The Lakers will get Anthony Davis.
That’s clearly the only thing that matters to them.
Not only will they send the Pelicans a massive haul of draft picks and young players, the Lakers could lose significant cap space with the trade’s structure.
Los Angeles and New Orleans can’t complete the reported deal until the league year turns over June 30. Then, the NBA immediately goes into a moratorium in which most transactions aren’t allowed. The moratorium ends July 6. That’s when two main options emerge.
Option 1: Trade July 6
Let’s start with Davis’ trade kicker, a bonus paid to him if traded. Davis’ base salary next season is $27,093,018. His 15% trade bonus could raise his salary $4,063,953 to $31,156,971. Davis could waive all or a portion of the bonus. The Pelicans would pay the bonus, but the Lakers can also include enough cash in the trade to cover the full bonus amount.
The Lakers will send Lonzo Ball, Brandon Ingram and Josh Hart (combined salary: $17,918,965) and the No. 4 pick (which will count about $7 million against the cap) to New Orleans.
Davis’ salary will be between $27,093,018 and $31,156,971 next season, depending on his trade kicker.
Simply, the Lakers’ incoming salary in the trade will be about $2 million-$6 million higher than their outgoing salary in the trade.
That works just fine under the cap rules. The Lakers will have way more than $2 million-$6 million in cap space. As far as salary matching, teams can always trade when they end up under the cap.
So, after this deal, the Lakers would have about $24 million-$28 million in cap space.
But there’s another path that would give the Lakers even more flexibility.
Option 2: Trade July 30
On July 6, if they renounce all their free agents and waive Jemerrio Jones‘ unguaranteed salary, the Lakers project to have about $33 million cap space.
That’s about enough for a max salary for a free agent with fewer than 10 years experience – someone like Kemba Walker, Jimmy Butler, Kawhi Leonard or Kyrie Irving. Or multiple helpful role players.
The Lakers could spend all that money then trade for Davis.
Here’s how they could get Davis after reaching the cap line:
They’d sign the No. 4 pick June 30. (Signing first-round picks is one of the few moves allowed during the moratorium.) He couldn’t be traded for 30 days after being signed. Hence, the July 30 date on this trade. But his actual salary would count toward the trade. Unsigned draft picks count $0 in trades.
In this salary range, the Lakers could acquire 125% of the outgoing salary in the trade plus $100,000. Aggregating Ball, Ingram, Hart and the signed No. 4 pick would allow the Lakers to acquire about $31 million of salary. That covers Davis’ full salary and most, if not all, of his trade bonus.
But why would the Pelicans wait?
That’d mean the No. 4 pick can’t play for them in summer league. There’d also be complications flipping the No. 4 pick to another team.
It’d also tie up a portion their cap space until the trade is completed, as they’re the ones holding the more-expensive Davis through July. Most good free agents will be off the market by July 30.
New Orleans could always reach an unofficial agreement with a free agent then make the deal official after the Lakers trade. But that requires trust, and some free agents might not go for that.
There’s no upside in waiting for the Pelicans. The only question is how much downside.
What’s at stake?
A quick recap:
If the Lakers trade for Davis sooner, they’d project to have $24 million-$28 million in cap space (depending on his trade bonus).
If the Lakers trade for Davis later, they’d project to have about $33 million in cap space.
That extra $5 million-$9 million could go a long way.
It doesn’t sound as if the Lakers pressed New Orleans to wait until July 30 before accepting the trade.
Adrian Wojnarowski of ESPN:
Tania Ganguli of the Los Angeles Times:
For now, the plan is to execute the trade on July 6, right after the moratorium ends on the start of free agency — and it’s unlikely that will change.
The Lakers could always negotiate with free agents June 30-July 5 then decide. If they want the additional cap space, the Lakers could try to entice the Pelicans with extra draft picks to delay. But that’d make the trade even more costly to Los Angeles.
The alternative might be even more grim – the Lakers not finding worthy players in the first week of free agency. Los Angeles could even view that as a face-saving move to justify the timing of this trade.
But if the Lakers make this trade July 6 then claim they didn’t have good use for an extra $5 million-$9 million in cap space, they’ll only be telling on themselves.