This is not what the defending champions envisioned.
Even after the shortest offseason in NBA history and key injuries to LeBron James and Anthony Davis that deflated the team’s regular-season record, the Los Angeles Lakers had expectations of a deep playoff run. Despite being the 7-seed, they were the betting favorites to emerge from the Western Conference and reach a second consecutive NBA Finals.
Instead, they’re going home after a first-round defeat at the hands of the Phoenix Suns.
With James and Davis already locked up and likely looking to rebound next season, the attention for Rob Pelinka & Co. turns to retooling a roster that has multiple players headed to free agency this summer, including Dennis Schroder, Alex Caruso and Andre Drummond.
The free-agent pecking order
There is yellow caution tape around the Lakers roster this offseason.
Yes, their two franchise players, James and Davis, are under contract through at least the 2022-23 season (with Davis possibly through 2024-25).
That leaves them with limited options.
They can bring back a combination of their own free agents, including Schroder, Caruso and/or Talen Horton-Tucker, but pay a substantial luxury tax bill. This would also limit them to using the $5.9 million taxpayer midlevel exception, rather than the larger $9.5 million midlevel exception. The $91 million luxury tax bill would be the largest in league history and would see the Lakers commit a quarter of a billion dollars to their roster in 2021-22.
The Lakers could also let most of their free agents walk to cut costs, but doing so would leave them with just the $9.5 million midlevel and minimum exception to fill their roster needs.
In either situation, it is clear that Pelinka and his staff have work to do, starting with how they prioritize their own free agents.
Schroder is the Lakers’ top priority — and the costliest.
As Adrian Wojnarowski reported back in December, Schroder turned down a two-year $34 million extension. The new contract was the maximum Los Angeles could offer at the time because the guard had just been acquired in a trade.
Three months later, Schroder would again bet on himself, this time bypassing a four-year, $84 million extension, the maximum allowed during the regular season. The $18.7 million cap hit would have ranked 19th among all point guards in 2021-22, comparable to the salary of Toronto Raptors guard Fred VanVleet.
This is not to say that Schroder does not see his future in a Lakers uniform.
“I want to be a Laker for a long time,” Schroder said according to ESPN’s Dave McMenamin. “I just want it to be fair.”
Because Schroder is still under contract and can technically sign an extension up until Aug. 1, the two sides have an exclusive window to negotiate a new contract before free agency begins. Once that window passes, the Lakers could let the market dictate what Schroder’s next contract will look like. However, Schroder is not a restricted free agent, so they don’t have actual matching rights. Losing him to a team like New York or Chicago would leave a giant hole in the Lakers’ backcourt, which works to Schroder’s advantage.
If there is a disadvantage for Schroder, it is that he is part of a deep group of free-agent point guards that includes Mike Conley Jr., Spencer Dinwiddie, Kyle Lowry, Lonzo Ball and perhaps Chris Paul.
There is also the fact that if New York and Chicago go in a different direction, the pool of teams who both have cap space and need a point guard is limited.
The Spurs (Dejounte Murray and Derrick White), Hornets (LaMelo Ball and Terry Rozier), Mavericks (Luka Doncic and Jalen Brunson), Heat (have restricted free agent Kendrick Nunn), Raptors (could have acquired him at the deadline) and Thunder (been there and done that) are the teams that have more than the midlevel exception to offer Schroder.
According to ProFitX, a starting salary for Schroder projects at $19.9 million, slightly higher than what he’d get in the first year of an $84 million extension. A new contract would come out to $89 million over four years, but in addition to salary, it’s worth keeping an eye on the length of Schroder’s next deal.
Would the Lakers play hardball on years, knowing that they could retool the roster in 2023-24, when James is a free agent and only Davis and Kuzma are under contract?
Because this is a win-now team, it might not have a choice.
The 2019 second-round pick went from playing 38 games in the G League in his rookie season to averaging 20.1 minutes and 9.0 points off the bench this season. However, in the first-round series loss to Phoenix, Horton-Tucker was barely part of the rotation, playing a combined 13 minutes in Games 1 and 2, and not playing at all in Games 3 and 4.
The Lakers have early Bird rights on Horton-Tucker, who signed a two-year deal as a rookie in 2019. The Lakers weren’t permitted to sign him to a longer deal then because they had used their cap space on other free agents.
Because Horton-Tucker has early Bird rights, Los Angeles can offer a contract with a first-year salary of up to $11 million (105% of the average player salary). If he signs an early Bird deal, it would have to be for at least two years, not including any option years.
Where things could get interesting is that teams with cap space could backload a multiyear offer to Horton-Tucker, giving him a significant raise in Years 3 and 4.
One example of such a deal from a team that had $15 million in cap space would look like this:
- 2021-22: $9.53 million (nontax midlevel)
- 2022-23: $10.0 million
- 2023-24: $19.75 million
- 2024-25: $20.74 million
- Total: $60 million
- Average: $15 million (cap space available)
Los Angeles would have the right to match the offer sheet but would not be permitted to average out his contract because it is over the salary cap, setting up Horton-Tucker to be one of the highest-paid Lakers starting in 2023.
Although we pegged Schroder as the most important Laker free agent, Caruso is a close second.
The guard, who is the longest-tenured player on the roster, ranked No. 4 among all players in defensive rating (101.2) this season and is a big reason the Lakers ranked as the top defensive team in the league. Because he has been on the roster for more than three seasons, Caruso has full Bird rights, allowing the Lakers to sign him for up to 25% of the salary cap and a maximum of five seasons.
According to Windhorst, league executives believe that Caruso could draw interest from teams in the $9.5 million midlevel exception range. That salary falls in line with the $8 million average value that ProFitX has for Caruso in free agency.
When Drummond signed a prorated minimum contract after being bought out by the Cleveland Cavaliers, the thought was that the former All-Star would be a one-year rental. However, as Dave McMenamin recently said on the Lowe Post podcast, the Lakers view Drummond as more than that.
“They have been so committed to him being the ceremonial starter. And obviously he gets more than just ceremonial minutes. That seems to be something that is important to Drummond, which makes it important to the Lakers’ front office because they have signaled to everyone listening: ‘This isn’t just a half a season buyout market rental. Andre Drummond is part of the future moving forward with this franchise.'”
Because of their cap situation and Drummond having non-Bird rights, the most that Los Angeles can offer in free agency is likely the $5.9 million taxpayer midlevel exception. Creating a salary slot for more money will not be easy, if the Lakers even want to do that — Drummond didn’t play at all in their Game 6 loss to the Suns.
If the Lakers use more than the taxpayer midlevel exception to re-sign Drummond, that will once again trigger the $142 million hard cap. That means signing Drummond to the full $9.5 million midlevel could come at the cost of their own free agents including Schroder, Caruso and Horton-Tucker or perhaps the other players already under contract, including Caldwell-Pope or Kuzma.
It has been a roller-coaster ride of playing time for the four veterans.
Harrell went from Sixth Man of the Year with the Clippers to recording two DNPs and out of the rotation during the playoffs this year with the Lakers. Leading up to his July 31 opt-in date, Harrell and his representatives will canvass the league to see whether there is a landing spot with the same comparable money (or perhaps more) and a more defined role. Because he has a player option, he cannot be traded until he opts in to his contract.
Morris started 27 games this season but was out of the Lakers’ rotation in the playoffs before starting Game 5 in place of injured Davis. He has early Bird rights; the Lakers can sign him up to the average player salary ($11 million), but the contract has to be for a minimum of two seasons.
Matthews averaged a career low in minutes (19.5), field goal percentage (35.3%), 3-point percentage (33.5%), and points (4.8) in his first season with the Lakers. After signing a one-year, $3.6 million contract last November, Matthews has non-Bird rights, and the maximum the Lakers could sign him to is $4.3 million.
McLemore played in 21 games, averaging 17.5 minutes and 8.0 points, after the Lakers signed him in April. However, in the playoffs, McLemore had two DNPs and played only 30 seconds in the Game 6 loss.
If the four players leave, the Lakers will have a combination of their first-round pick, the $5.9 million tax midlevel and the veteran minimum to replace them.
The past two offseasons have shown that there are other avenues to acquire a player beyond cap space and retaining your own players. Since 2019, there have been 16 players who have changed teams on a sign-and-trade deal, including Christian Wood to Houston last offseason.
Although it is a valuable resource, teams acquiring a player this offseason in a sign-and-trade would trigger the $142 million hard cap, which means the Lakers would need some creativity — and a giant calculator — to make such a move.
For example, the Lakers could trade Kuzma, Caldwell-Pope, an unprotected first-round pick in 2027 and the right to swap firsts to San Antonio for a signed-and-traded DeMar DeRozan. Although such a trade works on paper, it is highly unlikely the Lakers could make that move and remain below the $142 million threshold while still retaining Schroder, Caruso, Horton-Tucker and perhaps Drummond.
Offseason cap breakdown
- Starting and backup point guard
- Bench depth at every position
Resources to build the roster
- The draft: first-round pick to keep or use in a trade
- Championship equity: LeBron and AD
- Exceptions: $5.9M tax midlevel
- Cash: $5.8 million to send or receive in a trade
Dates to watch
• Expect the Lakers to tender Horton-Tucker a one-year, $2.1 million qualifying offer by Aug. 1, making him a restricted free agent.
• Harrell has until July 31 to notify the Lakers if he is opting in to his $9.7 million contract for next season. If Harrell opts out, the maximum the Lakers could pay him in 2021-22 is a starting salary of $11 million.
• There is no trigger date this offseason on the $1.9 million non-guaranteed contract of Alfonzo McKinnie.
• The hard cap restriction ($1.5M below) still applies and will get lifted on the first day of free agency.
• The earliest first-round pick the Lakers can trade is in 2027. They can trade the rights to their 2021 first once the pick is made (similar to what occurred last year with Schroder).
• The poison pill restriction of Kuzma will get lifted on the first day of free agency.
• The $1.9 million McKinnie contract does not count as outgoing salary in a trade because it is non-guaranteed.
• The lone Laker on the roster who can have his contract extended is McKinnie.
The Lakers keep their first-round pick this season as a result of it not falling in the top seven. Although they owe the Pelicans an unprotected first in 2022, Los Angeles is allowed to trade the draft rights of its 2021 first the night of the draft or after the moratorium is lifted Aug. 3. This occurred last November when Los Angeles sent Jaden McDaniels, whom they had selected 28th overall, and Danny Green to Oklahoma City for Schroder. Beyond the first-round pick owed to New Orleans in 2022, the Lakers owe the Pelicans an unprotected first in 2024 or 2025 (New Orleans has the rights to defer). The Pelicans also have swap rights with the Lakers in 2023.
Here’s how ESPN’s Jonathan Givony and Mike Schmitz have the Lakers selecting in July:
No. 22 (own): Ayo Dosunmu | SG | Illinois
Pelinka has made three draft-related trades since taking over in 2019.
As part of the Davis trade, the Lakers sent New Orleans the draft rights to the No. 4 pick in the draft, De’Andre Hunter, who was then traded to Atlanta. In the same draft, the Lakers sent $2.2 million and their 2020 second-round pick to Orlando for the draft rights to Horton-Tucker.
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