Would being able pay Chris Paul just $23.1 million instead of $38.5 million for a shortened 50-game 2021 NBA season be enough to motivate the Los Angeles Lakers to trade with the OKC Thunder for the veteran point guard?
It’s an question that shines a harsh light on how the financial fallout from the coronavirus pandemic on the 2020 and 2021 NBA seasons is likely to alter the economic landscape between big market and small market teams. We already know that the difference in revenues between a big market team like the Los Angeles Lakers and a small market team like the OKC Thunder is in many ways the difference between real dollars and Monopoly dollars.
The NBA estimates a coronavirus afflicted 2021 Season with only 50 games could lead to having 40% of players’ salaries held in escrow and eventually lost due to the decline in their share of league basketball related income. While the owners would also lose 40% of their BRI or basketball related income, they would also not have to pay 40% of their player salaries, which to an extent ameliorates or minimizes their bottom line losses.
The Lakers are worth over $2 billion dollars, second only to the Knicks, with most of that value not subject to taxes until the franchise is sold. The Lakers could easily absorb short term losses to win another NBA championship. Small market teams like the Thunder have to rely on franchise appreciation rather than operating income to assess value and don’t have the resources or liquidity to weather difficult economic conditions like the Lakers do.
Just as wealthy investors become buyers and less secure investors become sellers when times are tough, now could be the perfect time for the Lakers to take advantage and trade for Chris Paul while his salaries are discounted. With the NBA looking at a 40% reduction in BRI for the 2021 season due to fewer games and the likely lack of live fans, Chris’ 3-year contract obligation could drop from $124.1 million to $108.7 million, a 12.5% discount.
Add to the equation the possibility the new CBA negotiated after this season could easily include another amnesty clause, there could be a legitimate opportunity for the Lakers to take advantage of the league’s financial crisis. There may be no team in the NBA who’s more willing to spend money or even pay luxury taxes to win championships than the Los Angeles Lakers. That motivation to win is not likely to wane just because times are tough.
Finally, there’s the reality that highly profitable teams like the Lakers have significant advantages over less profitable franchises when it comes to taking advantages of losses to shield profits and reduce income taxes. Losses by highly profitable teams like the Lakers can be carried forward and backward to dramatically reduce federal and state income taxes for past and future years with the net result of even cutting the losses in half.
Chris Paul would be a perfect fit on the Lakers as the third superstar alongside LeBron James and Anthony Davis. He would be the second playmaker, third scorer, and elite defender the Lakers desperately need. While he wouldn’t be the young superstar the Lakers want to keep their championship window open after LeBron retires, Chris would make the Lakers odds on favorites to repeat and threepeat the next two seasons.
The looming reduced player salaries for the 2021 NBA season can provide the Los Angeles Lakers with a unique opportunity to add a future HOF point guard who can help them win two more championships at a discount. It’s an opportunity of which the Lakers cannot afford not to take advantage.
While I personally would prefer the Lakers traded for Myles Turner and Victor Oladipo for the reasons I stated in my article before this one, I do think the prospect of a shorter 2021 season likely without fans and dramatic cut in player salaries makes a Chris Paul trade more likely and do think it might be the Lakers second best option.
I don’t like including a S&T of KCP, THT, or Caruso but would have to include the pick to have enough salary for the trade to work. Since CP3 makes 38.5M, we have to send $30.8M to make it work, which we could do with Kuzma, Green, Bradley, McGee, Cook, and the player picked #28.
Assming we can resign KCP, Rondo, Morris, and Howard, that would leave us with the following:
PG: Paul, Rondo
SG: KCP, Caruso
SF: LeBron, THT
PF: Davis, Morris
CE: Howard, Boogie
Plus the $9.3M MLE to use for in order of preference:
Wood, Baynes, Harkness, Grant, Bertans, or Gallinari.
That’s a roster that could win two more championships.
Tom, you spend far too much time on these trades with no chance of happening. You should take up golf or something.
That’s funny, Stan, because I would have expected you as a business owner to fully understand how a profitable enterprise like the Lakers could take advantage of short term losses to save on taxes and make a discounted investment on a player like CP3 a smart move.
As a business owner, I know all too well that a deal with too many moving parts has little chance of going through.
Draft picks don’t count against salary cap, BTW. You’ll need more raw $$$’s to make the cap issue resolve. Picks are sweetners, nothing more.
I don’t like giving out that much controlled cost in return for a player that will be a Laker for 2 more seasons. Furthermore you;re conflating two very separate issues: the cap and profit are two completely different things. BRI does not calculate based off of team profits but league-wide revenue. It’s one of the long-standing issues between the NBA and the NBPA. So, yes, the Lakers could still profit as a business the team itself would suffer from such a high volume salary.
Basically, I don’t see this as a ‘win-now’ move but rather an abandonment of cap smarts. You’re commuting over $80 million in salary to 2 players (James and CP3) and we haven’t extended Davis, yet. That’s going to cap you out right there (the one and one we all agree he is likely to take will be for $34 million, there will be no pay cut) at $114 million. 3 players does not a team make. Let CP3 over-perform somewhere else and flame out in the early playoff rounds without him taking us with him say I.
Didn’t all those guys you’re trading off the team just win an NBA championship…I could have sworn they did…weird…lol.
Pincus covered the pick issue: you draft the player, sign him to a contract, and then trade him a month later.
This is the kind of trade LeBron might want and if he does, the Lakers will do it.
One change I would make in my argument is taking on CP3’s salary would make it impossible for the Lakers to bring back Rondo, KCP, Morris, and Howard AND still have the $9.6M MLE. They could bring everybody back with almost no limit but could not do hard cap, meaning only $5.6M taxpayer MLE. CP3 would be worth it if the Thunder were willing to trade him to Lakers.
Too old, too expensive, keep Rondo. Problem solved.
Still playing at All-Star level and is future HOFer.
Will be cheaper because of the pandemic and income tax savings and will only cost expiring contrats.
Will give us a great 1-2 point guard punch
And almost guarantees another one or two rings.
The players you’re shipping out have greater team value than a single Chris Paul. To equal his mammoth $41.3 million dollar deal you’ll have to trade 2/5ths of the roster. Green, Bradley, McGee, Caruso, Kuzma and likely KCP along with draft picks? For a guy who’s just going to take the ball out of LeBron’s hands? Who himself hasn’t been able to take a team even to a conference finals? AND he has an even more expensive player option the following year that he will certainly opt into? 100% pass.
Every time I pass on that deal. I thought we overpaid for him in the nixed CP3 for Odom and Gasol deal, this would be doubling down on the folly we lucked out on missing back then.
CP3 makes $41.3M, which means Lakers need to send out $33.1M.
$5.0M Bradley – Didn’t need him to win it all
$4.2M McGee – Didn’t need him to win it all
$3.0M Cook – Didn’t need him to win it all
$3.5M Kuzma
$15.3M Green
$2.1M #28 pick – Didn’t need him to win it all
————
33.1 TOTAL
Truth is we’re only giving up Kuzma and Green!
For a HOF point guard who is Rondo on Steroids.
And look at what you have left:
PG: Paul, Rondo
SG: KCP, Caruso
SF: LeBron, THT
PF: Davis, Morris
CE: Howard, Boogie
Plus the $9.3M MLE to use for in order of preference:
Wood, Baynes, Harkness, Grant, Bertans, or Gallinari.
That’s a roster that could win two more championships.
CP3 wasn’t needed to win it all, either. 😉
This means giving up on any younger superstar, you’re locked into an old team. You’re giving up any and all future cap flexibility and we can all but guarantee the cap will be lowered in 2021. The only way I would ever do this is we had a way to amnesty him. That’s it. I don’t need to watch 19.8 seconds of CP3 dribbling before dishing to LeBron on most possessions.
We don’t need ball-dominant players if we keep Rondo. We have LeBron. He will have the ball in his hands. This is not theory, this is fact. You’re basically advocating for a $41.3 million dollar spot up shooter/back up PG. Just not on board with this notion, there are players of close to equal impact for a fraction of the cost.
Now if we lose Rondo we can have a chat about this, but I feel like this trade will be there all season long. There will not be a long line to wait in to trade for CP3. I haven’t even gotten into the concerns about his injury history and age. We’re not talking someone bionic like LBJ but a guy who is often injured at crucial moments in a season.
Pass.
CP3 would start and Rondo would come off the bench. And CP3 would do all of the same great things Rondo did when playing with LeBron, allow LeBron to play off the ball, stretch the floor because he’s a much better 3-point shooter, create easy shots for other players, and play tough gritty man-to-man defense. Chris is a better playmaker, 3-point shooter, and defender than Rondo. And maybe less prone to injury
I do agree that trading for Chris would eliminate the opportunity to land a younger stud guard to go with AD, which is why trading for him is not my first option but my fallback option if we can’t land a deal for Oladipo or another elite young guard. I would prefer a trade for Oladipo, Turner, or Wood before CP3 but I think the odds of CP3 trade happening are much higher. I also think there’s a good chance an amnesty will be part of the new CBA.
Last time the Lakers “upgraded” from a winner to a HOFr was when Horry was replaced by Karl Malone. Didn’t go well. Horry continued winning rings while Karl gets injured in the Playoffs.
Imagine this nightmare: Rondo winning a ring with the Clippers while CP3 gets injured again in the POs.
There’s always a chance that could happen, Stan, but the other side is you get a steroids version of Rondo who’s just as good a playmaker and better defender and 3-point shooter.