How LeBron James actually limits his options by opting out of his contract

How LeBron James actually limits his options by opting out of his contract

How LeBron James actually limits his options by opting out of his contract
NBA

How LeBron James actually limits his options by opting out of his contract

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f he opts out, he likely only has three real options. If he opts in, he could force a trade anywhere.

The first big plot point in the third installment of the LeBron James free agency trilogy will be resolved by 12:01 a.m. on June 29. That’s the deadline for LeBron to decide whether to opt out of the final year of his contract and officially join the free agent party.

In the past, this decision was a mere formality and told us nothing about his free-agent plans. Jameswas deciding between making less annual money for only one additional season, or securing the option to sign for more money — either via a long-term contract or a two-year deal with a player option the second year for maximum flexibility. Of course James and any other player in this situation would opt out when given the choice.

Thanks to a variety of circumstances, this year’s opt-out decision is different. What James decides to do by midnight on June 29 will have a significant effect on this season’s chase. It could either narrow the field significantly, or potentially resolve the offseason’s biggest question before it even begins.

Unless you’re a 76ers, Lakers, or Cavaliers fan, you should hope LeBron opts in, not out.

Why is opting in a viable scenario? Thank Chris Paul
Last summer, Paul faced a dilemma. He was set on teaming up with James Harden on the Houston Rockets, but the Rockets lacked cap space to sign him.

That seemed to close the door on a potential union, as some idiot wrote. To create enough cap space to sign Paul, Houston needed to trim at least $25 million in long-term salary in a matter of days, and no team was going to take that much money into their open cap space without inflicting a ton of pain in the form of future assets.

But Paul found a unique way to make his journey to Houston happen. Rather than going through the formality of opting out and officially becoming a free agent, Paul opted in to help engineer a trade. All Houston needed to do was cobble together enough salary to match the $25 million Paul had left on the final year of his contract.

General manager Daryl Morey did so in amusing fashion, collecting an army of non-guaranteed contracts to pair with Patrick Beverley, Lou Williams, Sam Dekker, Montrezl Harrell, and next year’s first-round pick. The Clippers, not wanting to lose Paul for nothing, accepted the trade. That’s how Paul set up a trade to Houston and enabled the Rockets to maintain the mid-level exception to sign P.J. Tucker.

A year later, Paul is a free agent, but he’s expected to sign a long-term maximum contract to stay with Houston. That’s how he was able to find a unique way to choose the team he wanted in free agency, even if that team didn’t have enough cap space to sign him.

LeBron can do the same ... but only until June 29
If LeBron wants his pick of any of the 29 other teams in the NBA, he can pull the same move Paul did. He could tell the Cavaliers of his intentions to go elsewhere and give them his preferred new destination. Cleveland would then have a choice: call LeBron’s bluff and risk losing him for nothing in free agency, or accept a trade package back for a player leaving anyway.

Most teams would choose Option 2.

If the Cavaliers did that, they’d negotiate a legal trade package with LeBron’s preferred team, using James’ $35.6 million player option as the salary they must match. Any team could theoretically do that, though some can do it easier than others.

But what if LeBron opts out?
Then we’ll have a much better idea where he’s going. Opting out effectively limits the field to the following teams: Lakers, Sixers, and Cavaliers.

The Lakers and 76ers are the only teams in the LeBron hunt with the cap space to sign him outright, and the Cavaliers have Bird Rights. None of the other potential LeBron destinations have enough cap space to give LeBron a maximum contract beginning at 35 percent of the salary cap.

That includes the Rockets, who will gladly take LeBron despite James Harden’s words after the NBA awards ceremony. Houston is well over the salary cap even before making decisions on Paul and Clint Capela. Even trading Ryan Anderson while taking no salary back won’t get them close enough to sign James outright.

It also includes the Celtics, Spurs, Heat, Clippers, and any other wild card LeBron destination.

Sign-and-trade scenarios are technically possible, but unlikely. Any team that executes a sign-and-trade cannot end up with a team salary more than $6 million above the luxury tax due to NBA rules. That’d make it difficult for James’ new team to fill out its roster, so it makes little sense for them wait and trade for James later when they could trade for James before he opts out and maintain that flexibility. In the case of the Rockets, a sign-and-trade is functionally impossible because they also need to re-sign Paul and Capela.

Any team without cap space has to hope that LeBron opts in as a means of engineering a trade there. If LeBron opts out, they are almost certainly out of the running.

That’s why James’ decision to opt out is no mere formality this time around. If he opts in, he’s either already made his decision to engineer a trade to a team without cap space, or the field remains wide open.

But if he opts out, this becomes a three-team race.