We are officially one month into the 2024-25 regular season, too small a sample size to make foregone conclusions but enough data to outline where the Houston Rockets, San Antonio Spurs and Memphis Grizzlies are headed in the near future.
Financially, all three franchises are relatively stable. The Rockets and Spurs are roughly $10 million and $21 million away from the luxury tax, respectively (the Grizzlies have nearly $2 million in breathing room.) The on-court product is also positive, with Houston and Memphis among the top 10 teams in net rating at the time of writing and San Antonio much more competitive than in recent years, a game under .500.
As with any campaign, salary cap-centric storylines are aplenty; the Rockets have young talent but the roster could get expensive sooner rather than later, the Grizzlies have dealt with injuries but have found success around the margins and the Spurs are banking on veteran placeholders to bridge its rebuild together.
Resident salary cap and collective bargaining agreement expert Danny LeRoux sat with The Athletic to discuss the Southwest Division and several cap-related topics.
The Rockets will have some financial decisions to make holding a team option on Fred VanVleet’s contract in 2025-26. (Stacy Revere/Getty Images)
Kelly Iko: The Rockets have won 11 out of their first 16 games and historically, teams that start a season like that find themselves in the playoffs at the end of the year. From a roster building/salary cap perspective, should this affect how they operate? Do you think Houston should try to address their overall lack of 3-point shooting (25th in makes per game) in the market, or is their cap sheet better left untouched? I reported earlier this week about the organization shutting down the Giannis Antetokounmpo rumors that have been flying around recently…
Danny LeRoux: The Rockets are in a good place — no urgency that will force a mistake but the assets and salary flexibility to strike if the opportunity presents itself. The pivotal questions organizationally are whether they have someone who can be the best player on a championship team, if not whether they can acquire that someone, and what part of the next decade or so they want to prioritize.
Taking the last part first, as a practical consideration even the most loaded rosters have a life cycle that combines player quality, age and potentially cost depending on the situation. This is a complicated conversation for Rockets’ management because many of their best players are 23 and younger but Fred VanVleet and Dillon Brooks are around their 30th birthdays. Brooks’ eventual replacement might already be on the roster and hopefully, Reed Sheppard can take big steps forward in the next few seasons but choosing when they want to push the pedal to the metal is never as easy as it seems for a talented young team.
If the brass decides they have a series of strong second- and third-best players on a high-level team, the question is how to potentially add that top piece. The ones who become available are almost always older since young talents are under team control for so long and carry downside risk — Antetokounmpo is still an awesome talent but we have already seen some defensive decline and the early 30s can be a perilous time for players who rely more on athleticism than shooting: there is a reason why Stephen Curry, Kevin Durant and LeBron James have defied the typical aging curve beyond taking great care of their bodies.
Another fascinating consideration is that as time passes, the young Rockets will move from bargain contracts to properly paid, which likely requires more draft assets in a potential star trade and more complicated salary matching. Big moves will still be doable with what they have but certain doors will be trickier to open.
Iko: Amen Thompson and Tari Eason have had a tremendous impact off the bench and are posting All-Defense-type numbers as a unit. Eason is extension-eligible this summer as is fellow draftee Jabari Smith Jr. — do you foresee a contract structure similar to what Alperen Şengün and/or Jalen Green signed? And do the offseason decisions with Fred VanVleet and his team option play any part in future negotiations?
LeRoux: It all fits together with the added variable of ownership’s willingness to spend in the near- and long-term. The good news for the Rockets is the salary cap should rise a full 10 percent per year for at least the next few seasons, which will buy them some wiggle room since within a contract a player’s salary cannot go up more than eight percent per year. Of course, extensions and new contracts can produce much larger jumps as they have for Şengün/Green and likely will for Smith/Eason.
If the luxury tax is a true constraint, and I would love to know your read on that Mr. Iko, expect Rafael Stone to have about $80 million to divvy up between VanVleet, Smith and Eason. That feels like enough but remember the 25 percent max for that 2026-27 season will be an eye-popping $42.5 million (and $51 million for the 30 percent max!) so major improvement from one or more of their young players would be a welcome development but also potentially make the finances more complicated.
Iko: One of the storylines heading into this season was how head coach Ime Udoka would handle his rotations and who would end up on the outside looking in. So far, Jae’Sean Tate has been relegated to garbage time minutes and Cam Whitmore, the No. 20 overall pick in last season’s draft, has spent some time in the G League. According to league and team sources, a few teams inquired about Tate’s availability last week, offering similar salary — but the Rockets would prefer to get back second-round picks. With Whitmore, I understand there will be regular stints with the Rio Grande Valley Vipers this year, with Houston monitoring his development outside of scoring.
If you’re the Rockets, would you entertain the idea of a Whitmore trade or is that unnecessary at this stage? And what does Tate’s value look like right now?
LeRoux: My philosophy is that front offices should listen to everyone but there is absolutely no rush to decide on Whitmore. Player development is not certain or linear so the reason to make a move is if the Rockets are confident Whitmore cannot be the talent they want or need him to be, get offered someone who makes more sense with their roster on whatever timeline they prioritize or feel they are so covered at his position/niche he will always be superfluous.
That third rationale concerns me because rotation-caliber wings are always in scarce supply and injuries often challenge even deep rotations at that spot, so trading quality depth could be short-sighted and hard to correct if doing so becomes necessary. As such, you see if another team goes over the top but otherwise keep Whitmore around for at least another year to see where things shake out for him and the team more broadly.
Is it time to break up the trio of Morant, Bane and Jackson in Memphis? (Justin Ford/Getty Images)
Iko: I saw a stat yesterday that highlighted the injury-plagued Grizzlies — veteran guard Marcus Smart has only appeared in 27 games in nearly 100 possible appearances for Memphis since his trade there. Vince Williams Jr., who made his season debut last week, is out again for at least another month. Ja Morant remains week to week and GG Jackson II is still recovering from a foot injury.
I look at players like Brandon Clarke and Luke Kennard (making around $21 million combined) and wonder if there’s a consolidation trade that gets them some ballhandling and shooting help. Or are they too banged up to make moves right now?
Leroux: The Williams news is disappointing considering how he stepped into a valuable role with last season’s Grizzlies and absolutely could have done the same with them at full strength this year but hopefully he will come back 100 percent before the end of 2024. I would urge Zach Kleiman and company to be conservative in terms of trades in the immediate and instead focus on what makes the most sense with a healthy version of the team because the hope is they can find that once we get closer to April. Despite their injuries, the Grizzlies are still top-10 in NetRtg and remarkably top-10 on both ends of the floor. That is a testament to the players and coaches alike, particularly since they have not benefitted from unreasonable clutch success (actually underperforming their differential in terms of wins) or too much from lucky opponent shooting.
If there is someone who meshes well with Morant, Bane, and Jackson or fits a valuable bench role they can and should consider that addition but consolidation trades are notoriously rare because they require a trade partner who values those multiple players highly and also does not need the superior player they are sending out. As discussed above with the Rockets, another key variable is ownership’s long-term willingness to spend because the Grizzlies are only about $34 million below the tax line for next season without anything for Kennard or pending restricted free agent Santi Aldama. I would love to see Memphis dip into the tax to build a stronger roster but that likely comes after postseason success rather than before, even if proactivity would be a welcome sight.
Iko: Jay Huff and Scottie Pippen Jr. are good examples of the Grizzlies’ ability to find diamonds in the rough, taking chances on players with two-way contracts and converting them into multi-year deals. In the age of the luxury tax, second apron and salary cap purgatory, are we entering into an era where teams not only find avenues to circumvent some of these financial issues, but also end up with rotation-worthy additions?
Leroux: Finding even rotation-level talent with two-way contracts is a massive competitive advantage and one that becomes necessary as a young roster gets more expensive. For example, think about how much better the Bucks would be if they had even one find like that! A continuing challenge there is that each team having three two-way spots means more possible breakout talent is already under team control so the Grizzlies’ success is even more impressive and likely harder to replicate as time goes by.
Something worth watching over the next few years is whether there ends up being similarities between the two-way players who most exceed expectations. After all, both Huff and Pippen have had other opportunities within the league so it is not like they were under the radar. One thought that interests me is whether smaller roles help maximize end-of-roster players because finding defenders or shooters on the fringes of the league is far easier than a dynamic ballhandler coming out of nowhere. That might end up being another benefit of star players, like how Nikola Jokić has allowed the Nuggets to maximize players at basically any position who are less dangerous with the ball in their hands.
Another two-way thread to watch is whether using those spots on super young players bears more fruit than rolling the dice on players like Huff and Pippen in both the short- and long-term. I am genuinely unsure how that will work out but it will be important for front offices, especially with all the additional apron and luxury tax considerations in the current CBA.
Iko: Memphis appears to be focused on making the Morant/Desmond Bane/Jaren Jackson Jr. trio work but that group has only played 40 games together in the last three years. Do you believe the Grizzlies’ big three brings success in the West, or is five years long enough and you’re taking calls on one or more of them?
Leroux: Availability is a concern for sure but I like that trio as talents and there are a lot of different players who make sense as complementary pieces when you have a dynamic creator, secondary creator who can shoot and floor-spacing rim protector. Only Morant is in the conversation for “not moving under any circumstances” but it would take a strong offer to move either Bane or Jackson, in part because replacing them would be difficult as well.
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Iko: Hearing how Chris Paul speaks about the youth on the San Antonio roster and his love for Victor Wembanyama — he’s currently taking French lessons — it sounds like he wants to stick around a little longer.
What are your thoughts? From a ballhandling/playmaking perspective, Stephon Castle already looks like he will be a valuable contributor, Tre Jones is still underrated (free agent this summer) and Jeremy Sochan looked reborn before his thumb injury. Are the Spurs still years away from making major salary cap decisions or is Wembanyama’s development speeding up their timeline?
LeRoux: It boils down to opportunity cost. Does retaining Paul prevent the Spurs from acquiring or developing the long-term creator Wembanyama needs? With a reasonable front office, that answer should be no. The Spurs should draft the best talent available and use their spending power for a combination of talent and asset acquisition.
Castle’s development will be fascinating to track as his athleticism and effort in transition have given the Spurs a nice boost but he needs a combination of a reliable pull-up jumper, better passing vision and better pick-and-roll operation to be the on-ball dynamo down the line. He has the tools to get there but I would love to see their front office have multiple irons in that fire. My favorite example here is the Cavs drafting Darius Garland the year after selecting Collin Sexton despite their confidence in him, then later bringing in Donovan Mitchell after Garland’s All-Star season. Offensive engines and defensive anchors are the single most important players to find and the Spurs already have one so they should throw resources at the other unless and until they are 100 percent sure they found their answer.
Iko: Finally, let’s discuss the Spurs’ rich stash of draft capital. Next summer alone, San Antonio has protected firsts from Chicago and Charlotte, an unprotected first from Atlanta in addition to their own.
What are the financial ramifications of adding even more young talent to the roster over the next few years? Is there a model to follow — like Houston’s — where staggering extensions makes sense?
Leroux: Having too many exciting young talents to pay is a fantastic problem to have that does not occur often because of all the factors that can sidetrack players like injuries or stalled development. If they can draft and develop enough high-level players that fitting them all in financially is an issue, they could swallow a luxury tax bill. A team that loaded is going to be a competitor or find new homes for some guys in exchange for draft picks or cost-controlled talent.
There are far, far more incidences of teams rushing a build around a young star by using draft picks to acquire older win-now players than overstuffed young teams that cannot pay to retain their players and that story won’t change any time soon.
(Top photo of Chris Paul: Ronald Cortes/Getty Images)
