How the Lakers Can Rebuild Roster by Taking Advantage of Sign-and-Trades!

In the aftermath of the injuries and first round elimination, the Lakers face a daunting challenge this summer figuring how to pull off a major overhaul of their starting lineup when all they can actually afford is an oil change.

How successful Rob Pelinka and the Lakers’ front office are rebuilding the team’s starting lineup will depend on how smartly and innovatively they use sign-and-trade transactions both to send and receive free agent players. Sign-and-trading your own free agents or signing-and-trading for other teams’ free agents are tough transactions to pull off but are probably the only way the Lakers could pull off a major upgrade of their starting lineup.

Let’s look at the rules for sign-and-trades, why the Lakers need to take advantage of outbound and inbound sign-and-trades, and which free agent stars from other teams the Lakers should target via sign-and-trades.

1. Sign-and-Trade Rules

Until the last two years, sign-and-trade transactions were rare because they needed the player’s permission, required the receiving team to give up assets for a free agent, and forced the receiving team to be hard capped.

Over the last two years, sign-and-trade deals have suddenly become the rage in the NBA. There were more than a dozen players, many of them stars, who went to new teams via sign-and-trade deals the last two years. The renewed interest in sign-and-trades is due to the increased competition from teams seeking to land star players, whose salaries are large enough to avoid base year compensation rules that restrict other sign-and-trades.

Sign-and-trades give win-now teams like the Lakers an opportunity to trade their own free agents rather than losing them for nothing or trade for other team’s free agent stars for whom they don’t have the cap space to sign.

2. Outbound Sign-and-Trades

Assuming James and Davis are untouchable, the Lakers currently have zero cap space and just four players earning $30 million per year under contract to use to trade for a new starting point guard, shooting guard, and center.

The Lakers could expand their tradeable contracts by another $50 million by creating sign-and-trade scenarios for their own free agents with teams who don’t have cap space or worry about losing their own free agents for nothing. Supplementing tradeable contracts for Kuzma and Caldwell-Pope with possible sign-and-trade deals for Schroder, Harrell, Horton-Tucker, and Caruso would dramatically improve the Lakers’ portfolio of trading chips.

While signing-and-trading free agents can be tricky, there’s no way the Lakers have enough trading chips to upgrade their starting lineup without sign-and-trade deals for key rotation players like Schroder and Harrell.

3. Inbound Sign-and-Trades

With zero cap space, the only way the Lakers can upgrade a position in their starting lineup with another team’s free agent would be to use the $9.6 million Non-Taxpayer Mid Level Exception or an inbound sign-and-trade.

Receiving players via an inbound sign-and-trade has serious ramifications on a team’s financial flexibility as it instantly hard caps the team for the rest of the season. Over half the teams in the NBA were hard capped this season. Receiving a player via a sign-and-trade, signing a free agent with their Bi-Annual Exception, or using more than the $5.9 non-taxpayer portion of their Mid Level Exception are all transactions that will hard cap a team.

Being willing to accept a hard cap for receiving a star player via a sign-and-trade significantly expands the number of star caliber players the Lakers could pursue to upgrade the non-superstars in their starting lineup.

4. Sign-and-Trade Targets

By embracing outbound and inbound sign-and-trade deals, the Lakers can dramatically improve their available trading chips to include their own free agents and star players they target to include the other teams’ free agents.

The Lakers could include Dennis Schroder and Montrezl Harrell as trading chips in outbound sign-and-trades for players under contract with other teams like Buddy Hield, Myles Turner, Kristaps Porzingis, or Kemba Walker. They could use their $50 million in free agent contracts to pursue inbound sign-and-trades for free agent stars like Kyle Lowry, Lonzo Ball, Chris Paul, Mike Conley, Jr., Kelly Oubre, Jr., John Collins, or Richaun Holmes.

The Lakers have too few trading chips and too few attainable trade targets not to join the rest of the modern NBA and embrace outbound and inbound sign-and-trades as the key tool for teams to build championship rosters.

5. Impact of Hard Cap

Any discussion of sign-and-trades has to recognize the impact for an NBA team of being hard capped, especially a contender like the Lakers who have never allowed luxury taxes to prevent them from chasing championships.

Being hard capped at $140 million would clearly limit the moves the Lakers can make, especially at the trade deadline where they would not be able to make trades unless the salaries coming in were less than those going out. There is, however, some financial benefit in being hard capped versus being so far over the luxury tax like the Golden State Warrirs so that adding a $10 million per year player ends up costing the team $50 million in taxes.

There’s an argument to be made that the Lakers would be smart to keep their annual payroll around $140 million so that they can be in position to create max cap space to sing another superstar when LeBron James retires.

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