NBA rules on Houston Rockets’ contract for Nene, lowers his trade value

Houston Rockets Nene Hilario (Photo by Hannah Foslien/Getty Images)
Houston Rockets Nene Hilario (Photo by Hannah Foslien/Getty Images) /

The NBA has made a ruling on the clever contract the Houston Rockets structured for Nene that will greatly reduce the trade value for the veteran center.

Houston Rockets GM Daryl Morey structured what was believed to be a brilliant contract deal with Nenê last Wednesday. In the deal, Nene would essentially be playing for the guaranteed vet-minimum, however, would have several incentive-based bonuses that increased his salary to $10 million. What this meant at the time was that in a trade, the full value of Nenê’s contract would be worth $10 million in incoming and outgoing salary. The structure of the deal as it stands was key for pursuing a player such as Andre Iguodala.

Thursday afternoon, however, the NBA burst the Rockets’ bubble when they made a ruling on the validity of Nenê’s new contract. In a move reminiscent of the infamous “basketball reasons” vetoed deal that would have sent Chris Paul to the Lakers in 2011, the NBA and Players Association made a decision that will undoubtedly hurt the Rockets, as Shams Charania broke down:

Rockets are no longer able to use Nene’s full $10M salary as trade chip, per league and union agreement. Houston signed Nene, discussed similar proposal for Iman Shumpert, potentially to move for someone like Andre Iguodala. Nene still has opportunity to earn $7.4M in bonuses.

— Shams Charania (@ShamsCharania) September 19, 2019

With the ruling, Nenê could still theoretically make up to $10 million this season if he meets certain conditions; although this isn’t likely since he will probably not get enough minutes to fulfill them. But as Shams explains, the contract for the Brazilan center will only be valued at the base $2.6 million guaranteed amount in a trade.

While Morey’s innovative contract structure did appear to take advantage of some loopholes, there is definitely going to be some controversy regarding the NBA’s seemingly impromptu ruling based on rules that don’t exist. The fact that part of the contract was accepted while another part was not, does seem to be a sketchy decision.

Over the next few days, expect to see some interesting commentary from the team and fans alike regarding this seemingly arbitrary ruling. CBS writer Samuel Quinn tweeted what many Rockets fans are probably thinking to themselves, making some valid points:

I have no idea how this isn't selective enforcement of the rules. Teams have been cheating the cap with unlikely incentives for years. The Nets+Lakers did this offseason. But suddenly one team (with a history of complaining) exploits the other side of the coin and gets rejected?

— Samuel H. Quinn (@SamQuinnCBS) September 19, 2019

There have definitely been some iffy decisions by the league in recent years, and the Houston Rockets, unfortunately, are the ones taking the hit this time around.

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We’ll have more details regarding possible appeals, comments, and implications of the NBA’s decision for the Houston Rockets as the news breaks.