Why LeBron James’ Contract Is Hurting Lakers’ Title Hopes

The Los Angeles Lakers won an NBA championship with LeBron James in the 2020 Orlando Bubble, but if they hope to win another title in the future with the four-time MVP, he should consider taking less money.

Lakers Are Projected To Be $1.3 Million Over Luxury Tax

James, who turns 41 in December, has a $52.6 million player option and again can enter free agency. This is part of the two-year, $101.35 million deal that he signed last July.

Both Dorian Finney-Smith and James have until June 29 to opt in for next season. Finney-Smith’s option is worth $15.37 million, and his deal includes a 5% trade bonus.

If James opts in or signs a new contract with a comparable starting salary this summer, the Lakers will be $1.3 million over the luxury tax, per ESPN’s Bobby Marks.

This means the Lakers should be thinking about their future with Luka Doncic, not James. No one knows when James is finally going to retire, but one thing an organization should never do is settle for mediocrity.

The Lakers’ goal should be winning a championship, not just making the playoffs.

LeBron James Must Make Sacrifice For Lakers To Improve Roster

If James does decline his player option, he is allowed to sign up to a three-year, $175.3 million contract with L.A. The 21-time All-NBA member has signed four contracts since 2018, with only one longer than two years.

In addition, the Lakers are $6.7 million below the first apron and will only have access to their $5.7 million non-tax mid-level exception. However, they do have flexibility to aggregate contracts in a trade.

Sam Quinn of CBS Sports also explained last week why James should take less than the max salary next season.

“The Lakers, as currently constructed, have a ways to go before they can credibly compete for the 2026 championship,” Quinn wrote. “If they are going to do so, they need to improve their roster substantially, and their easiest path to improving the roster substantially involves James making a substantial sacrifice.

“He might be understandably gun-shy about doing so because he’s seen previous employers waste similar sacrifices in the past, but if he wants to maximize his chances at winning one more title, that’s the one tool available at his disposal to do so.”

Lakers Need Cap Flexibility To Sign Free Agents

If the Lakers are able to stay below the first apron, they would have the $5.7 million taxpayer mid-level exception to use in free agency instead of the $14.1 million full mid-level exception.

That would also unlock the bi-annual exception, worth around $5.1 million, to spend on another free agent. It would essentially give them more flexibility to acquire free agents via sign-and-trades.

According to Marks, L.A. owes Utah a 2027 top-4 protected first-round pick and Dallas an unprotected first in 2029. The Lakers are allowed to trade one first-round pick in either 2031 or 2032.

Los Angeles does have the right to swap firsts in five seasons (2026, 2028, 2030, 2031, and 2032) and have one second-round pick available to trade.

LeBron James Was Willing To Slash Salary By Nearly $15 Million In 2024

There’s only so much the Lakers can do to accommodate the contracts of James and Doncic while upgrading the roster and retaining key role players.

Last year, James placed more of a priority on improving the Lakers roster, offering nearly a $15 million pay cut, but it’s unclear if the future Hall of Famer is willing to do the same this offseason.

“He is prioritizing a roster improvement,” James’ agent, Rich Paul, told ESPN’s Dave McMenamin in June 2024. “He’s been adamant about exuding all efforts to improve the roster.”

Doncic is not a free agent but is eligible to sign up to a four-year, $229 million extension on Aug. 2. If for whatever reason a contract is not reached, Doncic will become a free agent in the summer of 2026.

Lakers Must Prioritize Re-Signing Luka Doncic

What if Doncic decides to leave? The Lakers will have to do everything they can to build a title contender around the Slovenian superstar this summer because otherwise, it makes little sense for him to stay.

Doncic could be offered a four-year, $229 million max deal. Such a contract would have the $51 million first-year salary for 2026-27 replace the player option for that season.

Per Spotrac, the more likely deal is a three-year, $165 million extension that includes a player option in the third year. That potential contract seems possible for the purple and gold.

According to ESPN’s Shams Charania, the short-term extension allows Doncic to “reenter free agency sooner and potentially recoup the $345 million he lost when he was traded from the Mavericks.”

Lakers Have Over $70 Million In Expiring Contracts

The Lakers tried to acquire Charlotte Hornets center Mark Williams at the deadline to provide Doncic with a lob threat and to help L.A. replace Anthony Davis, but the trade was rescinded after a failed physical.

Although Williams’ failed physical was not LeBron James’ fault, more cap space would have helped the Lakers to upgrade the roster in previous trade and free-agent pursuits.

For example, the Indiana Pacers are expected to re-sign free agent center Myles Turner after the NBA Finals, and that’s just one player L.A. simply cannot afford to add.

The Lakers have a 2031 first-round pick, five years of pick swaps, former first-round pick Dalton Knecht, and over $70 million in expiring contracts from players like Finney-Smith, Rui Hachimura, Maxi Kleber, and Gabe Vincent to use in a trade.

Having said that, it would be unwise for L.A. to trade away some of its key pieces.

The maximum extension the Lakers can offer Austin Reaves is four years, $89.2 million. Per Marks, the first-year salary of $19.9 million is 140% of the average player salary, the maximum allowed under the CBA.