There’s a reason why more than half of the teams in the NBA opted to be hardcapped this past season. While hardcapping limits what a team can spend on salaries for the season, it also gives teams other advantages.
The first advantage is hardcapped teams can sign-and-trade for other teams’ free agents. For teams like the LA Lakers who don’t have cap space, sign-and-trades are the only way they can acquire a high priced free agent. The Lakers’ priority this summer is to find a ‘difference-making playmaker.’ Since the top point guards this summer will be free agents, the Lakers may have to accept being hardcapped to land the elite playmaker they covet.
The second advantage is hardcapped teams get the full $9.5 million MLE to sign one or more free agents from other teams. The full MLE gives the Lakers a huge competitive advantage versus teams that are not hardcapped. Non-hardcapped teams only get the $5.9 million taxpayer MLE or the $4.9 million room MLE so the Lakers would be able to offer the best MLE candidates a greater annual salary than non-hardcapped teams can offer.
Landing an elite veteran point guard via sign-and-trade and a deadeye 3-point shooting guard or small forward via the full MLE could give the Lakers two starters superior to any players available if not hardcapped.
What makes being hardcapped a smart strategy for teams without cap space is the access to star free agent players. Sign-and-trades and the full MLE are powerful tools to accelerate building a caliber championship team.
The Lakers’ top sign-and-trade point guard target is Kyle Lowry, whom they tried to trade for at the deadline. Lonzo Ball, Chris Paul, Devonte Graham, Spencer Dinwiddie, and Derrick Rose are also sign-and-trade candidates. The Lakers’ top point guard trade target is Malcolm Brogdon, whom the Pacers have now put on the trade block. Russell Westbrook, Kemba Walker, Collin Sexton, and Terry Rozier are other point guards available via trade.
The Lakers’ top shooting guard candidate for the MLE is the Hornets’ Malik Monk, an unrestricted free agent sharpshooter. Other shooting guards for the MLE are Victor Oladipo, Alex Burks, Terrence Davis, and J.J. Redick. The Lakers’ top small forward target for the MLE is the Pelicans’ Josh Hart. Will Barton, Josh Hart, Furkan Korkmaz, Kelly Oubre, Kent Bazemore, Otto Porter, Jr., and Reggie Bullock are other small foward MLE candidates.
Being hardcapped would be worth it if the Lakers could sign-and-trade for Kyle Lowry and then sign a second quality starter like Malik Monk or Josh Hart with the full MLE. The #22 pick also becomes valuable if hardcapped.
There are severe limits to what a team can do if hardcapped. A sign-and-trade for Kyle Lowry or any free agent cannot exceed $25 million per year or the Lakers might not be able to re-sign Caruso and Horton-Tucker.
There’s a misconception teams can build better, deeper rosters by paying luxury taxes rather than being hardcapped. The reality is luxury taxes are structured so that progressive penalties rapidly limit what teams can do. Should the Lakers traded for Russell Westbrook, the annual salaries of LeBron, AD, Russ, Gasol, eight players for the vet minimum, and Deng’s $5 million waive-and-stretch total $142.0 million or close to the tax apron.
The luxury tax bill for using the taxpayer $5.9 million MLE to add a 13th player would be expensive. The total luxury taxes would cost the Lakers $12.5 million, bringing the annual pay for that player to $18.4 million. From there, the taxes become even more exorbitant. Adding 14th and 15th players who earn just the veteran minimum salary of $1.7 million would cost the Lakers another $15 million in taxes to completely fill out the roster.
The bottom line is there are advantages and disadvantages for teams willing to be hardcapped or pay luxury taxes. Which route a team chooses will depend on the specific roster needs and financial landscape of the team.
To hard cap or not to hard cap? While the concensus of most Lakers fans is not to hard cap, the decision whether or not to hard cap is not a slam dunk either way. It depends on whether the players you need are available via trade or only via free agency. For teams like the Lakers, who don’t have cap space, access to elite free agents can often swing the pendulum in favor of hard capping just to get access to the Kyle Lowrys and Lonzo Balls.
If the Lakers can work out a sign-and-trade for Kyle Lowry, that would be my top priority even though it would hard cap us. Besides getting the best ‘affordable’ point guard prospect, we would also be able to offer the full $9.5M MLE. In other words, accepting being hard capped could result in the Lakers landing two better players than if they went the luxury tax route.
What will the Lakers do? It will depend on who really becomes available. If they can get Lowry, then hard cap. If they can’t, then maybe go after Lonzo or try to work out a straight trade with the Pacers for Brogdon. While there are challenges, there are also multiple pathways and players for the Lakers to pursue this summer whether they choose to be hard capped or not.
Kelly Oubre. Anyone? By the way, Tom, great analysis. Making it easier for me to understand the nuances of the trade jigsaw puzzle.
Thanks, Buba. It may not be rocket science but it definitely has its own set of complications. And I would love to be able to sign Oubre for the full MLE.
Can’t see a way hard capping us helps us. Feud with Kuzma and all I’d rather keep Schroeder and look to trade him. mid-season. The only hard cap scenario I feel like I can get behind is one where Caruso and THT take deals elsewhere the Lakers don’t want to match. Since the benefit of retaining our free agents is that we can push into tax territory if that path closes to us. Then we would almost have to be open to the idea of using the Schroeder/Harrell S&T to restock the pond, as it were.
LOL. You need to open your eyes. There are good reasons NOT to hardcap but there are also good reasons TO hardcap, including having access to more and better players and getting the full MLE.
Whether the Lakers hardcap or not will depend on availability of players. If they can S&T for Lowry, then they would gladlyi accept the hard cap and use the full MLE to sign a second star like DeRozan or Tucker. If they can’t get Lowry, chances are they will go after Russ in a trade and accept heavy luxury taxes.
It’s about who the Lakers can get more than whether or not it’s better to hard cap or pay luxury taxes.
I could see a scenario where we kept Dennis and traded him at the deadline but only if we couldn’t move him in a S&T. That’s a scenario we don’t want to happen because it means we couldn’t find the playmaker we wanted and are just kicking the can down the road.