Chandler Parsons' Contract Looms over Critical Houston Rockets Offseason

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Chandler Parsons' Contract Looms over Critical Houston Rockets Offseason
USA TODAY Sports

This offseason, the Houston Rockets will be faced with a decision on Chandler Parsons' contract that is much more complicated than it appears to be on the surface. What happens with Parsons before the offseason truly begins could completely alter the course of the franchise. 

Because Parsons was a second-round pick and was signed to an incredibly cheap deal by general manager Daryl Morey, the Rockets could easily keep raking in the value of paying well below market price for his services.

While Parsons certainly expected to have NBA success, Morey was wise to lock him up long term and give him some financial security that second-round picks can't take for granted.

Here's what Parsons told Jonathan Feigen of the Houston Chronicle earlier this year about signing that deal:

My contract is four years," Parsons said. "I love being in Houston. I love playing with the Rockets. I think we have a chance to be really good. I don't worry about that. That's why I hired Dan Fegan. I think he's the best in the game. I know he'll do what he thinks is best for my career.

"It (the contract) doesn't bother me. I chose my contract. Although I was confident in myself after my college career, I was still drafted in the second round. Rather than a one-year deal, I picked a four-year deal. It's a little frustrating seeing all these guys, but what I'm making right now is still a lot of money to me.

Of course, now Parsons is faced with the very real possibility of once again making less than $1 million a year because of that. If Houston were to accept the team option on his deal for the 2014-15 season, Parsons would make only $964,750 for his trouble.

That, obviously, is well below what Parsons would make on the open market and well below what he's worth. 

But while you might think Houston would be crazy to pass up a player like Parsons at that price for next year, there is certainly some incentive to do so.

If Houston declined the team option on Parsons, he'll become a restricted free agent. That means Houston will be able to match any offer Parsons receives in free agency. Basically, the Rockets would be guaranteed the ability to retain Parsons long term, so long as they are willing to pay the same price any other team is.

Therein lies the problem, though, with the strategy of letting Parsons hit restricted free agency this offseason instead of unrestricted free agency next year.

If a team that misses out on Carmelo Anthony or any of the other big-time forwards gets desperate, perhaps it'll throw a big deal worth $11 or $12 million per year at Parsons to test Houston. At that point, the Rockets would be all but locked in financially to this current core if they were to match.

That's not the worst thing, of course, but it certainly limits the ability to add a third star if Parsons would be getting paid like one. 

Scott Halleran/Getty Images

There are issues with the alternative plan of accepting the team option and letting next year play out as well, however. If Parsons and his agent Dan Fegan try to force Morey's hand this offseason, and Morey balks, perhaps there will be more incentive for Parsons to leave outright as an unrestricted free agent in 2015, when money should be flying around everywhere.

It's hard to say which way Houston is leaning, but after a disappointing first-round exit, Morey may be looking to find another star however he can. If he were to make Parsons a restricted free agent this year, that would certainly seem to limit some of his financial flexibility, particularly if he can find a taker for Jeremy Lin's or Omer Asik's expiring deal.

Here's what Morey told Feigen of the Houston Chronicle in a recent Q&A:

Q: How do you make a decision on picking up the option on Chandler Parsons' contract when you don't know what will happen in free agency two weeks after your deadline to make a decision?

A: 'We won't know everything we need to know when we have to make a decision on Chandler's (contract) option. We have to make the best decision at the time we have to make it (June 29).'

Q: That sounds as if you haven't made that decision yet.

A: 'No, that's something we still have to talk through.'

If the Rockets want to make a play for another star, whether it's this offseason or sometime during next year, keeping Parsons as cheap as possible would certainly seem to make sense.

Bill Baptist/Getty Images

Although it does run the risk of alienating Parsons and his agent, now probably isn't the time for Morey to play things safe. There's a pretty small window to add another star and keep Parsons on the team as well, and closing that sooner than it needs to be closed probably isn't the wisest decision.

Here's Tom Ziller at SB Nation with his take:

If the decision bugs Parsons or his agent Dan Fegan, then Parsons can have an epic 2014-15 and walk out to $40 million plus from someone else in 2015. The Rockets will likely be able to survive the loss.

In the meantime, keeping Parsons cheap in 2014-15 allows Morey to potentially add a piece (depending on what he wants to or can do with Asik and Lin) in his quest to get Howard, Harden and Kevin McHale a championship. Paying Parsons earlier to remove the risk of losing him doesn't help get the Rockets any further in 2014-15. Houston needs to swing for the fences early and often, and playing risk management with Parsons' contract isn't worth it.

Houston has a great opportunity to build something special around James Harden and Dwight Howard, and Parsons can certainly play a role in that. But can he fill the role of a third option on a title team? Although his continued improvement bodes well, that's not a question that can be firmly answered either way right now.

This is more about opportunity than it is about Parsons. The Rockets have a legitimate chance, whether it be through trade or the clearing of cap space, to form the NBA's next Big Three and dominate the league going forward. The reward here greatly outweighs the risk.

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