Could Benefits of Being Hardcapped Outweigh the Negatives for Lakers?
There’s a reason why more than half of the teams in the NBA opted to be hardcapped this past season. While hardcapping limits what a team can spend on salaries for the season, it also gives teams other advantages.
The first advantage is hardcapped teams can sign-and-trade for other teams’ free agents. For teams like the LA Lakers who don’t have cap space, sign-and-trades are the only way they can acquire a high priced free agent. The Lakers’ priority this summer is to find a ‘difference-making playmaker.’ Since the top point guards this summer will be free agents, the Lakers may have to accept being hardcapped to land the elite playmaker they covet.
The second advantage is hardcapped teams get the full $9.5 million MLE to sign one or more free agents from other teams. The full MLE gives the Lakers a huge competitive advantage versus teams that are not hardcapped. Non-hardcapped teams only get the $5.9 million taxpayer MLE or the $4.9 million room MLE so the Lakers would be able to offer the best MLE candidates a greater annual salary than non-hardcapped teams can offer.
Landing an elite veteran point guard via sign-and-trade and a deadeye 3-point shooting guard or small forward via the full MLE could give the Lakers two starters superior to any players available if not hardcapped.
What makes being hardcapped a smart strategy for teams without cap space is the special access to star free agent players. Sign-and-trades and the full MLE are powerful tools to accelerate building a caliber championship team.
The Lakers’ top sign-and-trade point guard target is Kyle Lowry, whom they tried to trade for at the deadline. Lonzo Ball, Chris Paul, Devonte Graham, Spencer Dinwiddie, and Derrick Rose are also sign-and-trade candidates. The Lakers’ top point guard trade target is Malcolm Brogdon, whom the Pacers have now put on the trade block. Russell Westbrook, Kemba Walker, Collin Sexton, and Terry Rozier are other point guards available via trade.
The Lakers’ top shooting guard candidate for the MLE is the Hornets’ Malik Monk, an unrestricted free agent sharpshooter. Other shooting guards for the MLE are Victor Oladipo, Alex Burks, Terrence Davis, and J.J. Redick. The Lakers’ top small forward target for the MLE is the Pelicans’ Josh Hart. Will Barton, Josh Hart, Furkan Korkmaz, Kelly Oubre, Kent Bazemore, Otto Porter, Jr., and Reggie Bullock are other small foward MLE candidates.
Being hardcapped would be worth it if the Lakers could sign-and-trade for Kyle Lowry and then sign a second quality starter like Malik Monk or Josh Hart with the full MLE. The #22 pick also becomes valuable if hardcapped.
There are severe limits to what a team can do if hardcapped. A sign-and-trade for Kyle Lowry or any free agent cannot exceed $25 million per year or the Lakers might not be able to re-sign Caruso and Horton-Tucker.
There’s a misconception teams can build better, deeper rosters by paying luxury taxes rather than being hardcapped. The reality is luxury taxes are structured so that progressive penalties rapidly limit what teams can do. Should the Lakers traded for Russell Westbrook, the annual salaries of LeBron, AD, Russ, Gasol, eight players for the vet minimum, and Deng’s $5 million waive-and-stretch total $142.0 million or close to the tax apron.
The luxury tax bill for using the taxpayer $5.9 million MLE to add a 13th player would be expensive. The total luxury taxes would cost the Lakers $12.5 million, bringing the annual pay for that player to $18.4 million. From there, the taxes become even more exorbitant. Adding 14th and 15th players who earn just the veteran minimum salary of $1.7 million would cost the Lakers another $15 million in taxes to completely fill out the roster.
The bottom line is there are advantages and disadvantages for teams willing to be hardcapped or pay luxury taxes. Which route a team chooses will depend on the specific roster needs and financial landscape of the team.
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