It’s no secret that the Houston Rockets have been severely shorthanded for much of the last two months. With Chris Paul going down with a hamstring injury, Eric Gordon missing some time with a deep knee contusion, and Clint Capela out 4-6 weeks with a right thumb injury, the Rockets have had to rely on younger players on the roster. One of those players, Danuel House, had catapulted himself into the starting lineup after being signed to a two-way contract back in December.

House helped solidify the Rockets at small forward with some quality size (6-7) and shooting (39 percent from three-point range this season). More importantly, he gave Houston a healthy body at a time in which it so desperately needed it.

House had bounced around the league for a few years and it looked like he had finally found a home in Houston. Head coach Mike D’Antoni provided House with the confidence to freely shoot the three-ball without being scrutinized, and James Harden found him for quality looks time and time again. It felt pretty certain that the two parties would come to the table and hammer out a deal quickly as the incentive was there.

However, as soon as House’s NBA service days were over (Jan. 15), it forced both sides to negotiate a deal, otherwise House would have to go back to the G League to play for the Rio Grande Valley Vipers until the end of the season or until a deal to return to the Rockets is finalized. When it came to that point, Houston essentially had a few options:

Finalize a multi-year deal with House Convert House to a normal NBA contract for the rest of the season and allow him to enter restricted free agency Do nothing and have House serve out his two-way deal in the G League and then become a restricted free agent.

Option 1: Finalize a multi-year deal with House

This is obviously the preferred path for Houston, however it’s tricky. The Rockets are an above-the-cap team, limiting the kind of contracts they can offer House. Houston has $3.3 million left on its taxpayer mid-level exception that it can use on House, but it makes sense that the team would prefer not to dig into it too much. The reason for this is that having a large lump-sum of cash to spend on players would be a market advantage for the Rockets on the buyout market.

In an ideal world for Houston, House agrees to a two-year, minimum deal. This allows the Rockets to retain him for an extra year while not having to dip into their taxpayer MLE. However, it’s unlikely House and his representatives ever agree to such a deal, as avoiding free agency just for one extra year of security doesn’t make much sense. Another team-friendly option would be a three-year deal, non-guaranteed, which is reportedly what House turned down.

This is why signing House to a three-year, minimum salary deal made a lot of sense for both parties; House gets three years of financial security and the Rockets secure his rights long-term for a team-friendly price. This is precisely the deal House and his agent, Raymond Brothers, turned down.

Raymond Brothers, agent for #Rockets forward @DanuelHouseJr in a text message: "Rockets initially offered Danuel a 3-year league minimum non guaranteed deal. Last offer was a 3-year league minimum guaranteed deal. Both rejected." — Mark Berman (@MarkBermanFox26) January 16, 2019

Option 2: Convert House to a normal NBA contract for the rest of the season

This is a likely last-case scenario for the Rockets. In this case, House becomes a restricted free agent at the end of the season with another two-way contract from Houston becoming the qualifying offer. While he’s restricted, the Rockets won’t have the full means to match (Bird Rights) any offer he receives. They will be limited to their taxpayer mid-level exception ($5.4 million last year) to match. It’s also exactly what House and his agent want.

It seems House wants to enter restricted free agency and take his chances gambling on himself, which is totally within his rights. It’s worth noting that neither the Rockets nor House are in the wrong during this stalemate. House wants the ability to enter the market after this season and the Rockets want the best team-friendly deal possible–both reasonable desires.

Option 3: Do nothing and have House serve out his two-way deal in the G-League

This is the least likely scenario on the table. If the Rockets choose to go this route, House would be required to return to the team in March, but he would not be playoff eligible. He would also enter restricted free agency anyway, so the incentive to leave him in the G-league all season rather than converting him really isn’t there (unless Houston wants to reserve a roster spot).

It’s tough to tell how long this stalemate will last, but it will ultimately depend on who blinks first. Either House’s camp caves and takes the three year deal on the table or the Rockets cave and convert House for the rest of the season and allow him to test the waters this summer. It’ll be fascinating to keep an eye on going forward.