Now that Dwight Howard's agreed not to exercise his ETO this summer, the prospect arises that Orlando will retain his services until the summer of 2013. That means we're going to get a lot of stories, speculation and rumours about who Orlando can sign in 2013 - and given that Chris Paul's contract is up, that will be the obvious target for a lot of fangasms.
So do Orlando have the cap space in 2013 to sign two max free agents (ie Dwight and Paul/An Other)? Let's find out.First up, let's look at what the cap could be in the summer of 2013. We know the cap is locked at $58.1m for the current season and the next season, but 2013/14 will be the first season the cap can be adjusted to account for the new basketball revenue number. It's impossible to speculate what that number will be, but historically, the NBA tends to see modest revenue growth year on year. Let's assume more modest revenue growth, and set a cap figure of $60m, which is a nice round number to make the math easy going forward.
Next, let's figure out what numbers the Magic are currently locked into for 2013. The Magic have 4 players under contract for 2013/14 at present - Hedo Turkoglu, Glen Davis, Jason Richardson and Chris Duhon.
- Hedo Turkoglu - $12m, $6m guaranteed
- Glen Davis - $6.4m
- Jason Richardson - $6.204m
- Chris Duhon - $3.5m, $1.5m guaranteed
Some quick maths gives us $28.104m total with $20.104m guaranteed. However, we also need to consider Quentin Richardson, who holds a player option for $2.809m in 2013, which he will probably exercise. This boosts our numbers to $30.913m, with $22.913m guaranteed. Which in turn promises a minimum of $29.087m, and a maximum of $37.087m in cap space if we release Turkoglu and Duhon.
Sounds good, right? Not so fast. With the minimum likely players under contract (Davis and both Richardsons), the NBA will assign 9 cap holds to the Magic to take up their space. For the purposes of this analysis, we will assume a $500k figure per cap hold (it's currently roughly $475k and will increase slightly as the cap goes up). 9 holds at half a million each = $4.5m gone from our cap room.
We now have at most $32.587m in cap space. Is this enough to sign two maximum free agents? The short answer is...no.
Both Dwight Howard and Chris Paul will be 7-9 year veterans in 2013. This makes them eligible for a maximum contract of 30% of the salary cap. As we have set the cap at $60m, their max contract amount is $18m each - $36m total. If we were to sign both, they would have to leave a total of $2.4m on the table, settling for $16.8m each, roughly. Possible, but it will require them to accept considerably below market value deals. Plus, to free up that much space, the Magic would have to decline to re-sign Ryan Anderson this summer (or sign him to a 1 year deal) and allow all their other players to leave at the end of 2012-13.
Bottom line - don't expect the Magic to be in the running for Chris Paul, or any other maximum contract free agent, in the summer of 2013, unless their own maximum contract superstar Dwight Howard, leaves.