Even though veteran NBA guard Dante Exum never played a game for the Rockets after being acquired earlier this year in the blockbuster James Harden trade, Houston inherited his full Bird rights because Exum was in the final season of a multi-year deal.
With a bit of creativity, it appears that second-year general manager Rafael Stone is ready to put those Bird rights — which allow the Rockets to exceed the salary cap to re-sign Exum — to good use.
Via Tim MacMahon of ESPN:
Sources: Rockets and PG Dante Exum are close to agreeing to creatively structured deal that would be three years, nonguaranteed and heavy on incentives that fall under “likely bonuses” definition. Deal would be worth up to about $15M, roughly half of which would be incentives.
Because the incentives would officially be considered likely bonuses, they would be included in outgoing salary if Dante Exum were to be traded. Per sources, incentives discussed are based on Exum’s average minutes and plus-minus in games played.
In short, there’s almost no risk to the Rockets, since each season of the three-year contract is non-guaranteed, and the base salary is a miniscule amount close to the league minimum. If Exum’s salary rises to the maximum amount of approximately $5 million per year — which is still well below the league average — it would be because Exum played well and provided clear on-court value to the team.
Best of all, because the incentives are considered likely under the NBA’s collective bargaining agreement (CBA), Exum’s value as outgoing salary in trades would be at the maximum figure of roughly $5 million. Between that decent figure and the reality that Exum’s contract is not guaranteed beyond a given season, Exum would widely be viewed around the league as having an “expiring” contract, which could prove very useful if Stone and the Rockets need to match salaries in a future trade.
Under the current CBA, teams above the league’s salary cap (most teams are, including the Rockets) need to send out close to as much salary as they take in for a trade to be approved. In that capacity, “matching” salaries without any long-term commitment can be very useful. When the salary figures of basketball-based trade proposals aren’t in financial alignment, teams often struggle to find acceptable filler salaries to make the math work, since many franchises don’t want to take back long-term money for a player they didn’t want in the first place. That’s where players on expiring contracts can bridge the gap.
In an ideal world, Exum’s primary value would come as a player for the Rockets. As the No. 5 overall pick from the NBA’s 2014 draft, Exum has long been viewed as an exciting talent with considerable defensive potential, and he’s still young enough at 26 years old to be a fit for a rebuilding team like Houston. The 6-foot-5 guard missed most of the 2020-21 season with a calf injury, but he looked very healthy during a strong showing this offseason with Australia at the Tokyo Olympics, and the Rockets suddenly have available minutes in the backcourt after the decision to part ways with veteran John Wall.
It’s certainly possible that Exum could become a legitimate rotation player in Houston, both in 2021-22 and beyond. But even if that’s not the case, the contract still looks like a win for the team, since there’s no long-term commitment and Exum may still have value as a trade piece.
It’s worth noting that for the Exum deal to be finalized, Stone and the Rockets must make a roster move beforehand, since they’re currently at the NBA’s maximum offseason number of 20 players. As of late Wednesday, there had yet to be a report on what that move would be.
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Source: Yahoo Sports