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March 14, 2012
Dwight Howard
What Should the Magic Do?

by Bradford Doolittle

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We're just two days away from the trade deadline and we still don't have definitive news about how the Orlando Magic are ultimately going to handle the Dwight Howard situation. We do, however, have a pretty good idea how they should. It comes down to how Howard is valued versus the various packages Orlando might land in exchange for the game's best center.

The methodology for this framework is adapted from my Basketball Prospectus colleague Kevin Pelton, who broke down the options for the vaunted 2010 free agent class using the methodology you're going to see here. The tools we'll use for this exercise are our SCHOENE projection system and WARP (wins above replacement), our bottom-line metric.

The first step is to use SCHOENE to project Howard's three-year WARP beginning with this season. For context, I'll add in the same valuations for Miami's big three, just to give you an idea of the scale involved. SCHOENE is extremely conservative when it comes to forecasting the future value of veterans, which is one of the many reasons why Howard, who is still just 26, is such a precious commodity.

Player          Tm   Age  2012  2013  2014    Tot
-------------------------------------------------
Dwight Howard  orl  26.4  18.7  15.6  16.3   50.6
LeBron James   mia  27.3  26.2  15.2  13.4   54.8
Dwyane Wade    mia  30.3  14.1   9.0   9.0   32.1
Chris Bosh     mia  28.1   8.4   5.2   4.1   17.7
-------------------------------------------------

One feature of this framework is that we can estimate a WARP value for non-player assets like draft choices and cap space. All of these things have to come into play when you're evaluating any potential Howard trade. That's especially true here because any deal that might be completed will almost certainly involve the team acquiring Howard to also take on the contract of Hedo Turkoglu. Given the value of the typical unrestricted free agent, each $2.5 million of cap space is worth about 1 WARP. So there is tangible value beyond on-court talent to clearing away a bad contract in a Howard trade.

To evaluate any potential Howard trade, you add up the properly-valuated assets coming back -- players, cap space and draft picks. If the total three-year value of the deal matches or exceeds Howard's three-year projection for 50.6 WARP, then you do the deal. It's a no-brainer.

However, the much more likely scenario is that potential trades being thrown at the Magic will not match the value of one of the game's most-prized players. So then the decision becomes less cut and dry. Ultimately, Orlando general manager Otis Smith has to rate the chances of Howard sticking around for the long term. Once you've done that, you can apply our framework to inform whether it's a worthy gamble to let a deal pass. For instance, if you think there is a 50 percent chance that, all things being equal, Howard will return to the Magic after the season, then any package that is valued at half his projected WARP or less has to be turned down, no questions asked. If you're a 100 percent sure he's walking, then the market has you over barrel: you just take what you can get, but what you get has to be more valuable than cap space. Otherwise, you just let Howard go.

No one except for Howard really knows how likely he really is to stick with the Magic beyond this season, or next if he chooses to forgo his opt-out option this summer. If it's really a 50/50 proposition, then the murky area for Smith is that zone between half of Howard's value and equal value. Obviously, you're trying to get as much back as you can, but you'd be proceeding with the knowledge that you are in fact lowering the value of your roster by accepting one of those trades.

Let's try a few scenarios to put this framework into practice. In each of these scenarios, we're only going to look at the deals from Orlando's perspective. We're going to pull these scenarios from the latest speculation from around the Web. Keep in mind, we're not suggesting that these trades will or should happen, we're just giving you a framework by which you can evaluate any potential Howard deals. We've chosen one that doesn't work, one that does and one that falls into the uncertain zone.

SCENARIO 1: Bulls

MAGIC GET: Omer Asik, Luol Deng, Carlos Boozer, a future Charlotte first-round pick
MAGIC LOSE: Dwight Howard, Hedo Turkoglu

Player          Tm   Age  2012  2013  2014    Tot
-------------------------------------------------
Dwight Howard  orl  26.4 (18.7)(15.6)(16.3) (50.6)
Hedo Turkoglu  orl  33.1 ( 2.8)( 1.8)( 1.3) ( 5.9)
                                    ORL OUT (56.5)
Omer Asik chi 25.8 1.5 1.2 0.7 3.4 Luol Deng chi 27.0 6.1 3.3 3.1 12.5 Carlos Boozer chi 30.4 6.0 1.7 1.9 9.6 1st rounder cha -- -- -- 1.0 1.0 ORL IN 26.5 -------------------------------------------------

The three-year return on Orlando's outgoing package of Howard and Turkoglu is valued at just 46.9 percent of the assets the Magic already have in hand. So if the Magic feel that there is a 47 percent chance or less that Howard will return, then they can consider the package.

The worst thing about this scenario for the Magic is that by taking back Deng and Boozer, they get absolutely no cap relief. In fact, since Asik can become a restricted free agent this summer, Orlando's already-bloated cap position would be even worse. But you can see from the modest future projections for the Bulls' players why trading Howard is such a tricky proposition. He is a player of the age and type that should remain at elite value for the foreseeable future. As good as Deng, Boozer and Asik might sound today, they are in fact player types that tend to have a lot of attrition. That's not to say they won't still be good or hold their value. There is just much less certainty than with Howard.

Also, we're being a little generous with the Bobcats' future pick here. For Charlotte's pick to lose its lottery protection, the Bobcats will have to make the playoffs two years from now. We've assumed that happens, just to give the Magic a little more incentive.

SCENARIO 2: Thunder

MAGIC GET: James Harden, Serge Ibaka, Daequan Cook, Cole Aldrich, Nazr Mohammed, cap space
MAGIC LOSE: Dwight Howard

Player          Tm   Age  2012  2013  2014    Tot
-------------------------------------------------
Dwight Howard  orl  26.4 (18.7)(15.6)(16.3) (50.6)
                                    ORL OUT (50.6)
James Harden okc 22.7 11.7 6.0 7.6 25.3 Serge Ibaka okc 22.6 8.2 5.4 6.3 19.9 Daequan Cook okc 25.0 1.3 1.5 2.3 5.1 Cole Aldrich okc 23.5 0.9 0.8 0.8 2.5 Nazr Mohammed okc 34.6 (0.5) -- -- (0.5) Cap space orl -- -- 1.5 -- 1.5 ORL IN 53.8 -------------------------------------------------

It's unclear how serious these rumors really were, but the proposal was said to be a non-starter from Oklahoma City's perspective. We include it here to give a different spin to a Magic proposal, one where they land a pair of ascending talents with plenty of present value who are also still working off their rookie contracts. Any deal between these clubs would have to include plenty of filler to make the salaries work, but it still would yield a bit of cap space for the Magic next season.

You're reading this right: the proposed trade would add value to the Magic even while dealing Howard. Clearly, this is the type of deal Orlando should be shopping for. It's also easy to understand why Oklahoma City shied away from it.

SCENARIO 3: Nets

MAGIC GET: Brook Lopez, MarShon Brooks, Mehmet Okur, Shelden Williams, Kris Humprhies, Nets' 2012 first-rounder, Rockets' 2012 lottery-protected first rounder, Nets' 2014 first-rounder, cap space
MAGIC LOSE: Dwight Howard, Hedo Turkoglu

Player          Tm   Age  2012  2013  2014    Tot
-------------------------------------------------
Dwight Howard  orl  26.4 (18.7)(15.6)(16.3) (50.6)
Hedo Turkoglu  orl  33.1 ( 2.8)( 1.8)( 1.3) ( 5.9)
                                    ORL OUT (56.5)
Brook Lopez njn 24.1 0.8 4.2 4.9 9.9 MarShon Brooks njn 23.2 2.0 3.2 3.2 8.4 Mehmet Okur njn 32.9 (0.8) -- -- (0.8) Shel. Williams njn 28.5 (0.2) -- -- (0.2) Kris Humphries njn 27.2 5.0 -- -- 5.0 2012 1st rnd njn -- 3.0 3.0 3.0 9.0 2012 1st rnd hou -- 1.0 1.0 1.0 3.0 2014 1st rnd njn -- -- -- 1.0 1.0 Cap space orl -- -- 6.0 -- 6.0 ORL IN 41.3 -------------------------------------------------

Okur, Williams and Humphries are all added into the trade to make the salaries work. All of them have expiring deals, which means plenty of cap space for Orlando beginning next season. The Magic would also be adding a bundle of first round picks and two upside players in Lopez and Brooks, who could both prove to be worth more than SCHOENE projects here.

As is, the return in this deal for Orlando is 73 percent of the outgoing worth of Howard and Turkoglu. That puts it firmly in the grey area. How certain are you that Howard is going to walk? A deal like this won't necessarily make up for his loss, though with the upside of these assets, it might. As sweet as this package looks, you'd still much rather have the certainty of a Howard contract extension.

There are a lot of variables in play for the Magic this week, and unless a Thunder-type panacea presents itself, there will be a tough decision to be made in the days ahead. It's fun for us to play with these scenarios as fans and analysts. And maybe it's even instructive, perhaps the Magic use a similar methodology when evaluating potential deals. Still, we're glad we're not in Otis Smith's shoes right now, because it looks like he's in a no-win situation.

(A version of this article originally appeared at ESPN Insider Insider.

(Get your copy of the most comprehensive guide to the new NBA season. Pro Basketball Prospectus 2011-12 is now available in .PDF and paperback format.

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Bradford Doolittle is an author of Basketball Prospectus. You can contact Bradford by clicking here or click here to see Bradford's other articles.

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