I would not want to buy Terry out on sheer principal. He's an arrogant prick living in 2010 so why help him collect 2 paychecks? I would sign Moreland today to a minimum contract for 2 years with a team option for $1-2million for a 3rd year after that. I would move forward with the exact team in place including Terry, Casspi, Acy, and Moreland. Keep in mind the tax is assessed at the end of the year based on you end of the year contracts so there is nothing to stop the Kings from starting the season above the cap. I would then actively shop Outlaw, Terry, Landry, JT and DWill (though I believe if Malone spends a little extra effort on him he can light a fire under his backside) along with the 7million trade exception. With all of these assets you are sure to be able to move at least one of them before the year is out to a partner looking for cap relief. JT will be made more or less redundant if you sign Moreland because he is not a great defender or a good rim protector (which Moreland can be) and he is not a good scorer (which landry is) though I would prefer to move Landry, Terry or Outlaw. If towards the the middle of the season you are still unable to move any of them and create a better cap situation, simply buy out the least expensive ender (Outlaw or even Terry if you absolutely must) and you will be below the cap. The Kings have nearly $17Million in expiring deals without including Acy's contract which is non-guaranteed and a team option for 1.2M next year or Gay's $19.3M which would actually raise it wot ~$37million in expiring deals. You could also throw MCM into that with his $3million team option if he doesnt improve this year...though based on a OK summer league I do think he is on the right track.
I can tell you for sure that Terry and Outlaw will NOT be in Sacramento next year as one doesnt want to be and the other is now redundant (unless competition with Casspi turns him into Outlaw of 07-08 in which case he still wont be making $3million next year) so getting rid of them one year early can be swung but should be a last option to stay below the cap. Under no circumstances though should this team who will barely win 30 games be above the cap.
PDA stated the way forward for this team is signing / getting players who are good, even if they are overpaid (like Josh Smith or Landry) who can make the team better without having to give up pieces that are in the long term plans of the organization. Well, Terry and Outlaw are definitely NOT in the long term plans and I would doubt, based on the SL performances that DWill will be past this year so I am OK with getting rid of them at the last minute to get below the cap. With the huge cap space I would try to keep Gay on a more reasonable contract (~$12-13/yr) and go out and get a better PG (Rondo) by overpaying a little ($12-15/yr) and a some good shooters and perimeter defenders (beleneli, danny green, tayshaun prince, type guys) while keeping JT/Moreland for the bench trying to trade landry.-
