Four Reasons Lakers Would Be Smart To Hard Cap Themselves Next Season

If you see Jeanie Buss wildly dancing and dropping dollars on TicToc like Ja Morant at Shotgun Willie’s, it’s because her L.A. Lakers have finally figured out how to compete for championships without having to pay luxury taxes.

If the Lakers are committed to bringing back and upgrading the core of last season’s conference finals team, the best roster building strategy to elevate the team to championship level could ironically be to hard cap themselves. Being hard capped at $169 million brings a set of advantages beyond paying zero luxury taxes. Hard capped teams can receive sign-and-trade players and have $16.6 million in exceptions to sign free agents under hard cap.

The Lakers’ ownership, front office, and coaching staffs should be proud of the team’s great finish last season and looking forward to even more this season. The Lakers still need a few roster tweaks to reach full potential.
They need to figure out what to do with D’Angelo Russell. Per Jovan Buha, the Lakers prefer to sign-and-trade him, wasive him, or re-sign him in that order. Fortunately, Pelinka did a great job giving the Lakers great options.

The Lakers also need to decide who will be the fifth starter to replace Vanderbilt. Will it be Hachimura? Or do the Lakers trade for a starting center like Turner? Both of those solutions leave LeBron defending the 3. Ideally, the best solution might be to find a legitimate 3&D small forward so James can play power forward. The only problem is every team in the league is looking for that same exact player, an O.G. Annuby clone.

Besides avoiding luxury taxes, here are four reasons why the Lakers hard capping themselves offers the most flexibility and would be the best roster building strategy to upgrade the team to championship level this summer.

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1. New CBA Favors Teams That Hard Cap

The NBA’s new CBA includes major changes designed to prevent teams like the Golden State Warriors and Los Angeles Clippers from willingly paying whatever crazy and exorbitant luxury taxes it takes to win a championship.

At the heart of the change is a second luxury tax threshold set at $17.5 million above the $162 million tax line or $179.5 million. Exceed that tax threshold and a team loses its MLE and has other severe limitations. Overall, the penalties are so draconian that $179.5 million will likely become the ‘de facto’ hard cap going forward. The effect will be to even the total salaries a team can pay and further even the competitive landscape.

NBA teams who exceed a second $179 million luxury tax threshold will incur harsh competitive penalties like not being able to use their MLE, take back more salary in a trades, or sign candidates from the buyout market. The league also reduced the Taxpayer MLE to $5 million, meaning a team with salaries over the luxury tax apron will only have $5 million available to sign free agents for whom they do not have either Bird or Early Bird rights.

Overall, the new CBA was targeted directly at the rich owners of the Golden State Warriors, Los Angeles Clippers, and Brooklyn Nets who treated luxury tax penalties as just another necessary cost to win an NBA championship. Look for those teams to lose free agents and trade players under contract to make sure they get under the $179.5 million second tax threshold. Expect the Lakers to be closely looking at those teams’ free agents and rosters.

By opting to hard cap themselves, the Lakers will be able to spend a total of $16.6 million via MLE and BAE instead of just $5 million to sign their own free agents without Bird or Early Bird rights or other team’s free agents.

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2. Hard Cap Lets Lakers Bring Back Core

Despite being hard capped, the Lakers could still bring back their 9 best players from last season’s conference finals team, including James, Davis, Christie, Vanderbilt, Russell, Reaves, Hachimura, Schroder, and Walker IV.

James, Davi, Vanderbilt, and Christie had contracts while Russell, Reaves, and Hachimura were re-signed using Bird rights. Schroder was signed with MLE and Walker with BAE. Lively and Livingston were 2023 draft picks. Three open roster spots for minimum salary players brings the Lakers’ active roster to 14-players, 9 of whom were part of the team that made the conference finals and finished as one of the best 4 teams in the league.

What we’re seeing is the Lakers can build a championship contending team while being hard capped provided they pursue a two-superstar and deep roster model rather than the three-superstars model had with Westbrook. The Lakers don’t need to pay luxury taxes to bring back the core of their conference finals team. They can still bring back the 9 best players from that roster while still remaining below the $169 million NBA hard cap.

Rob Pelinka deserves kudos for the job he did in making over this roster. Not only are they near championship caliber, They’re young with real upside and they can bring most of them back despite being hard capped.

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3. Hard Cap Gives Lakers $12.2 Million MLE

But the Lakers may not want to spend their $12.2 million MLE or their $4.4 million BAE on Dennis Schroder and Lonnie Walker IV. They could waive them both and instead use the exceptions to sign other team’s free agents.

We know the Bucks may have to dramatically reduce payroll due to the new CBA, which means that the Lakers might be able to convince free agent center Brook Lopez to accept the $12.2 million NT Mid Level Exception. Lopez might love the opportunity to play again for Ham rather than a new coach in Milwaukee and reuniting in Los Angeles with the Lakers where Disneyland is just a short drive away could be a very feasible move.

Top free agents whom the Lakers might pursue with their $12.2 million non-taxpayer MLE could include Brook Lopez, Bobby Portis, Bruce Brown, Naz Reid, Kyle Kuzma, Kelly Oubre, Dillon Brooks, and Alec Burks. Alternatively, the Lakers can split the $12.2 million MLE between two players and the $4.4 million BAE between two players to upgrade the roster so that the backups for each position were not minimum salary players.

Having $16.6 million rather than $5 million in exceptions to sign their own or other teams’ free agents is a huge advantage for a team like the Lakers who usually operate over the cap and just need one or two more players. Being able to offer an unrestricted free agent from your team or another team the $12.2 million non-taxpayer MLE versus the $5.0 million taxpayer MLE is one of the major advantages of a team hard capping themselves.

The Lakers should seriously consider offering their $12.2 million non-taxpayer MLE to an impact two-way player like Brook Lopez who’s exactly what they need since the path to the championship goes through Jokic.

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4. Hard Cap Lets Lakers S&T for 3rd Star

While being hard capped would limit the Lakers to a total payroll of $169 million, it would also give them the ability to pull off a sign-and-trade for Kyrie Irving to join superstars LeBron James and Anthony Davis in L.A.

LeBron James and the Lakers’ have long coveted superstar Kyrie Irving, who will be an unrestricted free agent this summer, although there were rumors that he already has a ‘handshake’ deal to re-sign with the Mavs.
But there is a scenario where Kyrie Irving decides he has a better chance of winning an NBA championship with LeBron James in LA than with Luka Doncic in Dallas and the two teams pull off a mega double sign-and-trade.

While unlikely, here’s how it could happen. The Lakers sign Russell to a 3-year $60 million deal, exercise Beasley’s team option, and trade the two to the Mavs for Kyrie Irving, who would sign a 3-year $112.5 million contract. Kyrie gets 3 years at $37.5 million to play with LeBron. The Lakers lose Russell and Beasley in trade and waive Bamba. They also no longer have space under hard cap to use MLE and BAE to re-sign Schroder and Walker.

Despite being hard capped, the Lakers could still sign-and-trade for Irving, assuming he would accept $35 million per year, and still be able to bring back James, Davis, Reaves, Hachimura, Christie, and their two draft picks.

Major changes in the CBA, ability to bring back their core, opportunity to offer free agents the $12 million NT MLE, and ability to sign-and-trade for a superstar are the four reasons why the Lakers should hard cap themselves.

Hard capping not only would eliminate any luxury tax for this season but also start the process of reversing their current status as a repeat offender, which has suddenly become much more urgent with the tougher new CBA. There’s no question Jeanie Buss and the Lakers were one of the teams in favor of the harsh new second luxury tax threshold. It should bring back sanity to team building that was undone by the Warriors and Clippers.

One of the most impressive parts of the masterful job Rob did setting the stage for the Lakers to take the next step in building a championship roster was the flexibility that the collection of players he signed gives the team. Rob has all his ducks in a row. Reaves and Hachimura are restricted free agents. Beasley, Bamba, and Vanderbilt have team options on non-guaranteed contracts. The team also has two tradable first round picks.

By hard capping, Rob has three exciting options available to him. He can bring back everybody from last year’s team including Dennis Schroder and Lonnie Walker by using the $12.2 million MLE and the $4.4 million BAE.
Or Rob can use those exceptions for other team’s free agents. The MLE might be enough to sign free agent center Brook Lopez. Or the Lakers can go all-in and try to pull off a mega double sign-and-trade for Kyrie Irving.

Bottom line, the Lakers would be smart to hard cap themselves this season so they can take advantage of the new CBA rules and either bring back last season’ team, upgrade it with a star player, or trade for a third superstar.