What is the Lakers' current payroll situation?

Harry How

As the Lakers start making moves in the offseason following Dwight Howard's departure, let us look at how they are managing the payroll and what conclusions we can draw from it.

The shape of the Lakers team next season is starting to take shape, as more additions come in to bolster a wing rotation that has been savaged by Metta World Peace's amnesty, Kobe Bryant's injury, and Devin Ebanks' general suckage. Surprisingly -- or not so surprisingly, perhaps -- the Lakers have made good use of their limited resources, as all three of their free agent acquisitions so far have constituted excellent value, all apparently brought in by the lure of the franchise and the city. In the wake of these events, especially since no longer having Dwight Howard has removed a hefty $20 million burden on the overall payroll, let us look at where the team stands currently:

Player '13-'14 Salary
Kobe Bryant $30,453,805
Pau Gasol $19,285,850
Steve Nash $9,300,500
Steve Blake $4,000,000
Jordan HIll $3,563,600
Chris Kaman $3,183,000
Jodie Meeks $1,550,000
Chris Duhon $1,500,000
Robert Sacre $988,872
Jordan Farmar $884,293
Nick Young $884,293
Ryan Kelly $490,180
Total current payroll $76,084,393

A bit nicer than a $100 million payroll and a $80 million luxury tax bill, no? If you're still curious as to what that looks like, take a gander at the money that is currently being burned The Dark Knight-style in Brooklyn following the Kevin Garnett and Paul Pierce trade. In any case, some quick particulars on the above: those of you wondering why Duhon is mentioned despite no longer being on the team, his contract contained a partial guarantee for this season, which remains on the payroll even though he was waived. The Lakers' insistence on one year deals to preserve 2014 cap space has also helped their cap situation with Farmar and Young, as both are being paid more than $884,293. Farmar, for instance, as a six-year veteran, is actually making $1,106,941, but the league covers the difference between his contract and the minimum for a two-year veteran, the aforementioned $884,293, so long as he is on a one-year deal and has more than three years of service.

That leaves the team with eleven players on the roster assuming that Farmar's buyout with his Turkish team goes smoothly and Kelly makes the squad in training camp. From here, the Lakers still have to reach the roster minimum of thirteen, so let us assume that two more veterans are added to the squad:

Player '13-'14 Salary
Two veteran minimum players $1,768,586
Total projected payroll $77,852,979

A fairly modest payroll by the team's recent standards -- compare it to the $99,911,165 invested in last season's train wreck -- the team has a correspondingly much more bearable tax burden under the auspices of the new CBA's harsher tax system:

Total projected payroll $77,852,979
'13-'14 tax line $71,748,000
Difference $6,104,979
Tax $9,433,713

As you can see here, the Lakers are paying much more than just the amount they go over the tax line. It gets even worse the further you go up, as every $5 million bracket adds another $0.50 per dollar above the tax line, hence the absurd tax bill the Nets are getting. This is pretty much the primary reason the team amnestied Metta, as he was the difference between a bearable tax burden and the ridiculous one they would get if they kept him on the team. Observe:

Metta World Peace '13-'14 salary $7,727,280
Total payroll with MWP $84,695,966
Distance from tax line $12,947,966
Tax $23,619,915
Difference with current tax $14,186,202

Yeah. Don't know about you, but Metta isn't worth an additional $14 million just to keep on the roster, and the Lakers could save even more if teams bid on MWP in the amnesty waiver wire process and reduce the Lakers' salary obligations to him. It simply was the logical move to make given how MWP's play has fallen off recently and even if it has left a gaping hole in their wing rotation, the team is better off trying to cobble together a makeshift group on the cheap than throwing a lot of money at what is now a so-so player.

And before you ask, using the amnesty instead on Steve Blake, whose role might be increasingly limited next year given Farmar's presence at the point and Young probably playing both wing positions, the savings simply aren't in the same league. Let's crunch more numbers:

Steve Blake '13-'14 salary $4,000,000
Payroll after Blake amnesty $81,580,259
Distance from tax line $9,832,259
Tax $15,956,453
Difference with current tax $6,522,740

Even if Blake is much, much more superfluous from a roster standpoint at the moment than MWP, that additional $7.6 million the Lakers save by amnestying MWP instead is quite considerable. For a team that has few illusions about being competitive next season, something that even the most ardent optimists among us would acknowledge, this is a no-brainer. Yes, the Lakers collect enormous amounts of money from ticket salaries, merchandising, and especially their mammoth television contract, but this is still a family business that has to make a profit every year. Given that they have spent deep into the tax for quite the extended period now in pursuit of championships, downsizing the payroll during a down year is hardly something Lakers fans should get worked up about.

Amnestying MWP, moreover, opens up the possibility of actually getting under the tax line, something that would be flatly impossible by jettisoning only Blake. As noted above, the team will only be $6,104,979 away from the tax line after they complete filling out the roster, and that's not an insurmountable wall to climb, especially since eleven teams still have cap space in a summer that has wrapped up the grand majority of free agent business. If you question the utility of doing such a thing, remember that teams under the tax line receive a chunk of the total tax payments that are forked over to the league by teams that go into the tax. Usually a provider of a fair chunk of that pool, the Lakers would instead be a recipient, so they could stand to gain quite a bit more savings by further downsizing the payroll. It would also serve as a fair bit of irony for the Lakers to be getting money from other teams despite a new CBA designed to punish them for keeping a high payroll.

The Lakers would also reset the clock on the repeater tax by getting under the tax line, although this is a more muted concern given how the Lakers' projected future payroll currently looks. After 2015, teams that have paid the tax in three of the previous four seasons will have to deal with an event more burdensome tax bill due to the multipliers becoming more stringent for each tax bracket. For instance, the Lakers' current tax of $9,433,713 would balloon to $15,538,692 in a repeater year and it gets even more ridiculous the further you go up. For the Lakers' purposes, however, they plan to have cap space in both 2014 and 2015 unless they land two max free agents in the former year, so this isn't a concern. By 2017 perhaps the Lakers might be coming close to the edge of the tax line, but by then, they will have three full seasons as a non-taxpayer.

This notwithstanding, let us look at ways in which the Lakers could get under the tax line this season. Those of you in support of the Lakers getting worse in support of a better 2014 draft pick could see this as killing two birds with one stone, and trading current assets could also result in future ones the team could utilize down the road when they are back on a more upward trajectory. Even if you don't subscribe to this line of thinking, however, it is hard to complain about the front office attempting to secure a better financial situation when there aren't postseason accolades on the line. In any case, the simplest method for the Lakers to get under is to deal their smaller salaries to teams with cap space. Let's start with this pair:

Steve Blake and Jordan Hill combined '13-'14 salaries $7,563,600
Payroll after trading both Blake and Hill $72,057,965
Distance from tax line $309,965
Tax $464,947

Blake and Hill make the most sense simply because no one else on the roster save for the big three at the top of the payroll has sufficient salary heft to make a difference in these discussions. Hill probably isn't all that difficult to deal given his solid skill set and he might even enable the Lakers to get some assets in return, whether a pick or otherwise. Blake on the other hand is quite overpaid for his production, his torrid finish to the season notwithstanding, and will require more suasion for other teams to take him back for nothing. Packaging the two might be an option, but if this is the path the Lakers take, the more likely outcome is that they end up in different locales.

This noted, the Lakers don't quite make it with this method, as having to replace both Blake and Hill with veterans at the minimum leaves them a hair's breadth above the tax line. They could make a subsequent move by dealing Meeks and acquiring another wing in place of him as well, but there's another way out of this predicament:

Rookie free agent salary $490,180
Difference with two-year veteran minimum $394,113
Payroll after trading both Blake and Hill, one UDFA and veteran as replacements $71,663,852
Distance from tax line -$84,148
Tax $0

Recall that we have been presuming that the replacements in any of these amnesties or trades are veterans with at least two years of experience. A player who was not selected in this past draft receives a far lower starting salary and the difference between the two is enough to bridge the gap and get just slightly under the tax line. As the summer league pieces we have put out recently indicate, there are a few UDFA prospects that have a chance of making the squad and the Lakers could take advantage of their inexpensiveness in this instance. One could see someone like Florida State's Michael Snaer being such a linchpin.

The Lakers aren't necessarily guaranteed to have an outstanding UDFA performer, however, and many of the most promising summer league participants such as Chris Douglas-Roberts or Josh Selby have sufficient NBA experience to render this scenario invalid. The distance from the tax line is also so small that the team would be unable to sign anyone else without making a subsequent transaction to clear more space, an unfortunate proposition given the injury worries of several of the main players and a desire for greater depth in general.

So while such an approach is definitely plausible, the limitations it imposes on the Lakers would make it difficult for the team to operate normally for the remainder of the year. It might even make inviting players to training camp difficult because the amount of guaranteed money the Lakers could offer would be hugely hamstrung by their desire to stay below the tax line. Again, a subsequent move could provide more breathing space, but the more parts you add, the harder it is to pull off.

All of this makes the most direct means the Lakers can get under the tax line dealing either Steve Nash or Pau Gasol. The former option has a lot of positives: Nash is the only player whose salary goes into the 2014 season, so clearing him off the cap would open up $9 million more in space. Of course, the Lakers could clear most of that away via the stretch provision, but they would still be left with a minor cap hit in 2014 as well as one in 2015. Assuming the Lakers are active in free agency next offseason, they will need to be especially careful about conserving flexibility for the 2015 offseason when the number of free agent targets goes up considerably and imposing an additional $3 million into that mix doesn't help a whole lot.

If the Lakers believe that Nash is ultimately going to be a cap causality in 2014, especially if Kyle Lowry is one of their targets, it behooves them to at least explore moving him. There's little point in retaining him for this upcoming season if he is only going to become a hindrance to the Lakers' future plans. Now, Dwight leaving does give the Lakers much more leeway to keep Nash in most 2014 scenarios and outside of Lowry, there isn't exactly a prime target for the Lakers to go as a replacement for Nash at point guard -- and no, getting John Wall is borderline impossible, so don't even go there. On the flip side, dealing Nash does give a nice bump to any hopes of tanking and it would be nice for the reins of the offense to be handed to youth such as Farmar or possibly Selby.

Unlike the Blake and Hill scenario, the Lakers would have about $3 million of space to work with in terms of taking back salaries in any Nash transaction, although he doesn't exactly have a prolific list of suitors that might be itching to get a hold of him unlike last offseason. Toronto added the highly competent Masai Ujiri, who just finished hoodwinking the Knicks into taking Andrea Bargnani's horrid contract, so he's not about to make an about face and take on salary for 2014 despite Nash's obvious symbolic value for the league's only Canadian franchise. Similarly, Dallas has just spent a good portion of its cap space on Jose Calderon and Devin Harris and even if they believe the latter is going to be mainly an off guard, it's hard to see Dallas taking back Nash's contract with both Calderon and Harris on long-term deals.

The Knicks would be a possibility given their pursuit of Nash last offseason and lack of compunction against acquiring aging veterans, but they lack the salary ballast to construct such a deal and the ability to offer the Lakers' cap relief. There might be no real choice for the Lakers in this case but to try to construct three team deals with Nash's intended destination offering other assets to a team with cap space to help grease the wheels of any such transaction. One example would be Indiana sending Danny Granger, made suddenly superfluous by his health, Paul George's emergence, and a surplus of forwards on the roster, to a third team while the Pacers take back Nash, who fills Indiana's desperate need for someone who can run the offense besides George Hill. There are naturally plenty of pitfalls to that occurring, but it illustrates what would be required to move Nash and not take back significant salary in the process.

As for Pau, the Lakers are probably much less likely to move him since without Dwight, he has a clear post-2014 role as the Lakers' center for the foreseeable future and it shouldn't be that difficult to fit him into the gobs of cap space the Lakers have even if they do sign two max players. If the team was willing to move him and incur Kobe's enduring wrath, they face significantly less limitations than with Nash since Pau's an expiring salary, he has a lot more value, and the sheer size of his contract actually makes it a bit easier for the Lakers to take back salary into the roughly $13 million leeway area they would have in front of the tax line. Again, it's just highly unlikely because Pau still retains a lot of future utility for the franchise.

The difficulty involved in all of these scenarios provides a perfectly sensible rationale for why the Lakers won't be able to get under the tax line, although it wouldn't be surprising for them to try either. With setting back the clock on the repeater tax not an overly pressing concern, the Lakers would only be moving under for financial reasons this season or if you believe that Mitch Kupchak is indirectly handicapping the roster in search of a better draft pick -- as giving the full taxpayer midlevel to a frontcourt player who might be on the court for only 20-25 minutes is a pretty glaring indication -- then it only aids that effort. The team could also explore moving the aforementioned players closer to the trade deadline, as jettisoning pieces then with the season clearly lost would look much better from a PR perspective.

Whatever they do, the Lakers have their financial house in order and no obstacles to their 2014 plans aside from playing through what should be a painful season made easier by much smaller expectations. The team did what they needed to do in amnestying Metta to get their tax bill to a reasonable level considering how competitive they will be next season. If the front office sat on their laurels and mined the summer league roster and the remainder of the minimum salaried veteran pool for the rest of the rotation without making any more headline-grabbing transactions, it would not be surprising. Still, as much as we give the front office props for being unafraid to make big moves and incur a certain amount of risk, it also applies in the other direction when a minor rebuilding year is upon us. Jettisoning players when it is in the franchise's best interest is something the Lakers are willing to do, and we will see whether it plays out during this upcoming year.

Follow this author on Twitter @brosales12.

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