One day after surprisingly declining his $1.8 million option for next season, the Houston Rockets reportedly re-signed Jae’Sean Tate to a contract worth up to $22.1 million over three years. The 26-year-old’s new deal could run through the 2024-25 season, though with the final year being a team option, 2023-24 is the last fully guaranteed season.
In effect, third-year Rockets general manager Rafael Stone came to the conclusion that the marketplace for Tate in 2022 was friendlier to the team than what it likely would have been in the 2023 offseason.
In 2022, due to the Arenas rule, Tate was unable to receive any outside offer for greater than the non-taxpayer mid-level exception, which starts at a salary of $10.5 million annually. In addition, fewer teams around the league have cap space in 2022 relative to current projections for 2023, which decreased Tate’s potential leverage.
Yet, the 2022 contract also has advantages for Tate. He gets a sizable raise for next season compared to his initial contract, and doing the deal early mitigates any risks related to injury or poor performance.
HOUSTON,I LOVE YOU!🤘🏿🤘🏿🚀🚀
— JaeSean Tate (@o_tate_) June 30, 2022
Tate was set to make $1.8M this season, but team option was declined and he now locks in more salary. https://t.co/QnjuVUObuR
— Shams Charania (@ShamsCharania) June 30, 2022
The move will slightly cut into Houston’s potential salary cap space in 2023, since Tate was originally projected to have a very low cap hold, had the final-year team option on his original contract been picked up. However, the Rockets are clearly willing to accept that tradeoff in exchange for a friendlier annual value over the full length of the contract.
It’s also worth noting that Tate’s annual salary will decline slightly from the first season ($7.0 million) of the new contract to the second season ($6.5 million), per Kelly Iko of The Athletic. That may further help Stone and the Rockets when it comes to financial flexibility in 2023.
Tate’s three-year deal includes a team option in Year 3, per sources. Also has bonus triggers tied to games won.
Year 1: $7 million
Year 2: $6.5 million https://t.co/zoCB4fzVrU
— Kelly Iko (@KellyIkoNBA) July 1, 2022
The contract also has salary bonus triggers that are tied to games won, according to Iko, who did not specify the win thresholds.
Tate, who made the All-Rookie first team in 2020-21, has averaged 11.6 points (50.1% FG, 31.0% on 3-pointers), 5.4 rebounds and 2.7 assists in 27.7 minutes per game over two seasons in Houston. The 6-foot-4 forward is one of the most valuable defensive players on the Rockets and a respected team leader, even at this early stage of his NBA career.
Odds are, Jae’Sean Tate could’ve gotten more than 2 years, $20M in next summer’s free agent market.
Hence, good move by the Rockets.
— David Weiner (@BimaThug) June 30, 2022