The Houston Rockets have decided not to match the near-max offer sheet given to Chandler Parsons by the Dallas Mavericks, as confirmed by Parsons' own Twitter account. So continues a rather disastrous turn for Houston's offseason, in which the joint prospect of adding Chris Bosh on a four-year deal and bringing back Parsons on a three-year contract has somehow yielded neither player. That's a huge, gut-wrenching swing for a franchise that was on the brink of first-tier contention, especially given that it was by Houston's elective that Parsons became a free agent in the first place.
Parsons had a team option for the 2014-15 season worth just under a million dollars, a tremendous value for a player of Parsons' age and production. Yet rather than exercise that option to keep Parsons on the cheap, Houston declined it to accelerate the young forward's free agency. In doing so the Rockets made Parsons a restricted free agent rather than an unrestricted one, a move that, in theory, was thought to protect Houston against just this outcome. No matter how lucrative an offer Parsons received, his restricted status gave the team final say over whether he would stay or go. Had the Rockets picked up Parsons' team option and delayed his free agency until next summer, Parsons would instead have been able to pick his future employer in 2015 from all those teams with interest and cap room to spare.
As it turns out, the Rockets will somehow get neither a reinvestment from Parsons on a long-term deal nor another season of his services on one of the most cost-effective contracts in the league. Dallas succeeded in building an offer that made Houston balk: Near the maximum allowed in terms of dollar amount, complicated by a third-year player option and layered with a 15-percent trade kicker. These are not totally unreasonable terms for Parsons, and there is reported indication (via ESPN.com) that the Rockets would have matched the offer had they succeeded in landing Bosh. When that possibility fell through, however, Houston ultimately passed on retaining Parsons on the grounds that his offer sheet was too costly.
If we examine that decision solely from a financial perspective, the Rockets could have made the same four-year, $32 million deal with Trevor Ariza they hashed out on Saturday and matched the offer to Parsons while fielding a very good team below the luxury tax line. In that scenario, Parsons could remain a Rocket as long as the team saw fit; his new deal (worth $14.7 million in its first season) is not so rich as to negate Parsons' trade value, meaning that Houston could still escape from under the heft of his contract while scoring actual assets in return. Instead, the Rockets – after a last-ditch effort to extract some chip from the Mavs via sign-and-trade – will get nothing in return for one of the team's most instrumental players.
To decline Parsons' team option in the first place was odd, so much so that the two parties were widely believed to have a mutual understanding as to how Parsons' free agency would unfold. That clearly was not the case. Houston's subsequent choice to let Parsons go, though, is where things veer into truly puzzling territory. If Houston wasn't prepared to match an offer like this one, what was the value in allowing him to become a free agent in the first place? This was a heinous miscalculation on Morey's part, as a dream scenario dissolved to leave the Rockets markedly worse off than they had been previously. Houston isn't finished, as various exceptions can still be used or cap space created. Still, the Rockets have thus far replaced the impossibly affordable deal of Parsons with a multi-year gamble on a career-year Trevor Ariza. That's an exchange that should leave any executive queasy, yet for its acceptance of that premise Houston has none to blame but itself.