Magic's big splash in free agency raises big questions

By John HollingerESPN Insider

Go early or go late.
When it comes to free agency, it seems that's the best way to win. Successful teams either jump right in with both feet and make the best offer to the top guy on their list, or hang tight until mid-August and start picking off the leftovers at below-market prices.
Monday, we had a big winner in the "go early" department. Orlando raised eyebrows around the league by agreeing with Rashard Lewis on a max contract that could end up being worth roughly $80 million over five years depending on what the league's new salary cap number is (that figure will be determined July 11).
Here's where it gets really interesting: Not only are the Magic going to pay Lewis the maximum salary, they're also effectively giving up on Darko Milicic to make the deal. The only way the Magic can fit a maximum deal under the salary cap is by renouncing their rights to Milicic, making him an unrestricted free agent.
But first things first. Let's deal with the big questions from this signing one by one and then work our way down to its impacts:

Is Lewis worth the money?
If you accept that winning any bidding war for a free agent involves a certain degree of overpayment, especially for one as coveted as Lewis, the answer seems to be yes. He's played at something approaching an All-Star level the last three seasons, his PER has risen slowly every year he's been in the league, and he's young enough (28 in August) that he should play at this level for a couple more years.
Additionally, the back end of the contract shouldn't get too ugly because players like Lewis tend to age well. His two best assets -- his height and shooting ability -- won't diminish much as he gets older, and clearly he takes care of himself. By the time the contract ends he'll be almost 33 -- a bit troubling, perhaps, but certainly nowhere near the risk involved with older players such as Chauncey Billups and Vince Carter.
Plus, with Billups and Carter intent on re-signing with their respective teams, Lewis was the single best "portable" free agent available. Getting the No. 1 guy rarely fails as a free agent strategy; even if Lewis somehow fails to live up to his Seattle numbers, the Magic still are getting a quality player.
So the Magic might have overpaid a little, but they didn't waste their money. And with Dwight Howard about to sign a huge extension, this was their last shot to play the market for a long time.

Why wasn't he worth it for Seattle?
The Sonics obviously were interested in keeping Lewis, otherwise they wouldn't have flown to Houston this week to woo him. The key here is that Orlando's number was bigger than Seattle's number. With Kevin Durant and Jeff Green already in the fold, Lewis replicated some skills the Sonics already had, so while the Sonics probably would have been OK with something less generous, they weren't going to make a bid in Orlando's range.
And by not maxing out Lewis right now, the Sonics are better poised to add players later. Removing Lewis' cap hold puts Seattle $3.8 million under the salary cap right now, if we assume a $56 million cap for this season (again, the final number won't be known until July 11).
But the big splash is two years down the road. At that point, the expiring deals of Wally Szczerbiak and Chris Wilcox will take roughly $20 million off the Sonics' books. While extensions to Robert Swift and Delonte West are likely to eat up a portion of that, it still leaves Seattle with more than enough dough to chase a superstar in the summer of 2009.

What about a sign-and-trade?
A sign-and-trade deal conceivably could have benefits for all sides. Orlando possibly could unload contracts and make room to keep Milicic. Seattle could gain assets in return for Lewis. And Lewis could get an extra year on his deal and command larger annual raises, though Orlando might balk at the additional risk without a sizable sweetener.
The problem is making it work. Although Seattle and Orlando have eight days to work out a deal, there isn't a great chance of this happening. Seattle reportedly isn't enamored of anyone on the Orlando roster (well, except Howard), so at best it would need to be a three-way deal. Those types of swaps are notoriously complex and difficult to pull off, especially because other teams covet few of Orlando's assets.
What Seattle might find more alluring is the prospect of a trade like Indiana made a year ago with the Hornets when Peja Stojakovic left. That swap gave the Pacers a $7.5 million trade exception that they turned around to acquire Al Harrington. In this case, the Sonics would get a $9.35 million trade exception (again, assuming a final cap number of $56 million) if they took nothing back from Orlando.
But this works only if Seattle can offer Orlando a little something for the trouble -- a draft pick being the most likely bait. And the trade exception might not mean as much to the Sonics as a draft choice at this point in their rebuilding process -- especially because trade exceptions can be difficult to use and expire in 12 months.

What about Darko?
The most interesting question involving the Lewis signing is how it affects Milicic. It appears the Magic will have to renounce his rights to fit Lewis under their salary cap. Considering the Magic sent Detroit a first-round pick for Milicic a year and a half ago, it's surprising that they seem so willing to let him go.
However, they still can make some moves in the coming days to try to squeeze in Darko. The most obvious trade target is Hedo Turkoglu, who has three years remaining on a deal for the full midlevel exception. Turkoglu is a 6-10 small forward who likes to shoot from the corners; as you might have noticed, Lewis is also a 6-10 small forward who likes to shoot from the corners, making Turkoglu utterly redundant.
The other candidate would be Carlos Arroyo, the flashy point guard who fell out of favor in the second half of last season. Because the Magic have two other candidates to back up Jameer Nelson (Keyon Dooling and Travis Diener), it would seem his $4 million per year is highly expendable.
Together, dealing those two players would trim $10 million from the payroll, leaving more than enough space to re-sign Milicic. Finding a taker is the problem. They'd have to be dealt to a team under the cap, or in exchange for players with non-guaranteed contracts (Houston's Bob Sura, who has limited salary protection, is the only substantial one that comes to mind). It probably would cost the Magic a draft pick just to get rid of them, too.
Unfortunately, those teams that are under the cap are the same vultures who will begin circling once Orlando has to renounce its rights to Milicic. So don't expect Memphis or Charlotte to come riding in to save the day here. Those two teams all have obvious needs in the middle and enough cap space to make Milicic a wealthy man.
Additionally, the Magic might not be terribly motivated to keep Milicic in any scenario. As our Chris Sheridan reported earlier this week, Orlando didn't even put in a courtesy call to Darko when free agency opened on July 1.

Does this make Orlando a contender?
Goodness no. The Magic still have a ton of weaknesses to address, most notably a glaring hole in the frontcourt (Howard and Tony Battie are the only viable frontcourt players on the roster right now) and an open spot at shooting guard if one presumes Grant Hill leaves. Much like the Ray Allen deal with Boston, the Magic still need one more big gun to make the Clevelands and Detroits of the world start sweating.
The difference is that Orlando is starting from a much younger base. With Lewis turning 28 next month and Howard a pup at 21, the Magic still have a couple years to get things figured out. This is much less a win-today scenario than it is in Beantown, which is why the deal works out so much better for Orlando.
Additionally, adding Lewis and renouncing Milicic is a clear upgrade. While Milicic's potential is notable, few would ponder a Milicic-for-Lewis trade for long before pulling the trigger.
That's why the deal ends up being a winner from Orlando's end. This team still has plenty of work to do to separate itself from the East's huddled masses, but between the hiring of Stan Van Gundy and the impending signing of Lewis, nobody has had a better start to their offseason than the Magic.