Alperen Sengun, Jalen Green Extensions Hint At Rockets’ Next Steps

The Houston Rockets stood at a fascinating crossroads heading into Monday's deadline to sign fourth-year players to rookie-scale contract extensions.

Had they waited to extend Alperen Sengun and Jalen Green, they could have created upward of $40 million in cap space next offseason. Doing so would have required them to decline their $44.9 million team option on Fred VanVleet and renounce their rights to him, but they could have been one of the few teams with significant cap space to spend in free agency.

Instead, the Rockets signed Green to a three-year, $106 million extension and Sengun to a five-year, $185 million extension, according to ESPN's Shams Charania. In doing so, they sacrificed future financial flexibility to lock up two of their cornerstone players for the next few seasons.

Those extensions also hint at how the Rockets plan to continue adding talent around their young core.

According to ESPN's Bobby Marks, Green's extension has a starting salary of $33.3 million in 2025-26 before jumping to $36 million in both 2026-27 and 2027-28. Sengun's extension is estimated to begin at roughly $31.9 million before increasing 8% annually from there. With those two contracts on their books, the Rockets will be over the projected $154.6 million salary cap next offseason if they pick up their team option on VanVleet.

If the Rockets hoped to make a major free-agent splash next summer, they could have followed the blueprint that the Philadelphia 76ers laid out with Tyrese Maxey over the past year. The Sixers chose not to extend him during the 2023 offseason "to preserve flexibility," according to ESPN's Ramona Shelburne. Having his $13.0 million free-agent cap hold on their books gave them enough cap space to sign Paul George this past offseason.

Like Maxey, Sengun was set to have a well-below-market cap hold of only $16.3 million. Had the Rockets not extended him before Monday's deadline, they could have that cap hold on their books next summer, spent the remainder of their cap space and then re-signed him via Bird rights once they were over the cap. Instead, the starting salary of his new extension will be on their books right away once the 2025-26 league year begins.

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In essence, the Rockets sacrificed the flexibility that the Sixers prioritized with Maxey by signing Sengun to his extension. However, they also signed him to a deal that's worth nearly $40 million less than what he could have received next summer ($224.2 million over five years).

Why did the Sixers and Rockets take such divergent paths when facing a similar scenario? Team context played a huge role.

Once James Harden decided to force his way out of Philadelphia last year, Sixers president Daryl Morey went all-in on the 2024 offseason. He flipped Harden for the expiring contracts of Marcus Morris, Nicolas Batum, Robert Covington and KJ Martin, which ensured that star center Joel Embiid would be the only Sixers player on a guaranteed contract beyond 2023-24.

The Sixers entered this past offseason with more than $60 million in cap space, which enabled them to sign George, Caleb Martin and Andre Drummond in free agency. They proceeded to sign Maxey to a full five-year, $203.9 million max extension, re-signed Kelly Oubre Jr. via the room mid-level exception and added Eric Gordon, Guerschon Yabusele and Reggie Jackson on veteran-minimum deals. (Morey has since conceded that his cap-space plan was a risky gambit.)

Even if the Rockets had waited to sign Green and Sengun to extensions, they wouldn't have been as financially flexible as the Sixers were this offseason. If they picked up their team options on Jabari Smith Jr. ($12.4 million), Amen Thompson ($9.7 million), Tari Eason ($5.7 million) and Cam Whitmore ($3.6 million) for the 2025-26 season, the Rockets would already have nearly $63 million in salary on their books. That's before counting their team option on VanVleet and the cap holds for Green ($31.2 million) and Sengun.

If the Rockets declined their team option on VanVleet, they could have entered next offseason with around $40 million of cap space at most. That's well below the starting salary of a max contract for a player with 7-9 years of NBA experience ($46.4 million) or 10-plus years of experience ($54.1 million). They would have needed to either shed salary or negotiate a sign-and-trade to land a player of that caliber in free agency. And again, that would also require them to lose VanVleet for nothing.

With Sengun and Green's extensions on their books, the Rockets now can't even carve out $25 million in cap space next offseason. They're far more likely to operate as an over-the-cap team, either by picking up VanVleet's team option (perhaps as part of a longer-term extension?) or declining it and signing him to a new deal.

The Rockets' primary focus next offseason figures to be staying under the first apron, which is currently projected to land at $195.9 million. Doing so would give them more flexibility on the trade market, particularly when it comes to salary-matching. Teams over either apron can't take back more salary than they send out in a deal, while teams below the first apron can receive up to 125% of the salary they send out, plus $250,000.

The Rockets also need to remain focused on their long-term budgetary outlook. Smith and Eason will become eligible for extensions next summer, while Thompson will follow suit in July 2026. Houston might have eschewed a big free-agent swing with those future commitments in mind, particularly given how punishing the NBA's new collective bargaining agreement is for teams with expensive payrolls.

If the Rockets do hope to eventually land a star from another team, expect it to come via trade, not free agency. The Sengun and Green extensions closed the latter path.