Report: Rockets in contract dispute with No. 25 pick Clint Capela

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It’s been a rough offseason for Houston Rockets general manager Daryl Morey.

His plan to decline Chandler Parsons’ team option veered off track when the Mavericks gave Parsons a whopping offer sheet.

Still, Morey still had 72 hours to salvage his cap space before matching – if he could create room in the first place.

He traded Jeremy Lin to the Lakers, sending out a first-round pick to dump the productive backup point guard. But his prearranged trade of Omer Asik to the Pelicans seems to have hit an unexpected snag (though New Orleans might be positioning itself to fix the issue).

All while Morey is sorting this out, his top free agent target – Chris Bosh – decided to re-sign with the Heat on a max contract.

Still, Houston surely wants cap room to spend on other free agents before the deadline to match on Parsons.

And that’s where Morey has found even more trouble.

I, like many, assumed the Rockets drafted Clint Capela with the No. 25 pick, at least in part, because he wouldn’t join the NBA this year. If Capela signed a letter agreeing to defer signing for a season, the Rockets could immediately clear Capela from the cap. These arrangements are frequently negotiated before the draft so teams like the Rockets know whom they can draft and stash and whom won’t agree.

Currently, Capela counts against the cap at his rookie-scale amount.

The NBA and the players association, as part of the Collective Bargaining Agreement, previously negotiated a payment structure for all first-round picks depending on year and pick. The scale amount for the No. 25 pick signed in 2014 is $991,000. Teams can offer between 80 percent and 120 percent of scale, but with rare exception, players get 120 percent.

By design, there’s little room to negotiate. The NBA doesn’t want rookies holding out for monster contracts, which once happened regularly. The league has effectively made signing first-round picks a seamless process.

But occasionally there are snags.

Chris Haynes of CSN Northwest:

The Houston Rockets and their 2014 NBA first round draft pick Clint Capela are in a contract dispute following the team’s failed attempt to lure Chris Bosh from Miami, league sources informed CSNNW.com.

According to one source, for cap space, the Rockets requested that Capela spend another season in France, believing they would land Bosh in free agency. Capela’s representatives were strongly against that idea and that still stands. Friction amongst the two sides is ongoing, sources say.

There’s a $500,000 buyout to free the 6-11 forward from his French team.

I’m very surprised the Rockets didn’t know Capela’s intent when drafting him. Maybe they thought they did – but there was a clear communication breakdown, which has led to the current impasse.

The Rockets must give Capela a required tender – a standing offer worth at least 80 percent of scale – by Wednesday.

However, Houston’s real deadline is probably Sunday, when Parsons’ offer sheet becomes binding. As soon as the Rockets match, they run out of cap room unless they make other salary-clearing moves.

The Rockets could cover Capela’s full buyout without the spent money counting toward team salary. However, if they don’t want him to sign this year, why would they offer to contribute any money toward his buyout?

Houston could refuse to make Capela a required tender, allowing him to become an unrestricted free agent. Only once – the Bulls with Travis Knight in 1996 – has a team let its first-round pick go rather than offering the scale amount. I can’t believe Morey would squander an asset in that manner, though.

The Rockets could low-ball Capela, offering only 80 percent of scale and refusing to pay any of his buyout. Maybe Capela accepts that, paying his buyout out of his own pocket. If he does, his cap number would be lowered from 100 percent to 80 percent of scale, though Houston wouldn’t get it down to $0 as it would prefer.

If the Rockets toy with Capela in that way, he might not sign this year. And if he does, he could toy right back by delaying an official signature. Either way, he’d remain on the books at his current 100 percent of scale while the Rockets pursue free agents.

Unless the Rockets really need to free an extra $483,664 in cap room (Capela’s scale amount minus a minimum-salary roster charge of $507,336), they will submit the required tender. Then, they can test just how desperate Capela is to join the NBA. Houston could offer 80 percent of scale and none of his buyout this year while promising to pay 120 percent of scale and cover all of his buyout next year.*

*The scale amount, which increases annually, is determined by the year a player signs, not the year he’s drafted.

The difference for Capela would be $2,233,029 over four years if the third-year and fourth-year team options of his contract are exercised ($4,041,792 if signed this year vs. $6,274,822 if signed next year PLUS the amount of his buyout. Since buyouts typically fall or remain constant during the life of a contract, I figure Houston can fit the 2015-16 amount into its $625,000 allotment for international buyouts next season.

Both sides have leverage here, which makes this somewhat-minor dispute all the more compelling.