On Wednesday, July 11, the Los Angeles Lakers officially signed point guard Steve Nash to a three-year deal worth close to $27 million. The team now features Nash, Kobe Bryant, Pau Gasol, and Andrew Bynum in its starting lineup. Unfortunately, those four players' contracts combined put the team over the salary cap for next season.
Understanding the salary cap
Under the old collective bargaining agreement (CBA), it wouldn't have been a big deal for the Lakers to maintain a payroll higher than the salary cap. As shown by ESPN's Larry Coon, the team had a $19.9 million luxury tax bill in 2011. However, if the updated luxury tax system had been in place for last season, the Lakers would have owed $44.68 million. That's one reason why the team was busy trying to reduce payroll throughout the past seven months. The 2011 CBA made it far more difficult for free-spending clubs to sign the players they want.
The current Lakers
The Lakers have a lot of decisions to make about their roster for 2012-2013. In addition to the estimated $72.3 million they are paying Bryant, Gasol, Nash, and Bynum, the Lakers have another $14.35 million invested in Metta World Peace, Steve Blake, and Josh McRoberts. That puts the payroll at $86.65 million, which is close to $16 million over the luxury tax threshold, and that's not including the remaining players on the roster.
That's why I think Lakers fans should be careful with their expectations for next season. General manager Mitch Kupchak has proven that he's still willing to bring in star players, but that might mean putting an even weaker bench on the floor than last season.
Of course, Bryant and Nash might be able to convince some free agents to take a pay cut for a chance to win a title in Los Angeles. The Miami Heat were able to sign veteran players at below market value after Chris Bosh and LeBron James joined the team two years ago. There's reason to believe that could happen with the Lakers. It's something to keep an eye on.
Even if the Lakers are able to piece together a decent bench for next season, the CBA will pose further issues for them in 2013-2014 if they don't get out of the luxury tax threshold. That's when the incremental tax portion of the new CBA takes effect, which would more than double the Lakers' luxury tax. I can see the team paying it for one year if it means winning a title, but I'd expect the Lakers to clean house when the 2014 season is over. If not, the team runs the risk of becoming a repeat salary cap offender, which would raise its luxury tax bill even higher. For example, Coon noted that if the Lakers entered the 2011 season as a repeat offender under the new CBA, they would have owed $64.58 million. That's a far cry from the $19.9 million they actually paid.
None of this is meant to scare Lakers fans. I'm sure that Kupchak will figure everything out and keep the club contending well into the future. However, Lakers fans had better enjoy the next two seasons with this team because changes are coming sooner rather than later.
Derek Ciapala has been a fan of the Los Angeles Lakers since childhood. His favorite Lakers' moment is when they beat the Detroit Pistons 108-105 in Game 7 of the 1988 NBA Finals. You can follow him on Twitter @dciapala or on Facebook.