Rockets decline Jae’Sean Tate’s player option; new contract in works

In an unexpected turn of events, the Rockets declined the final-year option on the initial NBA contract of Jae’Sean Tate, per Wednesday’s report by Shams Charania of The Athletic. As of late last week, the plan was to pick it up, per Jonathan Feigen of the Houston Chronicle.

The move will make Tate a restricted free agent. However, according to Charania, both Tate and the Rockets have interest in discussing a new contract once free agency opens on Thursday night.

The move could cut into Houston’s potential salary cap space in 2023, since Tate was projected to have a very low cap hold. However, the potential upside is that by allowing Tate to get his pay raise a year earlier and making him a restricted free agent — rather than unrestricted, as he would be in 2023 — that could lead to friendlier overall terms for the Rockets relative to what Tate might have secured in a year from now.

That restricted status also allows the Rockets to match any outside offer, though it sounds as if both sides plan to work quickly on a new deal that would prevent him from staying on the market for long.

Due to the Gilbert Arenas provision in the NBA’s collective bargaining deal, Tate cannot receive a starting salary higher than the non-taxpayer mid-level exception (NT-MLE), which starts at roughly $10.5 million this offseason. Thus, his new deal certainly won’t break the bank from a cap perspective, and it’s possible that he could have received more in 2023.

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 26-year-old 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.

The Houston Rockets have declined forward Jae’Sean Tate’s $1.8 million team option for next season, making him a restricted free agent, sources tell @TheAthletic @Stadium. Rockets and Tate have mutual interest in discussing new deal in free agency beginning Thursday night.

— Shams Charania (@ShamsCharania) June 29, 2022