While other teams around the NBA were busy making blockbuster moves this offseason, the Houston Rockets only made a pair of minor additions. They signed veteran guard Marcus Smart to a two-year, $12.4 million contract using the taxpayer mid-level exception (which hard-capped them at the second apron) and added veteran wing Bogdan Bogdanović on a one-year, veteran-minimum contract.
The Rockets’ most notable move was signing restricted free agent Tari Eason to a five-year, $81.5 million contract. That was a continuation of a trend that might help extend the Rockets’ championship window.
Since the NBA’s latest collective bargaining agreement went into effect in 2023, the Rockets have arguably been the league’s most shrewd team in contract negotiations. As other teams start to face financial reckonings in fear of the punitive second apron, the Rockets have locked up most of their core on team-friendly contracts.
If they’re able to continue that trend moving forward, it could give them a clear advantage over their Western Conference counterparts who’ve been handing out max contracts without thinking twice.
The Rockets’ Negotiating Wins
The Rockets put the league on notice when they agreed to extensions with 2021 No. 2 overall pick Jalen Green and No. 16 overall pick Alperen Şengün ahead of the rookie-scale extension deadline in October 2024.
Şengün was coming off a season in which he averaged a career-high 21.1 points, 9.3 rebounds and 5.0 assists. Under the NBA’s previous CBA, he likely would have been a no-brainer max-contract player. Instead, he wound up settling for nearly $40 million less than what he could have received from the Rockets as a free agent.
Meanwhile, Green agreed to a three-year, $105.3 million extension with a third-year player option. ESPN’s Shams Charania noted he was the first player “ever to successfully negotiate a 2-plus-1 rookie extension on a nine-figure deal” and that the player option gave Green “the ability to increase his earning potential down the road.” However, Green was the only top-four pick from the 2021 draft not to get a full five-year max deal even though he averaged nearly 20 points per game across his first three seasons.
Why did the Rockets play hardball with both Şengün and Green when other teams were handing out massive contracts to 2021 first-round picks that offseason? They might have been concerned about Green’s dismal efficiency—he shot only 42.1% across his first three seasons—and Şengün’s defensive ability and lack of three-point shooting. By giving them below-max deals, they hedged their bets on both players.
The following offseason, the Rockets included Green in their trade package for 15-time All-Star and two-time NBA champion Kevin Durant. Had the Rockets signed Green to a max extension, it’s unclear whether the Phoenix Suns would have been as amenable to taking him as part of the return for Durant.
Not even Durant was spared from the Rockets’ negotiating prowess, though. Upon his arrival in Houston, he was eligible to sign a two-year extension worth roughly $120 million. Instead, the Rockets locked him up on a two-year, $90 million deal that’s worth less than 27% of the salary cap each season.
One week after the Rockets agreed to trade for Durant, they came to terms with 2022 No. 3 overall pick Jabari Smith Jr. on a five-year, $122 million contract. It begins at $23.6 million this coming season, drops to $21.75 million next year—we’ll circle back to that shortly—before going back up by $1.9 million in each of the final three seasons. Smith is never projected to earn more than 15% of the salary cap in any year of his deal.
Eason’s contract is even more of a steal. It ascends by roughly $1.1 million every season and is never projected to be worth even 10% of the salary cap. His starting salary ($14.05 million) is roughly $1 million less than the non-taxpayer mid-level exception ($15.044 million) this year.
According to ESPN’s Brian Windhorst, the Rockets offered Eason a five-year deal worth more than $100 million ahead of the rookie-scale extension deadline last fall, although Windhorst clarified that he didn’t know “how much of it would have been guaranteed.” ESPN’s Tim MacMahon later revealed that the Rockets’ offer contained only $65 million of guaranteed money, so Eason secured more guaranteed money with his new contract, even if the overall value is lower.
That shrewd negotiating has the Rockets in a healthy place financially moving forward. In 2027-28, Şengün, Smith and Eason are set to earn only $74.2 million combined, while Durant has a $46.1 million player option. They have an additional $19.2 million tied up in Steven Adams and Clint Capela, while Reed Sheppard will be earning $14.0 million in the final year of his rookie-scale deal.
The Rockets aren’t out of the woods yet, though. In fact, their toughest negotiations may still lie ahead.
The Amen Thompson Dilemma
While the Rockets already signed Eason to an extension, he wasn’t their only first-round pick in 2023. They spent the No. 4 overall pick on Amen Thompson, who has quickly developed into a cornerstone in Houston.
This past season, Thompson set new career highs in points (18.3), assists (5.3), steals (1.5) and minutes (37.4) per game. He also averaged 7.8 rebounds, which was third on the team behind only Şengün and Adams. After earning a first-team All-Defense nod and finishing fifth in the Defensive Player of the Year race in 2024-25, Thompson was eighth in DPOY voting last season.
The only problem is that he’s a dismal three-point shooter. Through the first three years of his career, he’s gone 58-of-265 (21.9%) from deep. Until he becomes more of a threat from three-point range, opponents will sag off him and dare him to beat them from distance, especially in the playoffs.
Şengün’s lack of three-point shooting only compounds that issue for the Rockets. Having two non-shooters in the starting five might be Houston’s Achilles’ heel unless Şengün and/or Thompson drastically improve their efficiency from deep.
That could complicate Thompson’s ongoing extension talks, too. The Rockets have until Oct. 19 to sign him to a rookie-scale extension. If Thompson doesn’t agree to one by then, he’ll become a restricted free agent in 2027.
In mid-May, Varun Shankar of the Houston Chronicle warned that the Rockets were unlikely to give Thompson a max extension.
“Such a contract would pay him a quarter of the salary cap over the next few seasons, but the impressive guard/forward still faces enough questions about his shot and eventual offensive profile,” Shankar wrote. “That, combined with the Rockets’ precedent of getting relatively team-friendly extensions (see Şengün, Alperen, above) should keep him in the ballpark of 20-23% of the salary cap.”
The Rockets could always decide to table extension talks and let Thompson become a restricted free agent, although they’d run the risk of another team offering him a full max contract next offseason. Waiting would allow them to see what happens with VanVleet, who’s set to become an unrestricted free agent, and Durant, who could join VanVleet in unrestricted free agency by declining his $46.1 million player option.
Long-term, the Rockets also need to be budgeting for Sheppard, who becomes extension-eligible next offseason. Internally, they believe Sheppard “has the potential to develop into an all-time great, such as former Phoenix Suns point guard Steve Nash, if given enough time and the right conditions,” according to MacMahon and ESPN’s Ramona Shelburne.
Juggling all of these financial considerations helps explain why the Rockets weren’t more aggressive this offseason as Giannis Antetokounmpo, Jaylen Brown, Kawhi Leonard and LaMelo Ball all changed hands via trade. A “high-ranking Rockets source” told MacMahon and Shelburne that they were “hyperfocused” on their young core and didn’t feel win-now pressure despite having Durant on their roster.
“Our five guys have a chance to win a lot of games together for a long time,” the source added. “We don’t want to make the mistake other teams have of giving up on guys too soon. We want a 10-year run.”
The second-apron era is shortening title windows across the league, so a 10-year run might not be realistic for the Rockets or any other team. But the more that the Rockets get their core players signed to team-friendly, well-below-max contracts, the better chance they’ll have of remaining in the championship picture.
Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM. All odds via FanDuel Sportsbook.
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