On the eve of free agency, the Rockets have declined team options on the contracts of Chandler Parsons and Troy Daniels, making each of the duo free agents. The news on Parsons comes as little surprise as it had been reported for weeks, but the decision with Troy Daniels was not expected.
With this move and the likely corresponding qualifying offer to come, Chandler Parsons becomes a restricted free agent, allowing him to negotiate with other teams but ultimately leaving his fate in the Rockets' hands as they can match any contract offer he receives. He will have a tiny cap hold before he signs an offer sheet, but an interesting wrinkle is that the second he signs an offer that the Rockets must match or decline, his cap hit jumps to the amount of the first year of the offer, eating up the valuable cap space the Rockets have built to sign a big free agent.
With that in mind, the Rockets have likely discussed their plans with Parsons and let him know that they will make him whole if he just waits a few days and allows them to conduct their business first. The only way the Rockets end up regretting this is if Parsons wants to force a move elsewhere and signs a big offer sheet before the Rockets sign any players.
On Daniels, this news is a bit of a surprise, but it saves the team over $300,000 in cap space to offer a free agent. Over the course of a four year deal, that makes about a $1.4 million difference in what they can offer LeBron James or Carmelo Anthony. It likely will make no difference, but Daniels may not be a big enough player to risk using that space on.
The Rockets can offer Daniels the same amount after free agency starts while preserving their cap space in the meantime, so if he's willing to come back, he won't lose any money. Despite his promising run in the playoffs, it's unlikely he'll get a long term deal as he has simply so small a track record.