The two teams that seem most likely to land Howard long-term are his current team, the Lakers, and the team that would most love to have him, the Houston Rockets. First, The Lakers have been swept in the opening round of the playoffs for the first time since 1967. Kobe is probably not going to come back for next season and even if he does, will he be the Kobe we know, especially at his age. Steve Nash has declining skills but is still getting handsomely rewarded. Is D'Antoni the coach that can maximize Howard's value? We all have seen when Dwight is at odds with his coach. We just heard Dwight Howard call this season "a nightmare that he couldn't wake up from." The Lakers are overtaxed and will be writing a big luxury tax bill. If they continue to stay in the luxury tax territory after next season it will be worse. The Lakers have little chance of improvement and development. They have very few draft picks in the future and the lack to use the majority of the exceptions or sign-and-trades. The Lakers future is at-best, uncertain.
The Rockets, however, could have the cap space to sign him and they offer arguably the best supporting cast to put around him. James Harden has emerged as one of the best shooting guards in the NBA, Chandler Parsons is one of the most underrated players and is the ultimate X-factor, and Jeremy Lin and Omer Asik have been solid this season.
They have beaten OKC, albeit in a weakened state (though you could say San Antonio was just as vulnerable), in a playoff series. Lakers, as mentioned, were swept. The Rockets have even had a close series. They could be tied 2-2 if a lucky bounce on a 3-point shot by Durant doesn't happen. The last 3 games have bee decided by 8 points TOTAL.
The arguments for the Lakers are much more straightforward. First and foremost, they are the Lakers, the gold standard of basketball around the world, the most popular NBA team of all time. Playing for the Lakers means playing in the brightest spotlight in a world of bright spotlights, and that is not something to be walked away from lightly. And then thereís the money factor. On the surface the Lakers can pay Howard quite a bit more money than anyone else, but in the case of the Rockets, thatís not quite true, all things considered.
Here are the salary comparisons, thanks to HOOPSWORLDís Eric Pincus:
Approximate Yearly Salary with the Lakers:
Year 1: $20,513,178.00
Year 2: $22,051,666.35
Year 3: $23,590,154.70
Year 4: $25,128,643.05
Year 5: $26,667,131.40
Approximate Yearly Salary with the Rockets (or any other team):
Yes, when looking at the numbers alone, the Lakers clearly have the advantage over any other team looking to lure him away. In the case of a Texas team like Houston, however, there are some significant factors that have to be considered. Texas has no state income tax, and for someone making better than $20 million a year, thatís a huge consideration. Just look at how the California income tax breaks down over the first four years of the contract:
Year 1: $1,075,666.03
Year 2: $1,156,340.98
Year 3: 1,237,015.93
Year 4: 1,317,690.88
If we look at the first four years of the contract, Howard would make $3,692,371.44 more with the Lakers than he would with the Rockets. Adjusting that number for Californiaís state income tax, however, Howard would actually make $1,094, 342.38 more as a Rocket playing the majority of his games in a state with no income tax because he would save $4,786,713.82 in taxes.
As for the fifth year, the Lakers certainly have an advantage in being able to offer Dwight more long-term security, but unless he suffers a career-ending injury he is going to sign a contract after this one, meaning he will get paid for that fifth year wherever he plays. He would most likely have an opt-out, anyway, meaning the fifth year is not really a major bargaining point, again, barring injury. For what itís worth, Howard would pay $1,398,365.83 in state income tax in California if he were to play out the end of that deal.
The other factor involves where games are played. NBA players pay 1/82nd of their income tax to the states where they play, providing those states have state income tax. As a member of the Rockets, Howard would play all of his home games and the highest possible number of his away games in states with no income tax. Texas is obvious, with the San Antonio Spurs and Dallas Mavericks in the same division, but there are also two games in Tennessee and two games in Florida, the other NBA states without income tax for a total of 49 games each season. As a Laker, Howard would only play ten games in those states.
The comparison doesnít end with state income tax, however; the cost of living must be considered, as well. Manhattan Beach is the place to live in LA, and high end houses in that posh part of California runs $1,101 per square foot. How does that compare to, say, The Woodlands in Houston, the correspondingly cool place to live? A high end house in The Woodlands would run just $108.00 per square foot, or roughly one-tenth the cost of its counterpart in Manhattan Beach. Additionally, the salary indicator based on cost of living demonstrates that in order to make the equivalent of $20 million in Houston you have to make $30,330,020 to live comparably in Los Angeles.
Thatís a staggering difference!
The other argument that people like to make in favor of the Lakers is that Howard could potentially make a great deal more money through endorsements in Los Angeles than he could elsewhere, and while there might be a little bit of truth to that, itís not as big as people think. The national brands like adidas will find him wherever he is, like they found him in Orlando. The smaller local endorsements are just as plentiful in Houston as they are in Los Angeles, and again, no state income tax comes out of the Houston deals. Additionally, a company looking for a Lakers endorsement are still going to call Kobe Bryant first; in Houston, Dwight would own the space. He would also get to spend time working with and learning from Hakeem Olajuwon, who still calls Houston home.
Howard could enjoy success in Houston and still get paid. There's less uncertainty. Morey proves he will always look to improve the team, as Kuchak and Buss will do but as I said their hands are a little tied. We will see but it looks good for the Rockets.