How repeat tax looms over Lakers’ failure to trade Russell Westbrook

The events of the past week have dealt a severe blow to thousands of Los Angeles Lakers fans who have been desperate for a trade with Russell Westbrook. It started Wednesday when Pacers general manager Chad Buchanan announced that Myles Turner would start the season in Indiana. Team leaders are little known for their honesty, but with training camp set to start next week, it’s hard to imagine he was bluffing. A day later Utah traded Bojan Bogdanovic, the centerpiece of a possible Westbrook deal, to the Detroit Pistons. Never say never in the modern NBA, but with Utah practically out of the running and Indiana taking a public farewell, it certainly looks like Westbrook will start the season in purple and gold.

Such a result felt unfathomable in April when Westbrook delivered one of the shrillest exit interviews in NBA history. The team have made every attempt to publicly welcome him back, but he has split from longtime agent Thad Foucher in part because Foucher pushed him to do so Accept the team’s olive branch. It doesn’t feel like Westbrook is keen on playing another season for the Lakers. So why couldn’t the team find a satisfying trade?

We can at least pay lip service to the idea that the Lakers wanted Westbrook back. New head coach Darvin Ham certainly wanted the world to believe that about him introductory press conference when he claimed to have “a clear plan” on how to use the former MVP. Of course, those trade rumors wouldn’t have lasted five months if the Lakers had liked the idea of ​​having Westbrook on their basketball team. After the season Westbrook just had, no one would.

The price is a reasonable explanation. It was widely reported that Indiana wanted two first-round picks from the Lakers to consider a package built around Turner and Buddy Hield. The Lakers don’t seem ready to meet that price tag. But the Bogdanovic trade clouds that idea a bit. The Pistons managed to win it without giving up a single first-round pick. Andy Larsen from the Salt Lake Grandstand reported that the Jazz could have gotten a first-round pick from other teams, but such a deal would have included long-term salary. Westbrook has an expiring contract. At the very least, this suggests that if the Lakers wanted to make a single-choice trade with Utah, they probably could have done so. They didn’t, and if they were never willing to give up a single choice, they had to know from the start that they wouldn’t be able to trade Westbrook at all.

It was widely reported that one sticking point was that the Lakers didn’t want to take a long-term salary in a Westbrook trade. The Athletic’s Sam Amick and Jovan Buha reported that the Lakers hope to add star-level free agency talent via cap space in 2023, rather than abandoning their draft picks for immediate upgrades, but as appealing as that vision is on the surface may appear, the reality is not quite so rosy. The Lakers literally can’t make a maximum cap spot next summer.

The projected cap for the 2023-24 season is $134 million. LeBron James and Anthony Davis alone will earn $87.5 million combined. Even if they dumped every other player and stuck to their books, the 10 incomplete roster fees the Lakers would be left with alongside their two stars would put them around $99 million on the books. That’s roughly $35 million in caps, a number that looks enticing at first but would actually mean pay cuts for Kyrie Irving and Khris Middleton. Andrew Wiggins is now around that number and could credibly demand a sizeable raise. Tyler Herro and Jordan Poole were mentioned as possible targets by Buha and Amick, but both will be restricted free agents. The best player likely to achieve unrestricted free agency for the Lakers to sign on a market value contract would likely be Fred VanVleet. Draymond Green may also be available through a player option, but the Lakers have tried to add an aging non-shooter. It didn’t go well.

Given all of this, does it really sound like it makes sense for the Lakers to throw away what may be the last season of LeBron’s prime for cap rank, which doesn’t seem particularly valuable? No…until you realize the secondary value of cap space. From a practical point of view, it’s almost impossible to pay the luxury tax when you’re operating below the salary cap. Creating cap space usually means relinquishing the rights to your expensive free agents. Once you’ve signed new ones, you rarely have the residual rights you need to spend across the border or the leftover salary to make your way into tax territory.

The Lakers have paid the tax for the past two seasons. Barring anything drastic, they’ll pay it again this season. So why should ducking down be important for the 2023-24 season? The Repeat Penalty. If a team has paid the tax in three of the previous four seasons, they will be assessed a highly punishing repeat penalty. Essentially, it adds a dollar for every dollar you spend over the tax limit, on top of what your tax bill would have already been. The Lakers paid an estimated $202 million in salaries and taxes last season. Had they been considered repeat offenders, that total would have been approximately $222 million. With reports that the new CBA could create a tougher luxury tax, that bump could be even bigger when next season arrives.

Reaching the tax cap next season will be a lot harder than it has been in years past because the cap is increasing so quickly. The projected taxpayer number for the 2023-24 season is $162 million. But the salaries add up. For example, imagine the Lakers made the Indiana trade for Turner and Hield. Add Hield’s $19.3 million to what James and Davis will make and you’re already at almost $107 million. Turner would need to be renewed, and while he won’t come close to the Max deal DeAndre Ayton just signed, a fairer analogue might be the $100 million deal Jarrett Allen signed in Cleveland before he All -Star became. Adjusting that contract for inflation would make Turner around $24 million a year. That number already puts the Lakers over $130 million, accounting for just four players.

From this perspective, expiring contracts come with long-term costs if you plan to keep them. The Lakers probably weren’t too keen on giving up first-round picks for players like Bogdanovic, Clarkson and Malik Beasley when tax concerns would see them out of Los Angeles after just one season. They’ve already given up Talen Horton-Tucker to bring in Patrick Beverley, a player whose cap hold they’ll need to forgo next offseason to maximize their cap space. While Austin Reaves will have a low enough cap to remain in restricted free agency even after spending the cap, his final salary will count toward the luxury tax line.

All of this is to say that trading with expiring salaries would have put the Lakers in a difficult position, especially from a visual point of view. They could keep all of those upcoming free agents after trading for them, just like they can keep Reaves and Beverley… but that would not only mean avoiding cap space, it would mean getting close to, and possibly exceeding, the control line . You could let some of those players walk, but that would not only represent wasted fortune but also anger a fan base that expects the NBA’s third most valuable franchise to spend commensurate with its sizable earnings. Building caps, which in all likelihood takes the luxury tax off the table entirely, solves this problem at the expense of the 2022-23 season.

The 2022-23 season doesn’t seem like a fair price for future tax cuts when the team paying those taxes makes an estimated $150 million annually in local television revenue alone, but the Lakers aren’t operating like their mainstream competitors. Forget payrolls with the Clippers, Warriors and Nets, who operate in a different financial stratosphere than the rest of the sports arena because of the wealth of their owners and, in Golden State’s case, the revenue they can generate from their private holdings. The Lakers simply spent less on their roster than the diminutive Milwaukee Bucks in a supposedly all-in season.

That season started when they allowed star defenseman Alex Caruso to go to Chicago with no compensation Caruso’s willingness to take less and stop. As a cost-cutting maneuver, they often start the season with an empty roster slot. They only granted Frank Vogel, a champion coach, a one-year extension after already refusing to give him (or Ty Lue) more than a three-year contract during the 2019 coaching search.

None of this is meant to suggest that the Lakers are cheap by typical NBA standards. It’s a confirmation that they’re operating within a budget that franchises in similar markets don’t seem to have. Given the budget constraints they’ve displayed over the past few years, it’s just hard to imagine the Lakers willingly paying the repeat tax.

Was that the only reason they kept Russell Westbrook? Almost certainly not. But given the way the Lakers have operated over the past few years, it certainly seems likely that the repeater tax was a factor in how they decided to create this roster. Trading Westbrook would have cost picks in the distant future, but in the meantime it would have cost dollars too, and in the end the Lakers seem to have decided they’re not willing to pay both of them for a chance to compete this season.

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