January 25 is the first real deadline in the Dwight Howard saga. Wednesday, as I noted in a previous post about both Dwight Howard and Ryan Anderson, is the deadline for players to sign extensions. This has been specifically noted for players ending their rookie contracts like Russell Westbrook (who signed his extension), Kevin Love (who is expected to sign his extension soon) and the Magic’s own Ryan Anderson.
This is also the final date for Howard to sign an extension or for the team that acquires him to sign him to an extension. In other words Wednesday is the final date for one of those fancy extend-and-trades. Whichever team has Howard after Wednesday holds his Bird Rights for his free agency… at least in 2012.
This is a critical point that has to be remembered in the whole Dwight Howard scenario. The team that holds his Bird Rights has the ability to give Howard a fifth year in his new contract with the extra year of salary that comes with it and a higher percent increase in salary each year. That amounts to approximately an extra $30 million Howard can make by re-signing with whatever team holds his Bird Rights.
Howard will tell you money has nothing to do with his decision. His main focus is to win and to play for a team that will compete for a title year-in and year-out. That is something, we can tell him from experience is no guarantee looking into the future. Just take a look at the 2011 team and its start to the season.
But money does have something to do with it. There is salary. There is endorsements. There is living expenses. There are state income taxes.
Money has to drive this decision, at least in part. It would be insane if it were not.
The question is whether this specific incentive to stay with the Magic will be enough. The media who departed from Orlando came away with the sense that the team will wait it out and see how much this incentive is worth to Howard.
That is what Adrian Wojnarowski of Yahoo! Sports came away from Friday’s win over the Lakers thinking when he wrote the Magic should ride out Howard this season and try to win with the roster as constructed (or add that extra piece). Otis Smith told longtime Magic writer Tim Povtak of Fox Sports Florida that Dwight “can still walk. But with a $30 million haircut.“
It is safe to say the Magic are well aware of the advantages they hold in Howard’s free agency.
Dwight Howard is quickly becoming the test case for the newest provision and protection in the collective bargaining agreement. Will this provision, allegedly put into the collective bargaining agreement to give incumbent teams an advantage in free agency, actually work the way it was designed to? Howard is going to be the first free agent to test it out, as Ken Berger of CBS Sports noted in early January.
“With a new, more restrictive collective bargaining agreement, one of these stars with eyes for greener pastures eventually is going to have to put his money where his wanderlust is. One of them is going to have to stare at a big pile of money — $25 to $30 million — and pass it up on the way out of town.
“Is Howard that guy? At 26, the fifth year and 3 percent more in raises that Orlando could offer him as a free agent next summer isn’t as crucial as it sounds. This is especially true since, if Howard is still in Orlando the morning after the March 15 trade deadline, he’ll know that he won’t be able to do what James did to get to Miami. He won’t be able to get max money in a sign-and-trade. And he can’t do what Anthony did, because max money in an extend-and-trade is no longer an option in the new CBA.
If Howard wants to go to Dallas or Brooklyn, what difference would it make whether he made that additional $25 million in the last year of a five-year deal with Orlando or the first year of a new deal when he becomes a free agent again in 2016? As long as he stays healthy, the answer is simple: no difference.”
The whispers about Howard getting a bonus from adidas for going to a market like New York or Los Angeles would more than make up for the $25 million he loses in salary.
There are advantage though to staying in Florida. Florida has no state income tax so Howard would keep more of his salary.
And from a raw number perspective, you have to believe these athletes take some sense of pride in the status of being the max of the max contracts. Of course, as with everything in this series, only Dwight knows what he really wants.
So assume, for now, that Dwight does care about this extra $30 million and that he still considers staying in Orlando a viable option. Is going to free agency this summer his best option?
I think I am going to save that for a separate post… tomorrow I will have the realistic plan to keep Dwight Howard.