Lakers’ financial advantage may not be enough for Dwight Howard
Dwight Howard was adamant that his free-agent decision will be about personal happiness.
Happiness is a subjective term. When Howard chooses a team this summer, he may not favor the team capable of paying him the most money.
The Lakers can offer Howard the biggest contract, a five-year worth $118 million. The most another team can give is a four-year deal at $88 million.
If Howard believes he’ll be happier outside of Los Angeles, he would be forfeiting $30 million in guaranteed salary. The caveat -- Howard is likely to land another major contract before he retires.
After four years, he would have every expectation of making up that money in a new deal. The only true advantage to locking in a fifth year this summer is protection against significant injury.
If the fifth year is taken out of the equation, there’s not a major difference between a deal with the Lakers and a prospective suitor like the Houston Rockets.
While a Lakers’ contract would include 7.5% raises against 4.5% from another franchise, a Houston deal would provide a significant tax benefit.
As detailed by Tony Nitti of Forbes.com, a Houston four-year deal would net roughly an additional $8 million in after-tax income. Texas doesn’t have a state income tax.
With Kobe Bryant’s Achilles’ injury, minimal young talent and a tremendous pressure to win, the Lakers’ future is uncertain. The team may be able to lure major talent in 2014 with their prospective cap room, but Houston can already boast James Harden, Jeremy Lin, Chandler Parsons and Omer Asik.
The league’s latest cap projections of $58.5 million for next season could complicate matters for Houston. Without making a trade, they’ll have about $16.2 million in cap space.
Howard is eligible for a contract starting at $20.5 million, which means the Rockets may have to clear about $4 million in salary to make the Lakers center a lucrative offer.
Happiness may trump the economics for Howard but the Lakers may not have a clear advantage on either front.
Since his exit interview with the Lakers, Howard has declined to comment on his upcoming decision. That hasn’t stopped speculation.
He may re-sign with the Lakers but he very well may leave for another team -- be it the Rockets or another franchise. The Atlanta Hawks, Dallas Mavericks, Cleveland Cavaliers and a number of other teams are expected to have cap space this summer.
The Lakers hope for a positive decision well before July but it may be more likely for Howard to wait until July, after hearing pitches from a number of suitors.
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