Trading D’Angelo Russell and Timofey Mozgov to the Nets for Brook Lopez confirms that Magic and Pelinka see maximizing and using cap space as their priority for building out the long term roster. I believe the Russell trade was a serious mistake for several reasons, but won’t litigate the issue here, and will instead focus on analyzing how the deal fundamentally reworks the team’s salary cap picture as we head into free agency and the future.
Magic and Pelinka’s comments in connection with the trade made clear that the team’s plan is to hoard 2018 cap space to add two max level stars, with one presumably being Paul George (whether by trade this summer or free agency next). I will lay out below the team’s current and future cap situation, and how various contingencies could impact their ability to sign free agents in subsequent offseasons.
First, below is the cap picture for next year as things currently stand. I assume the team will not pick up Black’s team option given the glut of big men (even though he’s a good value at $6.7M for one year), but will keep Nwaba given the need for backcourt help, and Bryant given his upside. This leaves around $19M in cap room:
(team option; assumed not kept)
|Kuzma (17 #27)||$1.2|
|Hart (17 #30)||$1.2|
|Bryant (17 #42)||$1.1|
The current depth chart is very big heavy:
SG: Clarkson, Hart, Nwaba
SF: Ingram, Brewer
PF: Randle, Nance, Deng, Kuzma
C: Lopez, Zubac, Bryant
I would not be surprised to see additional moves this summer, ranging from trading for Paul George, to dealing a spare PF for needed guard help. In terms of how to spend the $19M, Pelinka stated the team would treat its 2018 cap room as “sacred,” which means looking at one year deals, likely for a backup PG (who can play next to Lonzo when he slides to SG), and another wing.
For more detail on how this free agent market should shape up in terms of contract amounts, I refer back to my piece from two months ago. In short, there is far less total capital in the market this year than last year (I projected about $475M this year vs. $972M last year), and the capital (dollars to spend) to salary cap ratio should be right on par with 2014 and 2015. This means that free agent contracts should be equivalent to those 2014/2015 amounts, as opposed to the absurd 2016 amounts, when looking at contracts as a percentage of the cap. Fringe stars will get 20-25% of cap, starter level free agents will get 15-20%, solid rotation players 8-12%, and so on.
THE IMPACT OF THE TRADE – BEFORE AND AFTER
Putting aside the merits of the trade, the Lakers opened up significantly more future cap room by moving off Mozgov and Russell. To illustrate, I list below a before and after snapshot of the team’s cap picture for 2018-19 and 2019-20. The cap situation for next year did not materially change (Lopez and Mozgov + Russell each make about $22M).
|Before Trade||After Trade|
|Kuzma (17 #27)||—||—||$1.4||$1.6|
|Hart (17 #30)||$1.4||$1.6||$1.4||$1.6|
|Bryant (17 #42)||$1.1||$1.3||$1.1||$1.3|
Note that I have assumed a $101M cap for 2018 and $105M for 2019. Both figures are lower than reported estimates, but the cap numbers should come down some in conjunction with this year’s cap lowering to $99M. I have also assumed that Lopez, Black, Brewer, and Nwaba do not re-sign past next season. I have also not take into account roster holds of approximately $0.8M until 12 spots are filled, or second round picks (the Lakers have Denver’s in 2018 and Chicago’s in 2019).
As you can see, the trade results in serious cap savings for the next few years:
- For 2018: $21.7M in additional cap room.
- Losing Mozgov’s $16.0M and Russell’s $7.1M, and adding Kuzma’s $1.4M.
- For 2019: $36.4M in additional cap room.
- Losing Mozgov’s $16.7M and Russell’s cap hold of $21.3M, and adding Kuzma’s $1.6M.
- For 2020 (not shown): $39.8M in additional cap room.
- Losing Mozgov’s $16.7M and Russell’s $25M (estimated extension), and adding Kuzma’s approximate $1.9M.
The Lakers, of course, could have stretched Mozgov instead of trading him. If they had waited to stretch him in the 2018 offseason, he would have been on the books for $6.5M per season for 5 years, saving $9.5M in 2018 and $10.2M in 2019, but adding $6.5M the following 3 seasons. For 2018, the Lakers saved $12.2M through the trade beyond what they would have saved by only stretching Mozgov; for 2019, they saved an additional $26.2M.
So what can the Lakers make happen with this cap room going forward? Can they execute Magic and Pelinka’s stated plan to sign two max free agents next summer? The short answer is yes, there are reasonably possible paths to obtaining the cap room for two max free agents, but it will take a little work.
As shown above, the team currently projects to have around $38.5M in cap room following the Russell/Mozgov trade. Free agents with less than 7 years in the league can receive up to 25% of the cap (designated veterans up to 30%), 7-9 years up to 30% (designated veterans up to 35%), and 10+ years up to 35%.
With the 2018 cap likely around $101M, give or take, star free agents like Paul George, Demarcus Cousins, Russell Westbrook, Isaiah Thomas, and Deandre Jordan can sign max contracts beginning at $30M or $35M per season, depending on whether they qualify for the 35% rate (Westbrook would certainly qualify).
The Lakers thus need to get to $60-65M in cap room to make room for George and one additional max free agent next year. Trading for George and obtaining his Bird rights only minimally helps, as his cap hold would be $29.3M for 2018, saving about $1M.
I see three options for making sufficient room to add George and a second max player.
First, the team could trade away salary in a deal for George, thus moving off long term money. For example, if the team traded away Clarkson, Randle, and a recent young pick or two, they would have around $35M in cap space left for FA signings.
Second, if the team stretched Deng next summer, his cap hit would lower to $7.4M, saving $10.6M. If the team also traded Clarkson or Randle (who has a $12.3M cap hold if they wait on his extension), they would be at around $58M in cap room, putting them in striking distance. If the cap came in a little higher they would have enough for two 30% FAs, or they could move a small contract or two from Nance, Zubac, and the recent picks.
Third, the team could try to trade Deng next summer, when he has only two years left on his deal, by attaching attractive players/assets – some combination of Randle, Zubac, and the recent picks. It would be complicated to trade Randle next summer as his extension is kicking in, but assume they signed + traded Randle for picks, moved a pick and Zubac to unload Deng, and traded Clarkson into someone’s cap space (so in the net, the Lakers would be losing Randle, Clarkson, Deng, and Zubac, and gaining picks). This would result in around $75M in cap room, enough to sign George, another max free agent, and another solid rotation player. I wouldn’t ever move off this many impact young players, especially Randle, just for cap space, but something like this may be possible if the team has free agents in hand that would be worth the sacrifice.
If Magic and Pelinka can’t work out a deal for George this summer, I think the second option is something we can count on. The team can stretch Deng and find a way to move Clarkson’s contract (which will have two years left at that point), even if they have to attach a small asset to do so. We can thus safely plan that the team will have enough room to sign George and another max free agent.
Would this have been possible without sacrificing Russell? Yes, I think so, but it’s not certain and would have required extensive cap machinations at the same time they were trying to recruit and sign star free agents. They would have had to move one of Mozgov or Deng next summer without trading Russell/Lonzo/Ingram, stretch the other, find a home for Clarkson, etc., etc., but I think they could have ultimately made it happen. And even if they couldn’t, I still would have preferred to keep Russell for several reasons, but, again, I won’t relitigate the deal here…
But what’s done is done, and we can now turn our focus to the era of Lonzo, Vegas and our absurd summer league roster, preparing ourselves for Paul George goodness (he’s truly an amazing basketball player), Ingram transforming from baby foal to league destroyer, ZUBAC and Zubac-twitter-stans, seeing our new rookies do things, Nance murdering people, Randle raining 3s, etc, etc. There’s much to be excited about, even following the Russell fiasco, and seeing Magic and Pelinka execute their ambitious plans will certainly be worth our time…