Poison Pill: The Impact of Recent Extensions on the Rockets’ Trade Options
Just before the start of the regular season, the Houston Rockets signed Jalen Green to a three-year, $105.3 million extension and Alperen Sengun to a five-year, $185 million extension, locking up two key pieces of their rebuild. These extensions eliminated any meaningful salary cap room for Houston in the summer of 2025. However, since the NBA is trending away from key players changing teams via free agency (recent examples such as Paul George and the Rockets’ own Fred VanVleet notwithstanding), Rafael Stone and his team likely viewed the extensions as worth the risk.
The Rockets have positioned themselves as one of the league’s most interesting trade teams, as they boast a unique combination of good young players, premium future draft picks, and expiring salaries. But signing Green and Sengun to those extensions made trading each of those players this season significantly more difficult.
Article VII, Section 8(g) of the 2023 NBA Collective Bargaining Agreement – you know the one! – is more commonly known as the Poison Pill Provision, which relates to the trade treatment of players recently signed to rookie scale extensions. If a recently extended player is traded prior to the July 1 in which the extension kicks in, then while the player’s outgoing salary would be the same as his then current cap figure, the player’s incoming salary to the acquiring team would instead be the *average* of the player’s then current salary and all salaries during the extension. This makes any trade made under the Poison Pill Provisions exceedingly difficult.
Using Green and Sengun as examples, their respective outgoing and incoming salaries would be:
Jalen Green
Outgoing Salary for Houston: $12.5 million
Incoming Salary for Acquiring Team: $29.5 million
Alperen Sengun
Outgoing Salary for Houston: $5.4 million
Incoming Salary for Acquiring Team: $31.7 million
These vast discrepancies in outgoing and incoming salary treatment make Green and Sengun very difficult to trade, as most NBA trades must fall within salary-matching rules. While there are possible trade scenarios involving numerous players and salaries that could allow for Green or Sengun to be traded, most of those scenarios are unrealistic and/or would involve three or more teams and the expenditure of additional assets to get those additional teams to take on salaries.
The Rockets don’t seem to have much desire to move either Green or Sengun right now. However, if they do decide to move either of them, it would most likely not be until next July, when the Poison Pill Provision is no longer applicable and those players can be traded at their new extension salaries.
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