The Lakers road back to championship contention depends on whether they chose to accept a hard cap by pursuing sign-and-trades for other team’s free agents or opt to pay luxury taxes by re-signing all of their own free agents.
There are advantages to being hardcapped, namely being able to sign-and-trade for other teams’ free agents and being able to use the full $9.5 million Mid-Level and the $3.7 million Bi-Annual Exceptions to sign free agents. But being hardcapped has consequences. The team’s total annual salaries cannot ever exceed $143 million, which greatly limits the trade and free agency opportunities the team can take advantage of during the season.
Declining to be hardcapped has advantages in that teams can go over the cap to re-sign their own free agents using various versions of Bird rights. That’s critical for the Lakers who have numerous free agents of their own. For big market teams like the Lakers with strong local revenues, going over the cap allows them more freedom to create deep and versatile rosters with the only penalty being a brutal luxury tax that could cost $25-$50 million.
So let’s take a look at the Lakers’ salary cap situation to see what roster building options they have should they decide to accept being hardcapped or commit to paying the luxury taxes and re-signing their own free agents.
1. The Los Angeles Lakers’ Options If Hardcapped.
Adding a third superstar like Kyle Lowry, whom the Lakers tried to trade for during the season, to go with LeBron James and Anthony Davis might be a sign-and-trade the Lakers might accept though it would hardcap them.
Let’s look at the Lakers’ salary cap numbers after the above proposed trade to see the impact of being hardcapped on their roster. Accepting Lowry in a sign-and-trade would hardcap the Lakers at $143 million for the season. The key is how much they have to pay for the third superstar. Paying Kyle Lowry $22.0 million per year for three years still allows the Lakers to keep everybody on their roster but Dennis Schroder and Montrezl Harrell.
After trading Kuzma and KCP for Lowry, the Lakers would have four players under contract — James, Davis, Lowry, and Gasol — for $101.2 total salary, leaving them with $41.8 million under the hard cap to build out the roster. That’s enough to cover $10.0 million to re-sign THT, $9.0 million of the full MLE, $5.0 million to for Caruso, $1.9 million for McKinnie, $1.6 million for the #22 pick, $5.0 million for Deng, and $9.3 million for 6 roster spots.
Signing-and-trading Kuzma and KCP for another team’s free agent earning less than $22 million per year would enable the Lakers to bring back their own free agents other than Schroder and Harrell and pay minimal taxes.
2. The Los Angeles Lakers’ Options If Not Hardcapped.
The Lakers might opt to avoid pursuing other teams’ free agents and being hardcapped and instead look to upgrade their roster by bringing back their own free agents and trading for players under contract with other teams.
Not being limited to total annual salaries under $143 million would allow the Lakers to go over the salary cap to trade for players under contract to other teams and to award deserved raises to re-sign their own free agents. The Lakers would have no limit to how far they go over the cap to re-sign key free agents of their own like Schroder, Horton-Tucker, and Caruso. The only penalty they would face would be an expensive luxury tax bill.
Here’s a breakdown of how the roster would look after the above proposed trade of Kyle Kuzma, Kentavious Caldwell-Pope, Montrezl Harrell, and Alfonzo McKinnie for the Hornets Terry Rozier and the Kings Buddy Hield. The Lakers total salaries for adding Rozier and Hield and bringing back everybody but Shroder or Harrell would be $157.0 million, which would cost $33.3 million in luxury taxes and a total payroll of $190.3 million
So letting Schroder and Harrell walk and focusing on trades for players under contract rather than sign-and-trades for free agents could also enable the Lakers to build a championship roster but would cost $50 million more.
The availablity of the ‘right’ player will determine whether the Lakers opt to go after other teams’ free agents and be hardcapped or re-sign their own free agents, trade for players under contract, and incur major luxury taxes.
The Lakers would be wise to eschew pursuing sign-and-trades for other teams’ free agents unless the player is a legitimate third superstar who earns less than $22 million per year to complement LeBron and AD. Otherwise, they would be smart to look to trade for high volume, high percentage 3-point shooting guards and bring back most of their own free agents even if it cost them $190 million rather than $143 million in salaries and taxes.
The competitive landscape of the league has changed dramatically since the Lakers won their Bubble Championship. The Lakers woud be smart to avoid chasing other teams’ free agents and becoming hardcapped at $143 million.
With all the talk of the Lakers possibly looking to sign-and-trade for various star free agents like Kyle Lowry or Chris Paul, I took a close look at what their salary cap situation would be if they signed-and-traded for Kyle Lowry vs. trading for Terry Rozier and Buddy Hield, who are not free agents and wouldn’t hard cap the team at $143 million for the season. The results are extrememly interesting.
First, the hard cap situation. If the Lakers were to give Lowry a 3-year contract starting at $22 million per year, they would be able to bring back THT and Caruso with raises to $10 and $5 million respectively, guarantee McKinnie’s $1.9 million, sign their first round draft pick, and have amost all of their $9.5 million MLE to sign lower priced free agents while remaining under $143 million. Luxury taxes would only be $42,000.
Were the Lakers to target a more expensive free agent like Chris Paul who makes $44 million, they would not be able to re-sign THT or Caruso, guarantee McKinnie, keep their first round pick, or use any of their MLE. They would basically have to fill out their roster with vet minimum deals and might only be able to afford 13 or 14 roster players.
The better solution by far would be to avoid sign-and-trades for other team’s free agents, bring back their key free agents, and trade for a new starting backcourt like Rozier and Hield. In that case, the Lakers would have a salary cap of $157 million and a luxury tax bill of $33 million for a grand total payroll of $190 million, almost $50 million higher than if they were hardcapped.
Would the Lakers be willing to pay $50 million more for a better and deeper roster? If we believe Jeanie Buss and the Lakers understand that LeBron’s championship window is rapidly shrinking, the answer has to be yes. It’s not as bad as the tax situation is for the Warriors or Nets but it will be a strong third on the list of teams paying luxury taxes but the Lakers are clearly in a win now mode so bring it on.
Been saying from the get-go we should avoid hard capping ourselves unless it is for an elite talent. Not many players fit that and/or will be available this summer. The best thing about re-signing most of our guys and not hard capping ourselves is that we can trade any of our players after the calendar year turns over. All contracts will be movable by mid to late December. I can’t see a scenario where being hard capped is an advantage.
Could come down to whether the Lakers would prefer to have Kyle Lowry as their third star and not pay any luxury taxes or have a duo like Terry Rozier and Buddy Hield and pay $50 million more in payroll and taxes. That’s the $50 million question… Like I’ve said many times, the hard cap can be a safety net for the Lakers ownership to hide behind so they don’t overspend like the Warriors and Nets. We’ll see.
I look at the 4 teams paying the luxury tax this season..GSW, Nets, Clippers, Bucks. All 4 are top contenders for the ring (GSW if Klay is healthy). It’s not overspending when it makes you better. I would hate to see Jeanie intentionally handicap us for a player like Kyle Lowry and also lose good, cost-friendly role players in the process. Uninformed Laker fans will probably give her a pass because the narrative will be “Hey, we spent all we could and reached the cap” but we know it isn’t the truth.
Yeah, I’ve pretty much came to the same conclusion. The S&T only works for Lowry because of a $22M salary. Anything bigger than that will result in not being able to bring back THT or Caruso or having room to use the MLE. Better to avoid being hard capped.
Lakers need to put money behind the talk and spend the $50 million to really upgrade the roster if they want to compete for the title next season. The Bubble Roster would not be good enough for the competition we’ll face next season.
Lowry is not worth HCing ourselves. I don’t think he is, anyhow.
There are better options out there so the real answer depends on what other teams do and who is actually available for the Lakers when the music stops. There are scenarios where trading for Lowry could be the Lakers best option. I hope we don’t have to resort to that and end up hardcapped but it depends on who’s available and at what price. Kyle Lowry would be a great addition to the Lakers much like Chris Paul was to the Suns in giving them a proven vet third star.
It’s really starting to feel like this vast Lakers warchest is at least overstated. Despite the big TV deal, there’s all this infighting among the siblings grinding things down in the background. They also don’t have the multi-billion empires outside the association. I think they don’t spend money on stuff sometimes because it doesn’t make sense to them.
Just hope they don’t go cheap on us rebuilding the roster this summer. LeBron’s window is closing. Now is the time to go all-in on winning #18.