LeBron James agreed to a two-year, $97.1 million extension with the Los Angeles Lakers on Wednesday, according to ESPN's Adrian Wojnarowski, which gives them the clarity they need to move forward.
Whether that future includes Russell Westbrook for the upcoming 2022-23 season remains to be seen. But James will now be under contract through at least 2023-24, which could open the door for the Lakers to make major changes to their roster.
How Much Money?
A veteran like James typically can extend for 20 percent more than his previous salary ($44.5 million), which would come out to $53.4 million. However, that's well over the projected maximum salary for the 2023-24 season ($46.6 million).
Instead, James will be limited to $46.7 million (a 5 percent raise over his 2022-23 salary), though the exact figure won't be determined until the 2023-24 salary cap is set next June. James could earn as much as $47.6 million if the cap climbs higher than the current $133 million projection.
James also has a player option worth nearly $51 million for 2024-25 that perfectly aligns with Anthony Davis' $43.2 million early termination option.
With no one else currently under contract for that season, the Lakers might prioritize keeping their books clean for July 2024 in case both James and Davis depart. They could also go all-in on a three-year run in the hope that James and Davis finish out their respective deals.
The Lakers could then target starting over clean in 2025, when the NBA's next national television deal might reshape the league's economy.
Potential Cap Room in 2023
The Lakers have been fiercely protective of their financial flexibility while waiting for James to sign his extension. Lonnie Walker IV, their most significant offseason acquisition, is on a one-year, $6.5 million deal. They signed only second-round pick Max Christie ($1.7 million) and veteran Damian Jones ($2.6 million player option) through the 2023-24 campaign.
The Lakers could get up to $20.1 million in cap space next summer if the cap does land at $133 million and Talen Horton-Tucker picks up his $11 million player option for the 2023-24 season. That figure could jump to $31.5 million if both Horton-Tucker and Jones opt out.
If the Lakers do go the cap-space route, they'll also have the $5.8 million room mid-level exception. If they elect to stay over the cap by re-signing players such as Austin Reaves, Stanley Johnson, Kendrick Nunn, Thomas Bryant or Juan Toscano-Anderson, they would have access to the non-taxpayer mid-level ($11.3 million) and bi-annual ($4.4 million) exceptions as long as they stay below the $168 million luxury-tax apron.
Maximum salaries next summer are projected to range from $33.3 million to $46.6 million.
Prioritizing cap space would also make the Lakers unlikely to take on additional salary via trade, which could limit their options with regard to moving Westbrook.
What's Next for Westbrook?
Per several sources connected to teams like the Brooklyn Nets, Indiana Pacers and San Antonio Spurs, the Lakers have not been willing to part with significant draft capital to get off Westbrook's contract. But that may have been tied to uncertainty surrounding James' future, which is now put to rest.
The sense from those sources: Westbrook will have a new home when the Lakers green-light trades that include both their 2027 and 2029 first-rounders. What's still unclear is whether L.A. will be willing to do so.
If the Lakers decide to go all-in on building a contender around James and Davis for the next few seasons, holding out for the uncertainty of cap space in 2023 wouldn't be pragmatic. Instead, they should seek a team looking to get out of multiyear commitments for Westbrook and draft compensation.
After trading All-Star center Rudy Gobert, the Utah Jazz appear to be heading into a rebuild. They might be open to taking on picks and Westbrook's salary for players like Mike Conley (partially guaranteed for 2023-24), Malik Beasley (team option), Jordan Clarkson (player option) and Rudy Gay (player option). Patrick Beverley and Bojan Bogdanovic, who are in the final years of their respective deals, could be especially appealing to the Lakers.
The Spurs have enough cap space to make an unbalanced trade for Westbrook, but they might want the Lakers to take on Doug McDermott's $13.8 million salary for 2023-24. Josh Richardson, who's on a $12.2 million expiring contract, could also be available.
The Lakers have explored runs at Nets point guard Kyrie Irving ($36.9 million expiring contract), but it's unclear if Brooklyn would want to include Joe Harris' $19.9 million salary for 2023-24 as well. The Pacers have Buddy Hield, a former client of Lakers executive Rob Pelinka, at $18.6-23.3 million for next season (depending on incentives). Los Angeles has also explored a deal for Pacers center Myles Turner with the expectation that he would extend or re-sign beyond his current $17.5-20 million salary for 2022-23.
It's unclear if the Lakers would be willing to take on players who are under contract beyond 2024-25, like Julius Randle of the New York Knicks or Terry Rozier of the Charlotte Hornets.
James' decision about whether to pick up his player option in 2024-25 could depend on his son, Bronny James, who projects to be draft-eligible in 2024.
The Lakers owe a first-round pick that year to the New Orleans Pelicans, though New Orleans can defer the selection to 2025. They also won't have their second-rounder.
L.A. does have the higher second-round pick between the Washington Wizards and Memphis Grizzlies, but will that be high enough to land Bronny should he decide to declare?
If the Lakers hope to keep James beyond 2023-24, finding a way to get Bronny in the draft could be the key.