The days where the Lakers could vastly rely on their poker chips to build championship contending teams will become a distant memory this offseason.
The Lakers can offer Dwight Howard the most money of any NBA team, a five-year deal worth $118 million as opposed to a four-year deal worth $87.6 million for everyone else. But that may not convince Howard he would look best in purple and gold once he becomes an unrestricted free agent today at 9 p.m.
The Lakers have a 25-year, $5 billion deal with Time Warner Cable that paid the team around $120 million in the first year, a partnership Lakers president Jeanie Buss said "exceeded beyond our wildest expectations." That lucrative contract, however, won't convince the Lakers to go on a shopping spree this offseason for reasons beyond giving the NBA about $50 million of those earnings in revenue sharing.
More punitive luxury taxes for high-spending teams will kick in during the 2014 offseason when a crop of superstars such as LeBron James, Carmelo Anthony, Paul George and John Wall enter the free-agent market. That's why the Lakers have echoed the need to keep "financial flexibility." "There are teams that have tried to buy championships, but it doesn't work that way," Buss said recently at a Time Warner Cable Media sponsored event.
"It's not always about the team with the highest payroll."
The Lakers discovered this past season that money doesn't always buy happiness. They shelled out nearly $100 million in player salaries and $29.6 million in luxury taxes after acquiring Howard from Orlando, Steve Nash from Phoenix and keeping Kobe Bryant, Pau Gasol and Metta World Peace.
A swift coaching change from Mike Brown to Mike D'Antoni, overlapping injuries and competing coach and player agendas contributed to the Lakers losing in a first-round playoff sweep to the San Antonio Spurs. If the Lakers maintained a similar payroll next season, they would owe about $78.2 million in additional taxes. For the 2014-15 season, that figure would climb to $85 million because of the so-called "repeater tax."
What happens if Howard ignores the billboards the Lakers put up around Los Angeles pleading him to stay?
"Whether Dwight's here or he's not, what we can do to improve the team remains the same," Lakers general manager Mitch Kupchak said. "It's not like if one player is not here, we have more resources in having that money to sign another player."
Should Howard walk away without the
$20.5 million the Lakers would owe him next season, they still would approach a $79.6 million payroll. Larry Coon, an independent NBA salary cap expert who works as an IT director at UC Irvine, estimated the league will set this year's tax threshold at around $71.5 million.
Any team that spends above that apron can't land any free agent via sign-and-trade, giving the Lakers no shot to grab Chris Paul, Monta Ellis, Josh Smith or Andre Iguodala. Such high-spending teams next season can't acquire players under contract through a sign-and-trade. Luxury-tax penalty teams also will have a smaller mid-level exception in both years (three instead of four) and salary ($3 million instead of $5 million).
"The worst position you can be in this league is to have multi-year contracts that are big numbers on players who are just OK players," Kupchak said. "It insures you're in the middle of the pack and have no way to move up."
The Lakers vow not to fall into that trap.
Only Nash remains under contract beyond next season for $9.7 million. Even if Howard returns and Bryant plays beyond next season, the Lakers would have enough cap space in 2014 to sign a max-contract player.
On Saturday, the Lakers waived backup guard Chris Duhon, who will receive only $1.5 million of the $3.75 million he would have earned this season.
The Lakers also can use the amnesty provision sometime between July 10-16 to waive either Bryant, Gasol, World Peace or Steve Blake. Pencil Bryant out even if Coon estimated the Lakers would save $55 million in luxury taxes and fall under the apron. The Lakers would experience a public relations nightmare. They also estimate Bryant will return from a left torn Achilles tendon sometime next season.
The amount the Lakers would save in luxury taxes by waiving Gasol ($40 million), World Peace ($30 million) or Blake ($15 million) still wouldn't bring them under the luxury tax threshold. Even if the Lakers use this tool, they can only sign a player at the mini mid-level exception at $3.2 million or at the veteran's minimum at $1.4 million.
"If it's a younger player, he's probably not going to take the veteran's minimum," Kupchak said. "If he does, he's probably not good enough to play.
"As much as I'd like to sit here and say we're going to get young, athletic players that can really shoot the ball at the veteran's minimum when they're 20to 25 years old, that's probably not realistic."
Indeed, the Lakers will encounter plenty of spending restrictions this offseason. They also face uncertainty without the late owner Jerry Buss.
The Lakers still maintain they will find a way.
"As much as they try to make things more fair, they can never take away what the Lakers have with our history, experience and our brainpower in our front office," Jeanie Buss said. "We'll always have an advantage."