We don't know the parameters of Francisco Garcia's extension yet, just that it is a five-year deal worth a total $29.8 million. It could be progressive, flat or declining. But we can assume there won't be a ton of variation around the mean salary, $6 million.
The extension doesn't kick in until 2009-10, so there's no change for '08-09: the team remains near the luxury tax level, and the team cannot afford to take back more salary than is dished out in any trade this year.
In 2009-10, the team now projects to be just under the salary cap level of roughly $60 million: Kevin Martin, John Salmons, Garcia, Kenny Thomas, Brad Miller, Jason Thompson, Spencer Hawes, Beno Udrih, Donté Greene and two first-round picks comes to roughly $57.5 million in salary. By July 2009, the Kings must decide whether to waive Mikki Moore. If they do waive Moore, the Kings will be on the hook for $2 million. (That figure is included in the above figure.) If not, Moore will earn $6.2 million, and the cap number at this point would be about $62 million, which is certainly over the cap. By the end of this October, the Kings must decide whether to pick up the '09-10 contracts of Shelden Williams ($4.3 million) and Quincy Douby ($2.2 million). Picking up both would put the Kings within $2 million of the luxury tax line if Moore is kept, or about $6 million away from the luxury line if Moore is waived. The only scenario in which the Kings next summer will be too close to the luxury line to offer its full mid-level exception is if Moore is kept and both Williams and Douby are picked up. (One other possibility: the Kings' 2009 pick is really, really high, like top 5. Those cats are expensive.)
The Kings now have seven players locked up for 2010-11. That situation, minus Garcia, is summed up in this post. We assumed a $6 million salary for Garcia (how canny), and estimating the costs of all the draft picks, we're looking at roughly $24 million of cap space in the vaunted summer of 2010. Any max player borne of the draft class of 2002-03 will command $19.6 million in starting salary. The Kings have some breathing room.
In my opinion, the bigger impact than any of this is that Garcia is locked in as a piece of the Kings' core; he's got permanent membership in the Tomorrow Brigade. Instead of worrying about his contract issues all year, we can just have fun watching him play. It worked with Martin.