A champion team is usually expensive. In 2019, the Toronto Raptors paid $ 25 million in luxury taxes. In 2018, the Golden State Warriors paid out $ 32 million. When the Cleveland Cavaliers won it all in 2016, their bill was $ 54 million.
But the Los Angeles Lakers did a somewhat rare feat last season: they won the NBA title without paying the luxury tax.
And that’s a good thing, because it could be very expensive to turn the LeBron James and Anthony Davis pair into something of a dynasty. How expensive? The Los Angeles luxury and payroll tax bill could reach $ 250 million just for next season.
Future free agent Dennis Schroder was eligible to sign a contract extension on Feb. 16. And given the impact he’s had as a player in relieving pressure on James, the Lakers are incentivized to keep Schroder, a guard they can’t replace through a free agency.
Schroder turned down an offer from the Lakers in the preseason, and the two sides are now expected to fight again, sources told ESPN’s Adrian Wojnarowski in December. But when they get into those talks, the Lakers need to keep an eye on the books because the numbers can eventually force tough decisions.
Last season, new contracts for Davis and Kentavious Caldwell-Pope and the signing of Montrezl Harrell saw the Lakers go into the luxury tax for the first time since the 2013-2014 campaign. Next year, extensions will be signed by James and Kyle Kuzma.
Meanwhile, most of the team’s role players – Harrell, Alex Caruso, Markieff Morris, Talen Horton-Tucker and Wesley Matthews – can be free agents. The Lakers also owe Luol Deng $ 5 million for next season.
The free agent market in 2021 has been stripped of many of the biggest names as Giannis Antetokounmpo, Paul George, Rudy Gobert and James chose to sign renewals to stay with their current teams. But there could still be 10 teams with $ 20 million or more in the making and a handful with more than $ 10 million.
– Los Angeles Lakers (@Lakers) February 28, 2021
That means the Lakers can have competition to keep their role players. If an athletic guard can defend them, the unrestricted free agent Caruso will have suitors. League executives think it could spark interest in all of the mid-tier exceptions, which hit $ 9.5 million next season. (Caruso is currently making $ 2.7 million.)
Horton-Tucker is another player who could have an intriguing free desk next summer. He averages only 6.7 points and 2.5 assists, but the teams look at him with interest.
The second-year attacker will be a limited free agent, limiting the types of offers he can receive and giving the Lakers the ability to equalize, but that doesn’t mean it’s easy to do it.
“He’s a talented defender with a great height and a great lead who is only 20 years old. In this market, that’s exactly the type of player you want to pursue,” said an Eastern Conference executive. “There may be some teams who put them to the test and give (Horton-Tucker) a quote sheet thinking they could get him out.”
Horton-Tucker’s salary for next season can’t exceed the full mid-tier exception, which is that $ 9.5 million figure. But rival teams have the option to cancel a deal, also known as a poison pill contract, to make it difficult for teams to match. Players like Jeremy Lin and Tyler Johnson have been involved in such deals in the past.
In this case, a team looking to maximize pressure on the Lakers could offer Horton-Tucker a four-year and $ 60 million deal, with the last two years running at $ 19.7 million and $ 20.7 million, respectively.
Then there’s Harrell, who can choose to cancel his contract and receive a payment of up to $ 11.5 million from the Lakers if they choose to re-sign him. With Marc Gasol at the end of his career and with few ways to replace Harrell’s production in free agency, retaining Harrell could also be a priority.
That brings back the decision now on the desk of Lakers general manager Rob Pelinka: what to do with Schroder.
Last off-season, combined entry-level guards such as Schroder did well in the free duty. Bogdan Bogdanovic was awarded a four-year $ 72 million deal from the Atlanta Hawks. Fred VanVleet received four years and $ 85 million from the Raptors. Two years ago, the San Antonio Spurs guaranteed Dejounte Murray a four-year contract worth $ 64 million, which could be the low point of a Schroder deal.
Keeping Caruso, Horton-Tucker, Schroder, and Harrell at their potential market value could push the Lakers’ payroll to $ 150 million. (Gasol’s $ 2.7 million salary is already guaranteed.) That’s without completing the roster with other veterans or keeping Morris or Matthews.
With that done, even with just a minimum wage, the Lakers could start looking for a base salary of about $ 170 million to keep the team intact. Add more than $ 100 million in luxury taxes and your pledges for next season would bring in between $ 250 million and $ 270 million.
The Lakers are an organization with a lot of money. They have the largest local television contract in the league, which pays $ 200 million annually. Expenses were not a problem in the past. Since the luxury tax began in the 2002-2003 season, the Buss family has given a total of more than $ 120 million green light for exceeding the salary ceiling.
However, these numbers set a new threshold that will also stem from a two-year loss from the COVID-19 pandemic.
No one should feel bad; the Lakers are one of the richest and most valuable franchises in the world. His two future Hall of Famers are stuck in deals.
But as the Lakers enter a period where they have to make contract decisions over most of their team, a tough decision could come.
Bobby Marks contributed to this note.