Houston Rockets Reportedly Will Decline Chandler Parsons's Team Option

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What's the next power move for off-season?
During his first handful of offseasons as general manager of the Houston Rockets, Daryl Morey spent most of his time tweaking the roster, piling up small assets, and trying to work around the balky knees and feet (and massive contracts) of Tracy McGrady and Yao Ming.

Then in 2012, Morey was able to pilfer James Harden from Oklahoma City for essentially a year of Kevin Martin and a draft choice that became Steven Adams. Then last offseason, he landed the big fish, convincing Dwight Howard that Houston was the best place for him to try to win a title.

Needless to say, for Morey, for everyone here, the past two offseasons have been considerably more enjoyable than the previous five.

So what happens next? How does 2014 maintain the "go forward" momentum and how does the team keep from treading water?

Well, the first (and maybe biggest) tipping point may have been revealed last night.

As first reported by Yahoo! Sports's NBA sleuth Adrian Wojnarowski, the Rockets will decline the team option on the fourth and final year of small forward Chandler Parsons's contract, making him a restricted free agent:

The Houston Rockets plan to decline the fourth-year option on forward Chandler Parsons' contract, freeing him to become a restricted free agent this summer, league sources told Yahoo Sports.

The Rockets hold a $960,000 option on the fourth and final year of Parsons' contract for the 2014-'15 season, but want to avoid letting Parsons, 25, become an unrestricted free agent next summer. As a restricted free agent in July, the Rockets can match an offer sheet and retain Parsons on a long-term contract.

The Rockets have until June 30 to formally decline the option.

At first blush, a player's option being declined has the outward appearance that the team is no longer requiring his services and that they wish him luck in his future endeavors. Then you realize that the NBA's collective bargaining agreement has more nooks, cranes, twists and turns than every season of 24 combined and you also realize there's a method to Daryl Morey's madness.

In actuality, the Rockets' eventual decline of Parsons's über-cheap fourth-year option gives them a better chance of keeping him long-term.

Let's take a cursory look at what the Rockets' declining the option means for each of the parties involved:

What does this mean for Chandler Parsons?
For Parsons, it means he's finally going to make seven figures in an NBA season (maybe eight, depending on how crazy the market gets for him). Since signing his four-year deal after being selected in the second round (38th overall) of the 2011 NBA Draft, Parsons has been one of the most underpaid players in the league, particularly last season when he averaged 16.6 points and 5.5 rebounds per game, with his scoring average in the playoffs going up over 19 points a game. He was slated to make $960,000 in 2014-15 if the team had picked up his option.

Now, as a restricted free agent, Parsons would be available to all 29 other teams; however, the Rockets can match (and barring a crazy offer, are expected to match) any offer and retain the small forward, and go over the salary cap to do so. Restricted free agency dulls the total jackpot hat Parsons could receive as the incumbent's ability to match along with rules tying up a suitor's cap space once an offer sheet is signed while the incumbent decides what to do (a period of several days) makes teams tread lightly in pursuing restricted free agents.

The benefit to Parsons is that, in all likelihood, he will finally be making a salary in line with his production and, frankly, has a better chance of remaining in Houston at the somewhat muted salary restricted free agency will likely yield, as opposed to the Rockets having to approach max levels for a player who's good but not a max player.

What does this mean for the Rockets?
Declining Parsons's option gives them a better chance of eventually retaining him from two standpoints:

First, functionally, the Rockets still control the game. They still have final say as to whether or not they keep Parsons, since they have the ability to match any offer. (One note: Parsons's time served in the league makes him ineligible for a "poison pill" deal like the ones the Rockets used to secure Omer Asik and Jeremy Lin two seasons ago. That's important.)

Second, the encumbrances of restricted free agency will keep the Chandler Parsons Sweepstakes from turning into eBay, and for a team that appears to be heading at breakneck speed to luxury tax territory (with or without Parsons), every dollar counts (times the luxury tax factor).

Without getting into ridiculous detail (I'll leave the detail to David Weiner on the outstanding Rockets fan site ClutchFans, who does an amazing job breaking down the nuances of the ramifications of the Parsons decision.), declining the option for Parsons is not about clearing cap space. He actually counts more on the upcoming cap as a restricted free agent (until and if he were to sign elsewhere) than he does at the $960,000 salary cap hit that exercising his option would yield.

One thing this does potentially do for the Rockets is give them a big chip in a potential sign-and-trade with, say, New York (Carmelo Anthony) or Minnesota (Kevin Love), as Parsons under a new deal would have a salary that would much better facilitate a trade than if he were being paid a measly $960,000. (Again, without the excruciating detail, NBA trades often need to have the salaries of both sides match up fairly closely.)

What does this mean for the league?
The report of this move -- the timing and the move itself -- have the feel of "Daryl Morey knows something." Wojnarowski laid out a slew of very interesting names in his initial report:

Houston plans to pursue the major stars who could be available upon opting out of deals, including Miami's LeBron James and Chris Bosh, and New York's Carmelo Anthony, league sources said. Dallas' Dirk Nowitzki is expected to be a target too.

The Rockets are pursuing Minnesota's Kevin Love in trade talks too, and Parsons could hold sign-and-trade possibilities.

In one scenario, Houston could secure three max-out players -- including Howard, Harden and a potential star free agent -- and then re-sign Parsons to an extension below the max-level range. Parsons could command in the $12 million to $13 million annual range, league executives tell Yahoo Sports.

Conventional wisdom and the percentages seem to indicate that Chandler Parsons will be back as a Houston Rocket next season and several thereafter, because a) he wants to be a Rocket and b) it's really hard to pull off the type of deal that would send Parsons elsewhere for a third big star.

But Daryl Morey has made the hard look much easier than it should look each of the past two offseasons. Can he do it again?

The first step may have been revealed last night.

Listen to Sean Pendergast on SportsRadio 610 from 2 p.m. to 7 p.m. weekdays. Also, follow him on Twitter at http://twitter.com/SeanCablinasian.


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2 comments
Victor Mondragón
Victor Mondragón

Trade Parsons and Lin away for a 3rd big star. (hopefully Kevin Love!)

Geermo Toms
Geermo Toms

am I a conspiracy theorist for thinking this move hinders our 2015 cap space and seals the door shut on a run at a major star, and was likely part of a gebtlemans agreemebt between morey and dan fegan, who represents howard and parsons?

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