Examining Rockets' Salary Cap, Decisions for 2025 NBA Free Agency after Warriors Loss

Although the Houston Rockets earned the No. 2 seed in the Western Conference, they've quickly exited the postseason.

Houston, which won 52 games during the regular season, fell to the Golden State Warriors in the first round following Sunday's Game 7 loss.

The offseason, nevertheless, has a few major questions.

In addition to having a strong majority of the rotation set to return, the Rockets will likely hold a top-10 selection in the 2025 NBA draft. However, might this disappointing exit lead the front office to explore a significant trade?

The future seems bright, yet there are questions to answer in Houston.

At first glance—depending on your preferred source—it may appear the Rockets have a chance to make a splash this offseason.

Houston has $141.5 million on the books for the 2025-26 campaign, and the projected salary cap is $154.6 million. In reality, though, the Rockets are on track to surpass this year's $171 million bill.

Big-money extensions for Jalen Green and Alperen Sengun—both north of $33 million—will kick in next season.

Short of a surprise, the Rockets will be above the $187.9 million luxury tax and flirting with the first ($195.9) and second aprons ($207.8 million).

The very notion of declining a team option for Fred VanVleet may seem absurd. Why risk letting him explore the open market?

For the Rockets' long-term outlook, it might be the wise decision.

The ideal scenario is re-signing VanVleet to a long-term contract at a rate below his $44.9 million option. B/R's Eric Pincus floated a three-year, $97.2 million idea—which, for example, trims approximately $15 million next season.

Houston otherwise has a $4.9 million option on reserve guard Aaron Holiday, and Jock Landale has zero guaranteed money in his $8 million. The team really could go either way on Holiday, and it's possible Landale's value is more of being a salary-matching chip in potential trade talks.

The final note, a potentially divisive one, must be mentioned.

Jalen Green is set to begin a three-year, $106 million extension, and Houston won't necessarily view him as untouchable. His upside is terrific at only 23 years old, but he's also been inefficient and just struggled mightily in the playoffs.

The major domino here is VanVleet's future.

Should he sign a team-friendly deal, the Rockets have flexibility with the mid-level exception. That should allow them to retain veteran center Steven Adams, the highest priority among Houston's own free agents.

From there, the conversation is a bit contingent on the draft lottery and how much the Rockets expect 2024 top pick Reed Sheppard to factor into the rotation.

Today, at least, more depth at point guard and center stand out as needs. Would a ball-handler like Spencer Dinwiddie entertain a low-dollar deal? How much money is center Clint Capela going to command?

Houston should also consider Alec Burks and Cameron Payne in the backcourt, along with Mason Plumlee down low.

If the Rockets keep him on a minimum-type deal, Jae'Sean Tate would provide serviceable depth on the end of the bench, too.

Those aren't big names, but Houston's more realistic path to a splashy addition this offseason—Kevin Durant, for example—is through a trade.