. If that’s the case, I wouldn’t be surprised if we hear by the end of the day about one last player who will make up that difference. And if Houston is able to include a little more salary than the absolute minimum required, Paul could also potentially hang onto part of his trade bonus.

[Update #1: The Rockets have reportedly agreed to acquire Darrun Hilliard ($874,636) from the Pistons. Houston now has enough players to send out for Paul, though the Clippers don’t have enough roster spots to take them all back, so the Rockets may end up involving a third team in the deal.]

[Update #2: The Rockets have reportedly included Liggins, Hilliard, and Kyle Wiltjer ($543,471) in the trade for Paul, reaching the required outgoing salary threshold without using Quarterman or Kelly.]

Salary information from Basketball Insiders was used in the creation of this post.

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