Report: Rockets officially decline team option on Chandler Parsons, making him an RFA

The Houston Rockets have declined their 2014-15 team option on small forward Chandler Parsons, making the 25-year-old Florida product a restricted free agent.

This move had been expected for some time, but the team officially told Parsons on Saturday.

This move obviously comes as a bit of a surprise to fans, who likely saw the $964,750 option as a certainty to be picked up. After all, Parsons' value far outstrips that measly salary, and the degree to which he's been underpaid for the past three seasons has been part of the reason the Rockets have been able to be competitive while maintaining the financial flexibility to add stars.

The main reason to decline the option is that by doing so, Parsons becomes a restricted free agent. That means the Rockets have the right to match any offer sheet he signs with another team. Had they picked up the option, he would have become an unrestricted free agent in 2015, free to sign with any team.

While some thought there may be a salary cap reason for doing so, that's actually not true. With his option picked up, Parsons' salary would have counted against the cap while the Rockets attempt to maneuver to add another star. Now, Parsons will have a cap hold on the books, the amount of the qualifying offer the team must tender him to retain his rights. That figure, while less than $3 million, will surely come in ahead of his option value, cutting into the Rockets' space slightly.

The Rockets can, however, sign a free agent while Parsons' cap hold remains and subsequently sign Parsons to a new deal closer to market value. Timing is the key there, but the Rockets may be able to have their cake and eat it too, so to speak.

They'll want to keep Parsons assuming the market doesn't bear a ridiculous contract for him. In his third NBA season, he averaged 16.6 points, 5.5 rebounds and four assists, shooting 47.2 percent from the floor and 37 percent from long range.