The Lakers can use a loophole to create cap room for next summer

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When the Los Angeles Lakers traded away D’Angelo Russell this past summer, they made a clear statement about their future.

As part of that deal, they shed the final three years of veteran center Timofey Mozgov’s massive four-year, $64 million contract. Giving up Russell, the second overall pick in the 2015 NBA Draft, was simply what the team had to do to create cap room under the guidance of new president of basketball operations Magic Johnson.

Immediately after taking over his new role in the Lakers front office, Johnson made it crystal-clear that the franchise will become relevant once again in the near future.

“When you have this much cap space, we’re going to be major players next summer. The tide has turned. People want to play here again,” Johnson told Baxter Holmes of ESPN shortly after the Russell trade. “I wouldn’t have made that move if I didn’t think I could use that money.”

“Look at my face,” Johnson then told Holmes. “Do you see that smile? Do you see it? OK, then. I’ve always bet on myself, right? I’m fine where we are. I’m happy. I’m excited. Lakers fans should be excited. We’re back.”

2017 Las Vegas Summer League - Boston Celtics v Los Angeles Lakers

As a result of the deal, the Lakers received the expiring contract of Brook Lopez as well as the 27th pick in the 2017 NBA Draft, which they used on University of Utah’s Kyle Kuzma, who has already developed into a major piece of the team’s future.

Therefore, it appears as though the Lakers accomplished what they set out to do on that deal. But, they still have a major hurdle to overcome: Luol Deng’s four-year, $72 million contract that will be on the books. He’s in the second year of that deal and has been inactive for most of the season due to the team’s focus on giving their young core most of the minutes.

Johnson and general manager Rob Pelinka have made it clear that the team will try to sign two high-profile, maximum contract caliber stars in the 2018 free agency period.

Cleveland Cavaliers v New York Knicks

As Eric Pincus of Bleacher Report pointed out, the team will be left with $47.5 million in cap space once they renounce the rights to Julius Randle, Brook Lopez, Kentavious Caldwell-Pope, Corey Brewer and Andrew Bogut and waive Ivica Zubac, Thomas Bryant and Tyler Ennis.

That’s simply not enough to sign two max players, who will command somewhere between $60-65 million combined annually. The team will owe Deng $36.8 million over the next two seasons.

While a trade or two can certainly alter Los Angeles’ situation, especially if they find a team who is willing to take on Deng’s salary, but it appears as though they should plan on him being there for the length of his contract.

Los Angeles Lakers Media Day

There is a light at the end of the tunnel, though, in the form of a loophole in the NBA’s collective bargaining agreement. Per Pincus, as of July 7, Deng is eligible for a three-year extension.

You may be wondering why on Earth the Lakers would give Deng an extension (given the situation he and the team are in) but it actually makes sense due to the league’s stretch provision, which allows teams to waive players and then pay the remainder of their contracts over twice the length of the remaining years on the deal plus one additional season.

Therefore, since Deng is owed $36.8 million over the next two seasons, Los Angeles could stretch him out to $7.4 million over five years, which would open $9.8 million of additional cap space for next summer, resulting in just over $57 million overall. Although they’d come up short of the $60-65 million target, they could make a few other minor moves in order to create the additional space.

New York Knicks v Oklahoma City Thunder

Los Angeles would actually be able to stretch out Deng’s contract over 11 total years at $3.3 million per season, given the loophole. But, he’d have to agree to the stipulations, which could happen if the team incentivizes him, according to Pincus.

LeBron James, Paul George and DeMarcus Cousins will be among the Lakers’ presumed targets next July. If Magic is able to work some magic and lure one or two of them to play in Hollywood, all of the planning and roster moves will be worth it in the end.

Magic Johnson
Luol Deng
Miami Heat
Southeast Division
Eastern Conference
Kobe Bryant
L.A. Lakers
Pacific Division
Western Conference

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