Los Angeles Lakers: How much cap space do they have this summer?

As July 1 approaches, let’s take a look at the Los Angeles Lakers’ cap situation, and why their 2017 spending is based on their 2018 plan.

It’s junior year of high school for Magic Johnson, Rob Pelinka and the Los Angeles Lakers. Everything big that is supposed to happen will happen next year. This year is about getting everything in order so senior year is awesome.

By trading a former No. 2 overall pick (D’Angelo Russell) in order to get rid of Timofey Mozgov’s outrageous contract, the Lakers announced to the league that they are going all-in on the 2018 free agent market. The dream scenario is to bring Paul George and LeBron James to Hollywood, creating a star-studded cast that will be supported by a promising young core of Lonzo Ball and Brandon Ingram.

In order for the Lakers to have enough cap space to turn their 2018 dream into a reality, a few things will need to happen.

First, somehow, some way, Jordan Clarkson and Luol Deng need to be traded, or one of them needs to be traded (likely Clarkson) and the other’s contract stretched out (Deng).

Second, any new player added to the Lakers roster needs to come on a one-year deal, and third, the young stars need to show enough individual development to prove they can eventually become key components on a championship team (something to think about in a separate piece).

Before we get into how the Lakers can create more cap space in the future, let’s look at where they stand today.

Including Lonzo Ball, Kyle Kuzma and Josh Hart’s rookie scale contracts, the Lakers have roughly $11 million in cap space (based on a projected $99 million salary cap). Tarik Black’s $6.6 million is non-guaranteed until July 4. The Lakers could gain cap space by waiving Black before Independence Day, but that wouldn’t make much sense, considering he has the potential to be a solid role player and his contract doesn’t extend beyond this season.

This is where we get into 2018 impacting 2017. Yes, the Lakers have cap space this summer. No, that doesn’t mean they will spend much of it. And here is why: LeBron James and Paul George.

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Signing both LeBron James (10+ veteran) and Paul George (7-9 free agent) next summer requires the Lakers to have 65 percent of the projected cap in available space. A player with at least 10 years of experience in the league (LeBron) qualifies for 35 percent of the cap and a player with 7-9 years of experience can demand up to 30 percent. That equates into $66.95 million based on a $103 million cap.

Assuming the Lakers don’t add any new pieces before next summer, they would still need to get creative in finding over $66 million in cap space. One way of getting close would be to trade Jordan Clarkson for an expiring contract, or anything (including adding a draft pick as a sweetener going the other way) that returns no salary beyond 2017-18.

The Lakers could then use the stretch provision to alleviate the near-term cap burden of Deng’s contract. Those two moves would give them $62.54 million in cap space (based on a $103 million cap), about $4.5 million short of fitting in both LeBron and George’s potential max contracts.

League rules require at least 12 salaries to be included in cap calculations, so I added the standard three minimum contracts to the 2018 cap space projection.

Say what you want about the Mozgov trade and having to give up on a prospect like Russell — and believe me, I have said plenty to criticize that move — you can at least see, looking at the numbers, why the Lakers are doing everything in their power to create cap space. They will need every cent they can get in 2018 if they want to sign two superstar players to max contracts.

Los Angeles Lakers

Trading Jordan Clarkson is perhaps the most important move to making everything work. While he probably won’t excite other teams to the point they would trade draft picks to get him, he is a better asset than Luol Deng (and Mozgov).

Clarkson is only 25 years old, he can shoot threes, handle the ball a bit, and provide microwave scoring off the bench. The Lakers’ ability to package Clarkson without taking back salary beyond next season is critical, as it would then allow them to stretch Deng and not have to worry about trading him at a huge cost (like they did Mozgov).

Trading Clarkson and stretching Deng also allows the franchise to invest in its young core, even while reaching for the stars. The Lakers currently have an awkward roster, overfilled with power forwards and bigs, so they will eventually need to change that composition in building a competitive team.

But there is plenty of cap space to keep a solid group of developing players on their roster in the future. It has been a foregone conclusion that Julius Randle will be a casualty of the Lakers’ big plans; and if they are unable to unload Deng’s contract, being forced into stretching it out, Randle’s cap hold is too large to keep on the books next July (thanks to @Tristalcari for pointing out the correct cap hold amount). The team could look to trade him during the season to get back a young asset with a smaller cap hit. Even if Randle is sacrificed for the cap, cheaper options such as Larry Nance Jr., Ivica Zubac, Hart and Kuzma can all be preserved under the cap.

As free agency begins, expect the Lakers to look for one-year deals, preferably veteran guards, to help their current roster. If Magic and Pelinka sign a player on a multi-year deal, it is indicative of two things:

They feel confident that they can move Deng’s contract without retaining much salary (unlikely).
They feel the same way about Randle (or are ready to let him walk), since removing him from the 2018 salary rolls adds about $6 million in cap flexibility beyond the space needed to sign two max players.

Free agency is an ineffective way for the league to distribute revenue back to the players. Teams almost always overpay and that is because compensation is often based on previous performance instead of expected performance. The Lakers have a group of young players that is cheap and has its best playing days ahead.

Next: 2017 NBA free agency tracker - Grades for every deal so far

2017 won’t be an exciting summer for Lakers fans looking for big signings, but that is ok. The plan is in place for 2018 and this summer is about being patient.

*All salary figures from spotrac.com