With luxury taxes a big concern, could Metta World Peace opt out?
If the Lakers re-sign Dwight Howard this summer, the franchise is looking at a significant luxury tax payment for next season.
Luxury taxes stand to be a significant issue next season as the rates go up progressively as part of the new collective bargaining agreement. If the team’s payroll hovers around $100 million to $110 million, the Lakers could be paying $70 million to $119 million in taxes.
The bill for this season is $129 million, including tax (for a team struggling to make the playoffs). It’s far-fetched to expect the Lakers to shell out $170 million to $229 million on essentially the same roster next season.
They’re going to have to cut somewhere.
According to Scott Howard-Cooper of NBA.com, Metta World Peace may help make the decision easier by opting out of the final $7.7 million of his contract.
“I think my agent is trying to see if he can get an extension to stay here in L.A.,” World Peace said to NBA.com. “I’m really excited about the possibilities of staying here in L.A.”
If World Peace opts out, the Lakers might be able to re-sign him at a lower rate -- or let him walk as a free agent.
That would free up the team’s amnesty clause for another player. The one-time exception allows teams to shed a single player from their books (including luxury tax). The player still gets paid their full contract; they are eligible only if they were on the team’s roster before July 2011.
Kobe Bryant, Pau Gasol, Steve Blake and World Peace are the four Lakers who would qualify. It’s extremely unlikely that Bryant would be cut. The team is more likely to try and trade Gasol.
World Peace is more likely to forgo his early termination option. He and Blake are realistic amnesty options.
The path ahead isn’t clear though. Howard hasn’t committed long term. World Peace has to decide what he wants to do with his contract.
The franchise has to seriously consider how much its willing to pay to field a team built around Steve Nash, Bryant, Howard and Gasol. The trade market could alter the picture significantly, especially with Gasol.
In the meantime, the Lakers are struggling to hold on to the eighth seeding in the Western Conference.
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Email Eric Pincus at eric.pincus@gmail.com and follow him on Twitter @EricPincus.
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