Dennis Schröder turned down contract extension offer from Lakers, but the two sides are still talking

Right before the Lakers tipped off against the Dallas Mavericks on Christmas Day, we got a special, holiday Woj Bomb from Adrian Wojnarowski of ESPN, who reports that the Lakers and current starter Dennis Schröder have been talking about a contract extension, although Schröder passed on the Lakers’ initial offer.

The Los Angeles Lakers have begun engaging with starting point guard Dennis Schroder in contract extension talks, and those discussions are expected to pick up again as soon as mid-February, sources tell ESPN.

Before the start of the season, Schroder turned down an initial Lakers offer to extend his contract for an additional two-years and $33.4 million, sources said — an overture that represented the maximum allowable offer the Lakers could make him prior to February 16.

However, it sounds like Schröder mostly declined that offer because the Lakers can offer more starting on Feb. 16, and can continue to do so until the 2021 offseason begins.

The Lakers can offer a starting salary of $18.6 million starting with the 2021-2022 season, which creates much more of a realistic opportunity for the Lakers, Schroder, and his agent, Alex Saratsis, to find a landing spot on a market-value extension with the Lakers.

If there’s no deal before the offseason, the Lakers possessed Schroder’s Bird Rights to go over the salary cap in re-signing him. To lose Schroder in free agency would leave the Lakers limited in replacing him, because they’d only have a $9.5 million midlevel exception available to use in free agency.

That would be an expensive extension, but it makes sense for the same reasons that giving Kyle Kuzma a three-year, $40 million extension made sense: Because the Lakers have already invested in Schröder, because they can’t easily replace him, and because they’re basically spent out anyway.

When the Lakers extended LeBron James and Anthony Davis before training camp, they nuked any chance they had at meaningful cap space until at least the summer of 2023. And that’s not a bad thing! Having LeBron and AD willingly play for your team is a great thing, even if its expensive. The side effect of that, though, is that the Lakers won’t have room under the salary cap to offer much to players who they don’t have the Bird rights for, thus making it hard to replace contributors who leave. With Kuzma, that meant giving him a just about starter-sized extension, and it could cost even more to keep Schröder, their actual current starter.

And similarly to Kuzma — who the Lakers invested development resources, scouting time and a draft pick on — the Lakers have also given up real assets to bring Schröder to Los Angeles, as he cost them their 2020 first-round draft pick and Danny Green. And even if you don’t like the latter’s game, at the bare minimum possessed a contract that was easy salary ballast for a big acquisition. If the Lakers gave that up and Schröder walks — and, as Woj describes, they only have about half of the cash to replace him that he’s seeking in a free agent market that will have no shortage of teams with ample space — then they won’t be able to come anywhere close to finding a player of his caliber. Schröder and his camp clearly know this, which is the main reason to turn down the Lakers’ initial offer aside from the team being able to theoretically offer more later.

So for now, it would seem this is a waiting game. And the Lakers will have to see how Schröder continues to play, too. If he were to hypothetically play until February while looking like a horrible fit next to James and Davis, then the team would probably be less hard-pressed to keep him.

But if Schröder produces on this team the way a player of his skillset and talent should be able to, it’s impossible to argue against giving him the money he wants, because at this point we aren’t talking about cap space ramifications. We’re talking about how much Jeanie Buss would be willing to pay in luxury tax, with no meaningful impact on the roster beyond that, and the only person who should care about that bill is the person having to pay it.

Basically, if Schröder looks good, there is no excuse not to keep him. The good news is that if he does, we know this is an ownership group that has always been happy to pay as much as it takes to compete for titles, something the recent extensions the Lakers already inked are just the latest evidence of. Today’s leak just seems to be both sides saying “okay, go ball out Dennis, and then we’ll talk in February.” And the fact that that’s where talks sit is a promising sign.

This developing story may update with more information. For more Lakers talk, subscribe to the Silver Screen and Roll podcast feed on iTunes, Spotify, Stitcher or Google Podcasts. You can follow Harrison on Twitter at @hmfaigen.