Kevin Porter Jr.’s worth to the Rockets entering the 2022-23 season — and beyond
What will the Houston Rockets ultimately do with Kevin Porter Jr.?
For the 22-year-old point guard, the past two seasons in Houston have been a mixed bag of ups, downs and potential. The franchise, in the middle of a rebuild, needs to cement its foundation, and by all accounts, Porter looks to be a part of that.
So what exactly does an extension look like? The Athletic’s Rockets beat writer Kelly Iko and salary-cap expert Danny Leroux discussed from a variety of angles.
(Editor’s note: Content has been edited for clarity and brevity.)
Kelly Iko: Thanks for hopping on with me, Danny.
Kevin Porter Jr. and the Rockets are in a bit of an interesting situation heading into training camp and the season. It’s no secret the organization loves him and his skill set. He was extracted out of a toxic situation in Cleveland, brought to Houston and asked to change positions (to point guard, nonetheless) — all in the middle of a rebuild.
Now it’s time to talk turkey. Porter is eligible for an extension, and according to our reporting at The Athletic, both sides have been communicating and want to get something done before the 2022-23 campaign starts.
My first question to you: Is that the best situation for all parties involved? What should be taken into consideration?
Danny Leroux: That really depends on what each side prioritizes. I like to think about extensions as mitigating risk; for the player, it locks in money a year early, and for Porter specifically, it would likely be a significant raise off his current wage. For the team, you give the player security in exchange for locking in a contract you are happy with for years to come and avoiding the possibility that you will have to pay a lot more if that player has a strong season.
There is a strong rationale for both sides to come to the table but no guarantee an agreement will happen or is even reasonably possible. After all, the Rockets could see the risk-mitigating middle ground as well below Porter’s salary expectations, and/or Porter could see a brighter future and only accept an extension at a big figure, giving the Rockets little incentive to sign him a year early.
Beyond that, the most important considerations are Porter’s established level of play so far, expectations for how he will perform in the future and the market for players like him both now and with the 2022-23 campaign. Aligning on those topics is often essential for having and finding a mutually acceptable fertile middle ground for an extension.
Iko: We recently saw Porter’s teammate Jae’Sean Tate sign a three-year, $22.1 million extension, but he wasn’t a first-round pick. Why is Porter’s qualifying offer similar to what Tate’s was ($4.9 million) and his cap hold $9.7 million? How did the league arrive at those figures? This is the “CBA for Dummies” section.
Leroux: It is extremely important to remember that the qualifying offer and the cap hold are two different numbers with different significance to the parties involved. The collective bargaining agreement sets all of these figures, and they are based on what year a player is drafted and the league’s salary-cap number in that season. The qualifying offer is what a team has to put on the table in order to have match rights on a player. As the 30th pick in 2019, the Rockets currently have to offer Porter a one-year, $4.8 million contract in order to possess the ability to match an offer sheet from another team in restricted free agency. (Note: The team could refuse to extend a qualifying offer, which makes the player in question an unrestricted free agent, but that is very unlikely in this case because Porter is too talented and accomplished for that.) However, there is a CBA wrinkle called the “starter criteria,” and if Porter starts 21 games or plays 2,000 minutes, that qualifying offer jumps to $8.5 million. The idea is that if Porter earns enough time to outperform his draft slot as the 30th pick, his team should have to make a stronger offer to retain match rights.
However, that qualifying offer amount going up does not affect Porter’s $9.7 million cap hold. Cap holds are a placeholder to estimate what a free agent may sign for, and that sticks whether a former first-round pick’s qualifying offer goes up or down based on how their first four years go. The only way to change that cap hold is if Porter and the Rockets agree on an extension between now and Oct. 31, because in that case, they do not need an estimate of what Porter will make; they will have the actual salary!
Iko: Let’s hit the negotiating table. Are there any other past contracts we can look at that might set precedent for how Porter’s talks will go? In two seasons as a Rocket, his overall production has been up and down, but he’s a talented, young player who just finished the season on a high note. His stock should be trending upward, and we’ve seen players get paid based on upside and future projections. Should that apply here as well?
Leroux: Porter will inevitably argue that he deserves starter money since he started almost every game he was available for in each of his two seasons with the Rockets. Beyond that, he is in his early twenties, and the expectation is that he will continue to improve, so Houston will be getting a key player for their future who is hard to find on the open market and borderline impossible at his age. That could lead to an ask for something along the lines of Anfernee Simons’ $25 million per year. However, Rafael Stone can easily counter that Simons had a better 2021-22 than any Porter season so far, and Simons signed his contract as a restricted free agent rather than a year earlier in an extension.
One interesting benchmark could be Kevin Huerter’s four-year, $65 million extension last fall. I would argue Huerter had a better first three seasons but was also in a more favorable offensive ecosystem and a year further away from the new TV money. Still, more than $15 million a year feels steep for Porter a year out, even if he could vastly outperform that by the time restricted free agency rolls around a year from now. If I were in Stone’s chair, something between $10 to $13 million a year would be totally acceptable, but Porter demanding more would require asking him to prove it this season while being willing to pay a higher price tag in 2023 if he earns it.
Iko: And what is the flip side? Let’s say something doesn’t materialize. What does restricted free agency for Porter look like?
Leroux: The good news for the Rockets is that there will not be a ton of other teams with spending power over the midlevel exception next summer. A lot can change between now and then, but right now, only seven franchises — including Houston — project to have usable space, a number that typically drops over the next 10 months due to extensions and new contracts.
Their problem is that most of those projected cap-space teams are young, and the free-agent crop looks pretty weak in terms of young difference-makers. Assuming RJ Barrett, Tyler Herro, De’Andre Hunter and Cam Johnson all stick with their current teams either by extension or match rights, Porter could be in a somewhat narrow group if a potential suitor thinks the Rockets might not have the stomach for a big deal. Could the Pistons, Thunder, Pacers or Magic see Porter as an intriguing talent who brings something different than their other young talent? Absolutely, and it only takes one or two interested teams to drive up the price.
Even so, the general rule of restricted free agency is teams need to fall in love to take the plunge since it ties up their cap space for so long, and that leads to some extreme results like Otto Porter Jr. getting a max offer sheet in 2017 while Collin Sexton and Marcus Smart languished despite obvious talent. My instinct is that Kevin Porter Jr. would draw serious interest but not a premium unless he takes a big step forward this season. Probably something like $8 million to $10 million as a reasonable worst case, and more like $20 million to $28 million as a best case.
Are the Rockets willing to roll those dice?
Iko: How much should the Rockets balance paying Porter now versus the vast amount of cap space they’re projected to have next summer? A small chunk of that has already been eaten up by Tate’s new deal. Does that have any rollover effect to Porter’s negotiations?
Leroux: To me, the bigger balancing act is assessing the potential extension versus what Porter could get in restricted free agency. In all honesty, the margin between a $9.7 million cap hold and whatever his first season would be in an extension is relatively immaterial to a franchise that could be wielding $65 million to $70 million in cap space. Losing $5 million or even $10 million off that is unlikely to make a difference in the moves Stone makes next summer even if the Rockets are major players that offseason.
Kevin Porter Jr.’s worth to the Rockets entering the 2022-23 season — and beyond
What will the Houston Rockets ultimately do with Kevin Porter Jr.?
For the 22-year-old point guard, the past two seasons in Houston have been a mixed bag of ups, downs and potential. The franchise, in the middle of a rebuild, needs to cement its foundation, and by all accounts, Porter looks to be a part of that.
So what exactly does an extension look like? The Athletic’s Rockets beat writer Kelly Iko and salary-cap expert Danny Leroux discussed from a variety of angles.
(Editor’s note: Content has been edited for clarity and brevity.)
Kelly Iko: Thanks for hopping on with me, Danny.
Kevin Porter Jr. and the Rockets are in a bit of an interesting situation heading into training camp and the season. It’s no secret the organization loves him and his skill set. He was extracted out of a toxic situation in Cleveland, brought to Houston and asked to change positions (to point guard, nonetheless) — all in the middle of a rebuild.
Now it’s time to talk turkey. Porter is eligible for an extension, and according to our reporting at The Athletic, both sides have been communicating and want to get something done before the 2022-23 campaign starts.
My first question to you: Is that the best situation for all parties involved? What should be taken into consideration?
Danny Leroux: That really depends on what each side prioritizes. I like to think about extensions as mitigating risk; for the player, it locks in money a year early, and for Porter specifically, it would likely be a significant raise off his current wage. For the team, you give the player security in exchange for locking in a contract you are happy with for years to come and avoiding the possibility that you will have to pay a lot more if that player has a strong season.
There is a strong rationale for both sides to come to the table but no guarantee an agreement will happen or is even reasonably possible. After all, the Rockets could see the risk-mitigating middle ground as well below Porter’s salary expectations, and/or Porter could see a brighter future and only accept an extension at a big figure, giving the Rockets little incentive to sign him a year early.
Beyond that, the most important considerations are Porter’s established level of play so far, expectations for how he will perform in the future and the market for players like him both now and with the 2022-23 campaign. Aligning on those topics is often essential for having and finding a mutually acceptable fertile middle ground for an extension.
Iko: We recently saw Porter’s teammate Jae’Sean Tate sign a three-year, $22.1 million extension, but he wasn’t a first-round pick. Why is Porter’s qualifying offer similar to what Tate’s was ($4.9 million) and his cap hold $9.7 million? How did the league arrive at those figures? This is the “CBA for Dummies” section.
Leroux: It is extremely important to remember that the qualifying offer and the cap hold are two different numbers with different significance to the parties involved. The collective bargaining agreement sets all of these figures, and they are based on what year a player is drafted and the league’s salary-cap number in that season. The qualifying offer is what a team has to put on the table in order to have match rights on a player. As the 30th pick in 2019, the Rockets currently have to offer Porter a one-year, $4.8 million contract in order to possess the ability to match an offer sheet from another team in restricted free agency. (Note: The team could refuse to extend a qualifying offer, which makes the player in question an unrestricted free agent, but that is very unlikely in this case because Porter is too talented and accomplished for that.) However, there is a CBA wrinkle called the “starter criteria,” and if Porter starts 21 games or plays 2,000 minutes, that qualifying offer jumps to $8.5 million. The idea is that if Porter earns enough time to outperform his draft slot as the 30th pick, his team should have to make a stronger offer to retain match rights.
However, that qualifying offer amount going up does not affect Porter’s $9.7 million cap hold. Cap holds are a placeholder to estimate what a free agent may sign for, and that sticks whether a former first-round pick’s qualifying offer goes up or down based on how their first four years go. The only way to change that cap hold is if Porter and the Rockets agree on an extension between now and Oct. 31, because in that case, they do not need an estimate of what Porter will make; they will have the actual salary!
Iko: Let’s hit the negotiating table. Are there any other past contracts we can look at that might set precedent for how Porter’s talks will go? In two seasons as a Rocket, his overall production has been up and down, but he’s a talented, young player who just finished the season on a high note. His stock should be trending upward, and we’ve seen players get paid based on upside and future projections. Should that apply here as well?
Leroux: Porter will inevitably argue that he deserves starter money since he started almost every game he was available for in each of his two seasons with the Rockets. Beyond that, he is in his early twenties, and the expectation is that he will continue to improve, so Houston will be getting a key player for their future who is hard to find on the open market and borderline impossible at his age. That could lead to an ask for something along the lines of Anfernee Simons’ $25 million per year. However, Rafael Stone can easily counter that Simons had a better 2021-22 than any Porter season so far, and Simons signed his contract as a restricted free agent rather than a year earlier in an extension.
One interesting benchmark could be Kevin Huerter’s four-year, $65 million extension last fall. I would argue Huerter had a better first three seasons but was also in a more favorable offensive ecosystem and a year further away from the new TV money. Still, more than $15 million a year feels steep for Porter a year out, even if he could vastly outperform that by the time restricted free agency rolls around a year from now. If I were in Stone’s chair, something between $10 to $13 million a year would be totally acceptable, but Porter demanding more would require asking him to prove it this season while being willing to pay a higher price tag in 2023 if he earns it.
Iko: And what is the flip side? Let’s say something doesn’t materialize. What does restricted free agency for Porter look like?
Leroux: The good news for the Rockets is that there will not be a ton of other teams with spending power over the midlevel exception next summer. A lot can change between now and then, but right now, only seven franchises — including Houston — project to have usable space, a number that typically drops over the next 10 months due to extensions and new contracts.
Their problem is that most of those projected cap-space teams are young, and the free-agent crop looks pretty weak in terms of young difference-makers. Assuming RJ Barrett, Tyler Herro, De’Andre Hunter and Cam Johnson all stick with their current teams either by extension or match rights, Porter could be in a somewhat narrow group if a potential suitor thinks the Rockets might not have the stomach for a big deal. Could the Pistons, Thunder, Pacers or Magic see Porter as an intriguing talent who brings something different than their other young talent? Absolutely, and it only takes one or two interested teams to drive up the price.
Even so, the general rule of restricted free agency is teams need to fall in love to take the plunge since it ties up their cap space for so long, and that leads to some extreme results like Otto Porter Jr. getting a max offer sheet in 2017 while Collin Sexton and Marcus Smart languished despite obvious talent. My instinct is that Kevin Porter Jr. would draw serious interest but not a premium unless he takes a big step forward this season. Probably something like $8 million to $10 million as a reasonable worst case, and more like $20 million to $28 million as a best case.
Are the Rockets willing to roll those dice?
Iko: How much should the Rockets balance paying Porter now versus the vast amount of cap space they’re projected to have next summer? A small chunk of that has already been eaten up by Tate’s new deal. Does that have any rollover effect to Porter’s negotiations?
Leroux: To me, the bigger balancing act is assessing the potential extension versus what Porter could get in restricted free agency. In all honesty, the margin between a $9.7 million cap hold and whatever his first season would be in an extension is relatively immaterial to a franchise that could be wielding $65 million to $70 million in cap space. Losing $5 million or even $10 million off that is unlikely to make a difference in the moves Stone makes next summer even if the Rockets are major players that offseason.
