LeBron James can officially sign an extension with the Los Angeles Lakers on Thursday. As usual, he holds all the cards.
A renewed commitment from James could give the Lakers the means to at least try and build a contender properly. But James' history with the Cleveland Cavaliers suggests he may prefer to take things one year at a time.
Most immediately, James' decision will impact how willing Los Angeles may be to make a Russell Westbrook trade. With long-term assurances from James, it's easier to give up future draft picks (perhaps in 2027 and/or 2029) or take on unwanted salary back in a Westbrook deal.
Without a long-term commitment, the Lakers would appear to be stuck with the current roster, left to significantly outperform expectations. FanDuel currently gives the Lakers the ninth-best title odds.
What if James Leaves?
If James decides to move on after this season, the franchise could have massive spending power heading into the 2023 offseason.
The Lakers could have nearly $77 million in cap space to chase a James replacement if the roster is pared down to just Anthony Davis and Max Christie. That potential flexibility is why the Lakers have hesitated to trade Westbrook for a significant multi-year salary coming back in return.
The exact cap space figure would depend on Talen Horton-Tucker and Damian Jones, who both have player options. Additionally, the NBA and National Basketball Players Association (NBPA) may hammer out a new collective bargaining agreement (CBA) ahead of the next season that could impact the salary cap.
The Extension Options
James can extend for up to two additional seasons at about $97.1 million, starting at approximately $47 million. That would take him through the 2024-25 season, which lines up with the end of Davis' current deal.
That commitment would give the Lakers the clarity to take on the salary or give up the draft considerations in the name of "winning now."
Instead, James may be more likely to take a one-plus-one extension, allowing him to opt out after the 2023-24 season. This may be the most likely decision, giving L.A. a sense of its future, but ultimately limits the front office's confidence in future investments surrounding James.
Assuming James gets a player option in a one-plus-one extension, that would ultimately be the equivalent to a single-year extension. It wouldn't give the team long-term security, but at least it would have a clear picture of its spending power in the summer of 2023.
If James is open to staying for less than a maximum salary, he is more likely to wait for free agency to see precisely how the team will benefit.
What if James Doesn't Extend, Re-Signs in 2023?
James may choose to retain leverage on how the Lakers use its resources. That's how James approached his second stint in Cleveland.
He could understandably wait for free agency to see if a new CBA raises his earning potential.
But keeping Los Angeles in limbo may be counterproductive.
If James chooses to re-sign in 2023 on a one-year deal, the Lakers would be in an even more helpless position, given that Davis can also opt out and depart in 2024. Uncertainty with one star is a problem. Uncertainty with two stars is a nightmare.
James can also sign for three years for roughly $151 million, starting at about $47 million. The Lakers could still reach about $31.5 million in cap space with James back at the max (less with Horton-Tucker, Jones and any potential keepers like Austin Reaves). That might be enough cap space to chase a free agent like Kyrie Irving instead of trading for him this offseason.
Another (albeit unlikely) path could be James signing for as low as $3.1 million on a one-year minimum deal in 2023.
That's a more extreme version of what James Harden appears to be doing in Philadelphia with the 76ers—taking less for a year to re-sign for more the following summer. But the Sixers are under investigation for potentially circumventing the rules with Harden—how that situation is resolved may determine how the Lakers proceed with James.
The Lakers would have up to $76 million to spend with James if he signs at the minimum, with the rights to re-sign him at the max the following season.
However, a more reasonable path would be a short-term pay cut that's enough to enable the Lakers to add a significant piece or two. That also assumes Los Angeles and James are on the same page, have mutual trust and the NBA doesn't try to intervene.
Ultimately...
A one-plus-one extension seems the most reasonable path forward, giving James two years of security, with the ability to leave sooner—and perhaps to join the team that drafts his son Bronny James, if not the Lakers.
Email Eric Pincus at eric.pincus@gmail.com and follow him on Twitter, @EricPincus.
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