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Report: Rockets agreed to pay Daryl Morey, Tad Brown even after departures

Former Rockets CEO Tad Brown and Rockets owner Tilman Fertitta

LOS ANGELES, CA - FEBRUARY 06: Tad Brown (L), Chief Executive Officer of the Houston Rockets, and Tilman Fertitta, owner of the Houston Rockets and chairman, Chief Executive Officer and sole owner of Landry’s, Inc., one of the largest restaurant corporations, celebrate the Rockets win over Los Angeles Lakers at Staples Center on February 6, 2020 in Los Angeles, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this Photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Kevork Djansezian/Getty Images)

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Daryl Morey left the Rockets for the 76ers. Now, Tad Brown is following Morey from Houston to Philadelphia (replacing Scott O’Neil as CEO).

Why are these executives fleeing the Rockets?

Jonathan Feigen of the Houston Chronicle:

The Rockets’ agreement with Morey, Brown and others that were part of sale when the team was sold to Tilman Fertitta in 2017 gave five-year guaranteed contract extensions in which they will get paid by the Rockets, even after taking positions with other organizations, a person with knowledge of the agreements said.

Tim MacMahon of ESPN:

That was nice of Leslie Alexander, but it looks like a blunder by Tilman Fertitta to accept those terms. Those clauses gave Morey and Brown incentive to leave Houston. They can now double dip in salary but would have each earned only one income if staying with the Rockets. Fertitta could have given Morey and Brown the big money Alexander wanted, just with a more-logical structure.

As the Rockets went south around James Harden’s trade request, that made it even easier for Morey and Brown to move on. Heck, if Harden knew of Morey’s contract terms and suspected Morey would leave, that might have even influenced Harden’s decision.

Houston is seemingly pleased with its new general manager, Rafael Stone. But Morey is among the best in the business, and the Rockets had him under contract.

Now, they’re paying him while he works elsewhere.

It’s not a great setup.