Though it's unclear what Orlando Magic center Dwight Howard said and didn't say during a meeting he called with teammates Wednesday, Ken Berger of CBSSports.com reports, and Alex Kennedy of HOOPSWORLD confirms, Howard has indeed told team officials he plans to waive the Early Termination Option in his contract. In doing so, Howard would forgo free agency in the summer of 2012 and instead remain under contract with the Magic through the 2012/13 season. He would become a free agent in the summer of 2013.
Howard has the waiver "in his possession," Berger says, and it awaits his signature. Orlando management also wants Dan Fegan, Howard's agent, to sign the waiver, which Berger notes "essentially would be unprecedented," as "agents are not required to sign any documents related to player contracts, player options or early-termination options" in the NBA. As Sam Amick notes, Fegan may decline to sign it; he did not negotiate Howard's last contract and will only receive a commission if Howard signs a new deal in free agency.
For months, it's been widely assumed Howard would exercise his ETO in order to test free agency in July 2012. With the NBA trade deadline set for Thursday at 3 PM Eastern, the clock is ticking for the Magic to make a decision regarding Howard's future: trade him to ensure he won't walk in free agency, or retain him and hope he can be convinced to sign a contract extension in July.
The news that Howard intends to waive his ETO changes that calculus entirely, but the Magic have to do their due diligence and continue fielding trade calls for Howard until he officially waives that ETO.