What the Lakers and Knicks do with their aging veterans could be the difference in a loaded free agency pool next summer.
Lakers forward Luol Deng and Knicks center Joakim Noah are two different players connected by one tricky set of financial circumstances. Both were handed exorbitant contracts in the summer of 2016, and both haven’t lived up to the salary they seized at the tail end of their careers.
Both also have contracts that handicap their teams entering a critical 2019 free agency, one that could potentially send multiple franchise-altering talents to the two biggest markets in the country: New York and Los Angeles.
Here’s how it shakes down.
2019 free agency snapshot
Projected salary cap: $109 million
Knicks projected payroll: $70.2 million
Lakers projected payroll: $81.3 million
Year 1 of a max contract: $32.7 million
Note: These numbers are estimates based on cap projections that will likely change slightly before next summer.
The biggest names in the 2019 free agency pool are Kevin Durant, Kyrie Irving, Klay Thompson, Kawhi Leonard, Jimmy Butler, and Kemba Walker. A max contract for a player with seven to nine years of NBA experience projects to pay around 33 million, depending on the final salary cap level.
To give themselves maximum flexibility to add multiple stars, the Knicks and the Lakers need to shed more salary. The Clippers and Nets could also have space to add multiple star free agents, making this battle between Los Angeles and New York even more fun.
The question isn’t whether the Lakers and Knicks need to create cap space, though. It’s how they decide to do it.
Here are their options.
Option 1: A salary dump
This is the least likely scenario given both Noah and Deng’s declining productivity in the latter stage of their career. A salary dump would mean giving up future draft picks and/or young prospects to sweeten a deal with a team that’ll absorb the contract without giving much salary in return.
The Sacramento Kings are the last team with significant 2018 cap space remaining at this point in the offseason, and they still need to come up with almost $9 million to match salary in a trade.
Because both Deng and Noah have two years remaining on their deals, the Knicks and Lakers could also deal with teams willing to trade expiring contracts.
Option 2: Use the Stretch provision Deng or Noah before Aug. 31
The Stretch Provision allows a team to waive a player and spread the total amount of the player’s contract over twice as many years as the duration of the contract, plus one year. Aug. 31 is the deadline to make the move for this cap season.
For Deng, that means $38.1 million stretched over five years, equating to a dead cap hit of $7.62 million every year through 2023. For Noah, that amount is similar: a $7.565 million cap hit every year over five years.
Doing so would save both the Knicks and Lakers about $11 million in cap space next summer. New York would have $46 million plus the room exception to sign free agents. Los Angeles would be just a hair under max money with $34.4 million in available salary plus the room exception, which can be renounced if a team chooses to do so.
This is adequate for the Lakers, who only need to add one star alongside LeBron James while banking on Brandon Ingram, Kyle Kuzma, Lonzo Ball, or Josh Hart to develop into the third star of the team. But if the Knicks hope to land two stars in 2019, stretching Noah before the Aug. 31 deadline isn’t enough. They’ll have to still trade Tim Hardaway or Courtney Lee’s contract elsewhere while taking little-to-no salary back in return.
Option 3: Use the Stretch provision on Deng or Noah after Aug. 31
According to the league’s collective bargaining agreement, if a player is waived and stretched afterAug. 31, the first year of his salary is paid according to its normal schedule, and the remaining years are stretched over twice as many years, plus one.
So the Lakers could pay Deng the full $18 million this season while stretching the remaining $18.8 million at $6.27 million a year over the following three years. The Knicks, similarly, could pay Noah $18.5 million in the 2018-19 season and stretch the $19.295 million due in the final year of his deal at $6.43 million a year over the following three years.
Reducing Deng and Noah’s cap hit to under $7 million apiece would give the Lakers $35.7 million in cap space — enough to sign a max free agent — plus keep their room mid-level exception, and leave the Knicks with $47 million: still not enough to sign a second max player.
If the Knicks don’t waive Noah by Aug. 31, the only difference in stretching his contract on Sept. 1 and July 1 is another season of his presence in the locker room.
The Lakers are in decent shape regardless
They can choose to dump Deng’s contract, stretch his contract now, or stretch his contract later. Los Angeles has the best player in the world and a group of hungry young players who can step up and help him. They only need one more star to morph into a legitimate title contender. No matter which way they choose to do so, they’ll have cap space to sign one superstar next summer.
The Knicks, though? They have more numbers to crunch
If New York wants to snag two max free agents like Butler and Irving, it’ll take more than just shedding the rest of Noah’s contract. They’ll need to be creative in ways to shed even more money — like finding a new home for Lee or Hardaway Jr. without paying much in return — and they’ll have to sacrifice potential lottery picks to do so.
Scared money don’t make no money, though. If the Knicks are going to reclaim the prominence they haven’t held in decades, it starts with betting on themselves. They could stick to the plan, build through the draft and have a young team that grinds out over the years. Or, they could push fast forward and trade future draft picks to make a huge splash in free agency next summer.
New York’s process starts with shedding Noah’s contract to create that cap space. Whether that happens via stretch, before or after Aug. 31, or in a cap dump trade, that’s the first step. The Knicks have their options to create cap space and land two sharks in next year’s pool.
Whatever happens, New York and Los Angeles are making free agency fun a year ahead of time. The rivalry the NBA has been yearning for for years could be on its way back.