According to Zack Rosenblatt of NJ.com, "the Sixers are doing everything they can to clear enough cap space to sign him outright to a max contract."
Getting to max money for James (around $35 million) will require some clever bookkeeping from the Sixers. According to Spotrac.com, the team currently has $30.5 million in practical cap space, which is the money they'll have free once they renounce the rights to free agents J.J. Redick, Amir Johnson, Marco Belinelli and Ersan Ilyasova.
Given that rookies Zhaire Smith and Landry Shamet will sign for around a combined total of $4.1 million, however, that number will drop to around $26 million.
The most feasible way for the Sixers to clear the requisite cap space would be a salary-dump trade of Jerryd Bayless, who is due to make $8.5 million next year. But if the Sixers can't move off his money via a trade, they could use the stretch provision—which allows teams to waive a player and stretch his salary over twice the remaining years of his contract plus one additional season—to pay Bayless over three years, rather than one.
That would cut his 2018-19 salary to $2.8 million, saving the team $5.7 million. The team could also cut ties with Richaun Holmes and his non-guaranteed $1.6 million. Trading Justin Anderson and his $2.5 million is also a possibility, and he likely would receive more interest around the league than Bayless.
If the Sixers are able to trade Bayless and cut Holmes, they should get the requisite money needed to sign James to his max deal. Otherwise, using the stretch provision on Bayless and parting with Holmes and Anderson would clear $9.8 million, which should also do the trick.
So, the Sixers are either going to have to get creative, or hope that James will be willing to settle for less than a max deal.