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The Cost Of A Dwight Howard Sign-And-Trade

As Dwight Howard remains holed up in Colorado, weighing his options and preparing to make the biggest decision of his life, recent reports have suggested that the Lakers may be more open to considering a sign-and-trade deal.

The Rockets already have the necessary cap space to sign Howard outright, and the Warriors are trying to figure out a way to create that room as well, but the preferred scenario for both teams would likely be a sign-and-trade. So why wouldn't the Lakers seriously consider that option? Well, they might. But there are a few reasons why it could be a bad idea for the team.

1. The Lakers still believe they can re-sign Howard.

Until Howard makes his decision official, his potential suitors presumably don't want to make any moves that would turn him off or alienate him. Adrian Wojnarowski of Yahoo! Sports tweeted this morning that the Lakers remain "prominent" in Howard's mind, and L.A. still has the advantage of being able to offer him about $30MM more in guaranteed money than any other club.

If and when Howard decides he wants to sign with the Rockets, or the Warriors, or the Mavericks, then the Lakers could consider signing-and-trading him to regain some value. But until then, there's no reason for the Lakers to signal that they're exploring that option, lest they risk pushing Howard away.

2. The Lakers want to have maximum cap flexibility next summer.

As ugly as the Lakers' team salary looks for 2013/14, the books for '14/15 are relatively clean. Only Steve Nash remains under contract beyond next summer, at a salary worth about $9.7MM. That means Los Angeles should be able to create a tremendous amount of cap space during an offseason that could see marquee players like LeBron James, Carmelo Anthony, and others hit the open market.

In a hypothetical sign-and-trade with the Rockets, Houston's primary trade chips for matching Howard's salary are players like Omer Asik and Jeremy Lin. Both guys are solid young pieces, but they also have a combined cap hit of nearly $17MM for 2014/15, which would put a significant dent in the Lakers' future flexibility.

3. Taking players back in a sign-and-trade would be very expensive.

Regardless of where he signs, Howard will be in line for a starting salary of $20MM+ on his new contract, but the Lakers wouldn't necessarily have to take back that amount in a sign-and-trade. Still, they'd have to take on some salary. For instance, if the Warriors aren't able to clear room to sign D12 outright, an offer that includes Andrew Bogut and Klay Thompson or Harrison Barnes seems plausible.

Many pundits have made the case that taking on Bogut's expiring $14MM contract along with Thompson or Barnes, and perhaps a first-round pick, would be a nice haul for the Lakers if Howard doesn't want to stick around. And from a basketball perspective, that's true. From a financial perspective though, there's a case to be made that the Lakers might be better off simply letting Howard walk.

Here's some quick and dirty math on how that hypothetical sign-and-trade with the Warriors would affect the Lakers' tax payments for next season: According to Storyteller's Contracts, L.A. currently has $77,381,035 on its books for 2013/14, not including Robert Sacre's qualifying offer. That figure only accounts for eight players, so the club will be adding more players and more salary no matter what happens with Howard, but for our purposes, let's just look at that $77.38MM figure for now.

Taking into account the CBA's new increasing tax penalties, and assuming a tax threshold of $71.6MM, a team salary of $77,381,035 would result in a tax bill of $8,866,811, for a total payment of about $86.25MM. Now, let's throw in Bogut's and Thompson's salaries of $14,000,000 and $2,317,920 (if the Warriors were to offer Barnes instead of Thompson, that second salary would be even higher). Adding those figures to the previous total brings the overall sum of the team's 10 guaranteed contracts to $93,698,955. The tax bill for that amount? A staggering $52,871,081, for a total payment of about $146.57MM.

Again, there are plenty of moving parts still in play with the Lakers' roster, so it's probably not fair to say that acquiring Bogut and Thompson would immediately cost the team $60MM. But taking on a sizable salary like Bogut's in a sign-and-trade deal would come at a significant price that far exceeds Bogut's already exorbitant $14MM salary.

Would it be worth spending that much money in 2013/14 to add long-term assets like Thompson and a first-round pick? If any team can afford it, the Lakers are probably that team. And L.A. has already shown a willingness to go that deep into the tax to re-sign Howard, so it's not as if the club is entirely opposed to the idea. But Howard has the potential to be a franchise player, whereas Thompson and a future first-rounder would likely just be secondary pieces.

For the Lakers, the decision certainly isn't a no-brainer, and the situation provides a perfect example of how the new CBA doesn't make it easy for a taxpaying team like the Lakers to continue improving its roster.

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