Next year’s luxury tax could lead Lakers to make moves this season
The Lakers are on the hook for about $30 million in luxury tax this season. Compared with what they may pay next season, that’s almost nothing.
The league’s new collective bargaining agreement includes a graduated tax that kicks in for the 2013-14 season. For every additional $5 million the team is over the tax threshold, the rate increases.
Naturally the team has every hope and intention of re-signing free agent Dwight Howard. Assuming he does, the Lakers can pay him up to $20.5 million for next season.
Exactly how much the team will spend on payroll is impossible to say, but a reasonable estimate, with Howard re-signing and the Lakers keeping most of the existing roster together, is $103 million.
The current tax threshold is $70.3 million. If it climbs by 5% to $73.8 million, the Lakers would owe approximately $81.5 million in tax.
That’s an increase of more than $50 million from what the team is currently paying.
The Lakers might be able to find ways to reduce payroll. The team still has the ability to amnesty a single player, waiving him completely off the books (although the salary is still paid out).
The team can also look to make trades before then. Given how much salary Pau Gasol represents, he is a realistic candidate to be moved for economic reasons.
If the Lakers think Gasol’s value on the court will make the team a true contender, they’ll foot the full tax bill for next season. Based on the early returns this season, Gasol may be moved by the deadline.
In most cases the Lakers would have to take significant salary back in return for Gasol. Before the Feb. 21 deadline, the team might look to acquire players on the final year of their contracts, expiring before next season’s tax time bomb.
It may be difficult for the Lakers to make a deal after this season that will significantly reduce salary for 2013-14.
The team is certainly open to keeping Gasol, with hopes the team as is can make a major resurgence once he and Steve Nash return.
Conversely, the Lakers will consider opportunities that add depth, youth, athleticism and financial flexibility before next season’s tax bill goes through the roof.
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