The Los Angeles Lakers are facing some difficult decisions this offseason. The team can't control what soon-to-be free agent center Dwight Howard will do on the open market, but general manager Mitch Kupchak does have some control over how the organization manages the salary cap situation and future obligations to Kobe Bryant, Pau Gasol and Metta World Peace in the face of a potentially enormous luxury tax burden. Kupchak just isn't sure what he wants to do yet.
The Lakers are tens of millions of dollars over the salary cap for 2013-14, but the franchise has yet to use the one-time amnesty provision provided under the new collective bargaining agreement to erase a player from the roster and the cap calculation, helping to ease the eight-to-nine-figure burden of looming luxury tax issues. Kupchak recently sat down with Mike Trudell of Lakers.com to talk about the offseason, and he was careful to not foreclose the option of using the amnesty provision this summer:
It's a tool that we're aware of. We have not decided if we will use it. It's just a tool we know is available. We feel our players have value, but there is always a financial component to this business and the new collective bargaining agreement made some significant changes that we need to be aware of.
The amnesty provision can only be used on a player who signed his contract prior to December 2011, so the Lakers have four players who are eligible to be amnestied: Kobe Bryant (one year and $30.5 million remaining on contract), Pau Gasol (one year, $19.3 million), Steve Blake (one year, $4 million) and Metta World Peace (one year, $7.7 million player option he's expected to exercise).
The issue goes far deeper than the salary figure for each player, however, which is why Kupchak is struggling to decide what to do. The actual savings in each case is only the potential luxury tax obligation -- the Lakers are still on the hook to pay the salary, and the value of any new deal the player signs is deducted from the obligation -- and the impact on the roster is important because L.A. has limited options to add new talent.
Kupchak likely can only use the mini-mid-level exception to add a free agent because the Lakers are in luxury tax range. That means it would be hard to replace World Peace and Blake in the event of an amnesty, and the lack of depth at those positions for the Lakers makes the decision especially difficult. The staff at Silver Screen and Roll discussed the issue and had trouble pulling the trigger on an amnesty for either player.
The most fiscally prudent decision would be to amnesty Kobe Bryant in the wake of his Achilles injury, but Tom Ziller has explained why that move is such a long shot. In short, Kobe's competitive nature could cause the situation to escalate beyond the basic salary cap numbers, and the risk of a war with a franchise icon simply isn't worth the gamble. Gasol is the other option, and an amnesty could save the team over $60 million in tax obligations, but he still has some trade value and could be used to bring in a better player than the Lakers could sign on the open market while still providing some cap relief.
If the Lakers don't make a move and instead pay the luxury tax for the third-straight season, the 2014-15 offseason will be especially interesting. They would be obligated to pay extremely harsh repeater taxes if they exceeded the luxury tax threshold again. It will be very interesting to see how Kupchak plans to shape the future of the franchise to avoid the repeater tax.