The Rockets officially announced that they have exercised the team option for the fourth year of Shepard's rookie contract.

The Houston Rockets announced Friday that they have exercised the team option for the fourth year of Reed Shepard's rookie contract. His salary this season is approximately $11.11 million, and is projected to increase to $14.04 million for the 2027/28 season.

The 22-year-old Sheppard is a 6'8" combo guard who will enter the NBA as the third overall pick in the 2024 draft. A regular in Ime Udoka's rotation, he has played 138 regular season games for the Rockets to date, averaging 10.0 points, 2.4 rebounds, 2.6 assists, and 1.2 steals in 21.0 minutes per game, with a 41.3% field goal percentage and a 37.9% three-point percentage.

Shepard also played 9 playoff games, averaging 8.1 points, 0.8 rebounds, 3.2 assists, and 1.7 steals in 22.4 minutes per game. However, both of his playoff appearances ended in the first round.

Under the NBA collective bargaining agreement, Sheppard will be eligible for an early contract extension next July. If the two sides fail to reach an agreement, he will enter the restricted free agent market in 2028.

However, the Rockets' management has been focusing on long-term team building in recent years and has successively reached contract extension agreements with the team's rookies. With Amen Thompson and Taj Ethan securing long-term contracts, Shepard is also highly likely to become the Rockets' next key contract extension target.

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