The Implications of Kobe Bryant’s Extension

Source: Los Angeles Lakers

The Los Angeles Lakers made a huge statement to its organization and its loyal fan base.

Kobe Bean Bryant will be a Laker for life.

The Lakers officially signed superstar SG Kobe Bryant Monday morning to a 2-year extension worth $48.5 million, according to ESPNLosAngeles.com’s Ramona Shelburne. At $48.5 million, Bryant will receive $23.5 million in 2014-15 and $25 million in 2015-16 from the Lakers. Bryant’s contract gives the Lakers an open shot at signing a free agent to a maximum contract either during this off-season or the next.

“This was easy,” Bryant told Yahoo! Sports’ Adrian Wojnarowski on Monday night. “This wasn’t a negotiation. The Lakers made their offer with cap and building a great team in mind while still taking care of me as a player. I simply agreed to the offer.”

Assuming Bryant fulfills his new contract, he will become the longest tenured player in NBA history to play with a single franchise—playing for 2 decades with the Los Angeles Lakers.

However, Lakers fans have had mixed reactions in regards to Bryant’s new extension. Due to the league’s complex new Collective Bargaining Agreement (CBA), most Lakers fans have difficulties answering the following question;

How does Bryant’s extension affect the Lakers’ cap room and their quest to help Kobe win another championship to tie Michael Jordan’s 6 championships?

Hoopsworld.com columnist Larry Coon and Los Angeles Times Eric Pincus both did a phenomenal job on their columns “A quick update on Kobe’s extension and the Lakers’ cap space“ and “What does the Kobe Bryant contract mean to the Lakers’ roster?“ These columns are excellent guides on how the Lakers will work with the expected 2014-15 soft salary cap of $62.9 million to build another championship contender.

Using their views, let’s take a look at the Lakers’ current salary cap situation for this off-season.

Lakers’ Current Salary Cap Situation

As Larry Coon noted, the Lakers currently have Kobe Bryant, Steve Nash, and Robert Sacre on books for next season, while Elias Harris has a non-guaranteed contract and Nick Young has a player option next season. The Lakers will also have a 1st round draft pick, which would fall to the 15th pick if season ended today at a cap hit of about $1.5 million.

Here is the scenario that Larry Coon gives the Lakers to work with:

“If they remove both [Elias] Harris and [Steve] Nash, their team salary will drop to about $34.44 million, which would give them about $28.46 million in cap room. This would give them the opportunity to sign one maximum-salary player, and a second player at around the mid-level amount. They would also be eligible to utilize the Room Mid-Level exception for around $2.7 million.”

Now, let’s say the Lakers use the Room Mid-Level exception on current SG Jodie Meeks, who is averaging 13.3 PPG and shooting 47.7% from behind the three-point line this season.

Also, lets assume the Lakers re-sign PG Jordan Farmar and F Wesley Johnson to veteran minimum deals.

According to Eric Pincus, “Their cap holds will be just $915,243 next summer…the Lakers can negotiate small (7.5%) raises for each, if both sides are willing — after the team uses its cap room.”

Pincus also mentioned that C Pau Gasol and C/PF Jordan Hill’s cap holds stand at $20.3 million and $6.7 million respectively for this off-season. The Lakers would definitely need to renounce Gasol’s bird rights and possibly Hill’s also to make a legitimate run at a max-contract player. Furthermore, Gasol would need to accept a steep discount, approximately $5.5 million to $8 million per season, to have any chance to rejoin the Lakers under any scenario.

After retaining Bryant, Young, Sacre, Meeks, Johnson, Farmar, and a 1st round pick before the 10-day July moratorium period ends, the Lakers would then maintain up to approximately $26.63 million of cap space to sign free agents this off-season.

Using the facts obtained from Larry Coon’s and Eric Pincus’ columns, let’s see the most plausible route the Lakers can take from here.

Scenario #1: Sign Carmelo Anthony and choose between Pau Gasol or Jordan Hill

Source: Jeff Gross/Getty Images North America

Source: Jeff Gross/Getty Images North America

The Lakers told Bryant they have room to sign one max contract.

After hours of studying the salary cap and analyzing multiple reports, Carmelo Anthony seems to be the one and only max player the Lakers can reasonably sign next summer.

Anthony, a 29-year-old superstar forward for the New York Knicks, is currently in his 11th season in the NBA with career averages of 25.0 PPG, 6.4 RPG, and 3.1 APG. Anthony had a monster 2012-2013 season, scoring a career high of 28.7 PPG and leading the Knicks to the 2nd round of the playoffs.

The Knicks, however, are currently struggling with injuries and a lack of team chemistry, causing them to fall to a dismal 3-10 record to start off this season.

To make things worse for the Knicks, they cannot retool their roster around Anthony as their roster currently stands due to expensive contracts. Amar’e Stoudemire and Andrea Bargnani, two overpaid players way past their primes, will most likely opt-in for $23.4 million and $11.5 million salary respectively next season. Tyson Chandler also has another year left in his contract, worth $14.6 million next season

According to HoopsRumors.com’s Luke Adams, Anthony can earn a max contract for either $129 million for 5 years with the Knicks, or for 96 million for 4 years with another team, including the Lakers as a free agent this off-season. Anthony could also have a player option after his 3rd season under both potential contracts.

Anthony and Bryant have a very close relationship both on and off the court. Bryant and Anthony built their relationship from being teammates at the 2008 and 2012 Olympics, where they both made significant contributions in winning two gold medals. Also, their wives Lala Anthony and Vanessa Bryant have a very close friendship as well.

If Anthony signs with the Lakers at the maximum level, Anthony would most likely earn $22.45 million salary his first season, giving the Lakers an additional $4.18 million to sign other free agents, including Hill and Gasol.

For the Lakers to retain Jordan Hill in that scenario, the Lakers would have to renounce Jordan Hill’s bird rights and re-sign him for the remaining cap space of $4.18 million. At this amount, Gasol would most likely not re-sign, leaving the Lakers with no other choice but to re-sign Hill.

If, however, Anthony somehow decides to take a minor paycut to join the Lakers for about $90 million over 4 years instead, he would earn approximately $21 million his first year, leaving the Lakers with $5.63 million cap room left to spend.

At $5.63 million, the Lakers would potentially have the option to sign either Hill or Gasol. Unfortunately, the new CBA will most likely not allow the Lakers to sign both of the valuable big men, forcing the Lakers’ front office to choose between Hill and Gasol.

Bottom line: signing Carmelo Anthony will give Kobe Bryant and the Los Angeles Lakers their best chance to make another championship run in the short term. However, the Lakers would have to become very creative with their salary cap space if they have any hopes of re-signing both Pau Gasol and Jordan Hill under this scenario.

Scenario #2: Sign Rudy Gay, Re-Sign Pau Gasol and Jordan Hill

Source: NBAE via Getty Images

In the scenario in which Carmelo Anthony decides to re-sign with the New York Knicks, the Lakers can potentially make an acquisition that would also appease Kobe Bryant.

Rudy Gay, who last season was traded by Memphis Grizzlies to the Toronto Raptors in a multi-team trade, has an opt-out clause in his contract that will allow him become a free agent following this season.

Gay, a 27 year-old NBA veteran, has averaged a solid 18.0 PPG and 5.8 RPG throughout his eight year NBA career. Like Gasol before the Lakers acquired him, Gay has been the best player on his team the majority of his career, despite never making an all-star team. Gay has also shown significant improvement defensively, playing with a lot of hustle and energy on that end lately.

Although the Raptors have a good nucleus of young talent to build around Gay, the Raptors still have little chance to make a run at an NBA Championship.

The Lakers would gain a solid consolation prize in Gay if he opts out after this season.

Gay would most likely not turn down the opportunity to team up with Kobe Bryant and the Lakers to make a run at a title, if the Lakers were to offer him a contract. Like Gasol did after he moved from the Memphis Grizzlies to the Lakers, Gay could evolve from being the best player on a mediocre team to an all-star player who contributes to a title-contending team like the Lakers.

If the Lakers sign Gay for the market value for 4 years, he should cost the Lakers only about $15 million per season. Therefore, the Lakers could re-sign both Jordan Hill and Pau Gasol under this scenario.

The Lakers would have approximately $11.63 million cap room to share between Hill and Gasol. If the Lakers can convince Gasol to take a huge paycut for $7 million and Hill to accept $4.63 million salary for the 2014-2015 under a 2 or 3 year contract, the Lakers would definitely upgrade their lineup despite losing out on the biggest prize in Carmelo Anthony.

Scenario #3: Wait for the 2015-16 Free Agent Class

If the the Lakers miss on both Carmelo Anthony and Rudy Gay, the Lakers should take the same approach this off-season as they did last off-season.

Sign everyone to one-year contracts.

The formula of placing a bandage on the team this season seems to have worked out fairly well—finding diamond in the rough players like Wesley Johnson and SG Xavier Henry.

Rather than overpaying for a player or signing average players to multi-year contracts, the Lakers could build the team around Bryant with eager young players who seek to revitalize their careers under the tutelage of Bryant.

This current Lakers team has shown that they have the heart and energy to compete with any team in the NBA. They have already defeated the Los Angeles Clippers, Golden State Warriors, and Houston Rockets without Bryant—staying afloat at a respectable 7-7 record.

Through patience and waiting until the 2015-16 free agent class, the Lakers could potential have many potential free agents to choose from.

The 2015-16 free agent class includes Minnesota Timberwolves C/PF Kevin Love and PG Ricky Rubio, Boston Celtics PG Rajon Rondo and F Jeff Green, Brooklyn Nets C Brook Lopez, and Indiana Pacers C Roy Hibbert.

If the Lakers are forced to take this route, Bryant’s chance at a title for 2014-15 might become the same as this season. However, it will definitely give him the best chance to win if they sign one of those free agents under this scenario.

Bottom Line

The status of Steve Nash determines how much cap room the Lakers have to retool their roster around Kobe Bryant. As mentioned before, the Lakers can either waive Nash or continue supporting him as he attempts to play through nerve damage.

If the Lakers decide to let Nash finish his contract and play next season, the Lakers will not have the cap space to sign Jordan Hill or Pau Gasol under the Carmelo Anthony Scenario, and would have to choose between Hill and Gasol under the Rudy Gay scenario.

Furthermore, Larry Coon explained two additional scenarios in regards to Steve Nash during his interview with Beto Duran and Arash Markazi on ESPN LA Radio’s Mason and Ireland Show, two more possibilities exist in regards to Steve Nash.

If Nash retires, his entire 2014-15 salary would come off the books. Nash and the Lakers would most likely negotiate a buyout after retirement, in which the buyout amount will count against cap, but the Lakers can stretch that cap hit over a three year period.

In the unlikely scenario where Nash retires for medical reasons, the Lakers would receive a full salary cap relief from Nash’s contract while paying him the $9.7 million he is owed for the 2014-2015 season.

Under Scenario #1 and Scenario #2 as previously mentioned, the Lakers will fill the rest of the team with veteran minimum level salary players this off-season, similar to this season. However, the Lakers know how to find talent that have not been utilized to its full potential by other teams. Players such as PF/C DeJuan Blair, C Ryan Hollins, and G/F Brandon Rush are examples of veteran minimum level players who can make a major contribution to the Lakers’ championship run.

Although fans have shown mixed emotions regarding the amount of money Bryant is scheduled to receive on his new extension, we know a few things for a fact:

The Lakers clearly know what they are doing.

Doctors have full confidence that Bryant will return to how he played prior to his devastating Achilles injury.

And finally, the Lakers and Bryant are fully committed to a final NBA championship run.