Why Dwight Howard getting traded before Christmas is more likely than you think
In the wake of the lockout ending, we’re already hearing talks of the New Jersey (soon to be Brooklyn) Nets offering Brook Lopez, 2 1st round picks and a willingness to take a bad contract in Hedo Turkoglu, for Dwight Howard.
On the surface this seems like all but fruitless early negotiations. What most of us are expecting is Orlando holds onto Dwight Howard for half a season to see if they contend again and then tries a Brook Lopez trade if they need to – similar to what the Nuggets did with Carmelo Anthony.
There’s a reason why the Magic could be pre-emptive and deal Dwight:
If the Magic make a Howard for Lopez deal right now, they save an absurd amount financially. I assume the deal would look something like this:
Dwight Howard (17.9 million next year)
Hedo Turkoglu (10.6 million next year, 34.2 million/3 years lifetime)
Quentin Richardson (2.4 million next year, 3 years/7.8 million lifetime)
New Jersey Trades:
Brook Lopez (3.1 million next year)
Anthony Morrow (4 million next year, 8 million/2 years total)
2012, 2014 1st round picks
3 million cash
The Nets can absorb this massive amount of salary with a payroll at approximately at 34 million after an amnesty inevitably being used on Travis Outlaw. The salary cap will be at approximately 58 million, giving the Nets a 24 million cushion. Howard, Turkoglu and Richardson combine for 30.9 million, which is 23.8 million more than Lopez and Morrow’s salaries combined. At a present 74.8 million payroll, this takes them down to about 51.0, which is still above the league’s raised minimum salary in the new CBA (set at approximately 49.3 million). Since they will be paying 80% of the size of contracts in the shortened season, that saves the Magic about 19.0 million.
Then there’s the fact that with its 74.8 million payroll, that gives them 4.8 million of extra luxury tax fees and costing them the 2-4 million dividend teams under the luxury tax are afforded. That adds another 6.8-8.8 million in savings, to go along with the 3 million in cash handed over. That brings the total approximation of savings up to something like 28.8-30.8 million next year, not counting the extra savings created by dumping Turkoglu and Richardson. That is HUGE for a team about to face its darkest days in the post Dwight Howard era, in a market that let’s face it, is filled with a lot of retirement age, vacationers and kids, types that will likely choose an alternative if the team is dreadful.
Remember, the biggest thing that held back the Carmelo Anthony trade for so long last year was Denver and New York had to work extra hard to find a way to dump 15 million of salary from Denver’s payroll, to get them under the luxury tax and save them close to 25 million – they found that in the Minnesota Timberwolves. New Jersey can make this savings deal right now. If Orlando passes, they could see the Nets sign one of Kris Humphries, David West or Nene – which would leave enough room to sign Dwight Howard next summer, but would drastically lower how much Orlando can save. Let’s assume New Jersey is willing to spend 8-11 million this summer on another player, leaving enough room in 2012 for Howard. If the Magic traded Howard for Lopez and the picks at the deadline (the Turkoglu and Richardson dumps can’t happen anymore), their savings likely looks like this:
Half a season of the difference between Dwight and Lopez’ 80% salaries (approximately 11.8 million) - So 5.9 million in paycheques
Luxury tax savings: 6.8-8.8 million
3 million cash
Total: 15.7-17.7 million
This is still a solid return, even if it’s not the full 30 million and they don’t dump Turkoglu – it’s why the Nets are the frontrunner for Howard. In addition you have to add the extra ticket sales that having Howard brings. And if I had to guess, I’d still say the Magic keep Howard for the first half of the season and then trade him.
But who knows. Perhaps the allure of picking up that 30 million immediately and dumping Turkoglu and Richardson, to go along with setting themselves up to draft top 5 next year, is enough to make the Magic franchise pull the trigger on this early. Perhaps the Magic know that keeping Howard will lead to a 2010-2011 Nuggets first half of a distracted, unhappy team while the media sharks smell blood in the water – and that by holding off on this, they are delaying the inevitable and making their position going forward worse and worse. Maybe, just maybe, what we’re hearing isn’t smoke and we’ll get a nuke dropped on the NBA within a few days of free agency starting on Dec. 9th.