The Houston Rockets are effectively out of the LeBron James sweepstakes

LeBron James’ decision to decline his player option all but eliminated the Houston Rockets from contention for his services this summer.

Barring a miracle, LeBron James will not be joining the Houston Rockets in 2018-19.

On Friday, James decided to decline his $35.6 million player option to become an unrestricted free agent, according to Shams Charania of Yahoo Sports. That all but eliminated the Rockets’ chances of acquiring him, as an opt-in-and-trade was by far their most realistic pathway.

Houston already has $77.6 million in guaranteed salary on its books for next season, and Chris Paul, Clint Capela and Trevor Ariza (among others) are all about to become free agents. Even if the Rockets miraculously salary-dumped the rest of their roster without taking any salary back in exchange — note: this is about as likely as Michael Carter-Williams supplanting Michael Jordan as the GOAT — they still wouldn’t have the requisite cap space they needed to sign James while retaining Paul and Capela, much less Ariza. Signing James outright was never a realistic option for Houston.

While a sign-and-trade for James is still technically possible, it’s also highly unlikely. When a team receives a player in a sign-and-trade, it becomes subjected to the hard cap, which means it cannot exceed the luxury-tax apron at any point for the rest of the year. With the apron expected to come in somewhere slightly north of $129 million, it would be damn near impossible for Houston to acquire James that way while still retaining Paul and Capela, as ESPN.com’s Bobby Marks noted.

If the Rockets sent out an equivalent amount of salary while acquiring James, they’d have roughly $51.5 million remaining to spend on Paul, Capela, Ariza and/or to fill out the rest of their roster. Since the Cleveland Cavaliers would have no incentive to take back the two years and $41.7 million remaining on Ryan Anderson’s contract, Houston would likely have to involve a third party to escape from that onerous deal and free up more cap space.

The Rockets would have to send out at least $28.2 million to sign-and-trade James to a max deal, and a package including Eric Gordon, PJ Tucker and some spare parts would add up to $29.4 million, as ESPN.com’s Kevin Pelton suggested. However, that would leave Houston with even less money to fill out the rest of its roster, which all but certainly means Capela would be a goner.

Had James opted in, the Rockets could have pursed an opt-in-and-trade, much as they did with Paul last summer. Teams that acquire players via that route aren’t subjected to the hard cap, so Houston could have swung the same deal for James involving Gordon and Tucker, and it still would have been able to blow past the apron to re-sign Paul, Capela and Ariza. Rockets owner Tilman Fertitta would have been saddled with an enormous luxury-tax bill in that scenario, but he’s signaled his willingness to pay out the ears for a championship-caliber roster.

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Considering the Rockets were one half away from the Finals — twice! — adding James to a roster already starring Harden, Paul and Capela likely would have gotten Fertitta’s blessing.

Alas, James’ decision to test free agency deflated that dream for Houston before it ever got liftoff. Instead, general manager Daryl Morey can now turn his attention toward re-signing Paul (will he get the full five-year max?), Capela (given how few teams need centers and/or have cap space, will Houston lowball him?) and Ariza (is he really seeking $50-60 million?).

While James all but certainly won’t be suiting up for the Rockets this fall, running back a 65-win team is one hell of a consolation prize for Fertitta, Morey and Houston fans.

Unless otherwise noted, all stats via NBA.com or Basketball Reference. All salary information via Basketball Insiders.

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