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New Faces, New Places: Trevor Ariza Signs With Houston Rockets

May 5, 2014; Indianapolis, IN, USA; Washington Wizards forward Trevor Ariza (1) points after scoring against the Indiana Pacers in game one of the second round of the 2014 NBA Playoffs at Bankers Life Fieldhouse. Washington defeats Indiana 102-96. Mandatory Credit: Brian Spurlock-USA TODAY Sports

May 5, 2014; Indianapolis, IN, USA; Washington Wizards forward Trevor Ariza (1) points after scoring against the Indiana Pacers in game one of the second round of the 2014 NBA Playoffs at Bankers Life Fieldhouse. Washington defeats Indiana 102-96. Mandatory Credit: Brian Spurlock-USA TODAY Sports

The Player: Trevor Ariza

The Team: Houston Rockets

The Contract: 4 years, $32 million on a declining scale; $8.6 million (Year 1), $8.2 million (Year 2), $7.8 million (Year 3), $7.4 million (Year 4)

How does it affect the cap situation?

Via the great Woj, this was technically a sign-and-trade which created an $8.5 million trade exception for the Washington Wizards. If you’d like a refresher on sign-and-trades and trade exceptions, we have you covered here and here. By acquiring Ariza via sign-and-trade, the Rockets are set to be hard-capped at the apron, $4 million above the luxury tax line.

ShamSports has the Rockets sitting at $57.596 million in salaries and cap holds, but it needs updating. This figure includes the contracts of Omer Asik and Omri Casspi, who have been traded, but does not account for Ariza. The Rockets will also be adding Alonzo Gee, so his salary will be added in as well. Gee is scheduled to make $3 million next season, although it is not guaranteed.

You can see a screenshot of the adjustments I made in excel below to get to an updated $59.758 million in salaries and cap holds.

Picture 9

You can see there isn’t a huge change; Asik and Ariza have similar numbers, and Casspi wasn’t making much.

The cap for 2014-2015 is set at $63.2 million, so the Rockets have some space to play with. $59.758 million in salaries and holds would have seemed awfully low just a few days ago when it looked like Houston was set on having both Chandler Parsons and Chris Bosh on the payroll.

How does it affect the luxury tax?

The tax threshold is set at approximately $77 million for next season, and it doesn’t look like the Rockets will touch that. They’ve dumped some serious payroll in the form of Asik and Jeremy Lin, and they haven’t spent nearly as much as was expected this offseason.

Darryl Morey wants to stay financially flexible so he can potentially add a third star next to James Harden and Dwight Howard at some point, so I wouldn’t expect Houston to approach the tax this season unless a major opportunity arises.

What’s next?

Good question. They’ve lost Parsons, Asik, and Lin, and have only added Ariza. Outside of James Harden, who creates offense from the perimeter on this roster?

The Rockets will probably try to explore the possibility of adding Kevin Love or Rajon Rondo, but it doesn’t appear as if they have the assets to realistically have a shot at either. A third team would have to get involved for facilitation purposes, but even then, I don’t see it happening.

Suddenly, the Rockets will are in the market for a rotational-level point guard and center. They’ve struck out big time so far, and it’ll be interesting to see how Morey tries to fill out a contending roster while still maintaining the financial flexibility that he craves.

Mark Evans

Mark is an accountant for PwC and a sad Boston Celtics fan. You can follow/tweet at him @JrMarkyMark