Talkin' Finances
Posted: Tue Jun 22, 2010 6:21 pm
From Forum Blue & Gold...
How the Lakers front office decides to move forward should be interesting to say the least. They need to bolster their bench without taking away any of the key guys.
Mr. Buss (the greatest owner in the world) has never been afraid of spending money to bring in the right guys, but it most be tough to keep taking it in the shorts.
I like the idea of signing Fish to the vet minimum. It makes financial sense for the Lakers. But lets hope that Fish is content with it as well. And since I see him as the ultimate "team guy" he probably will for the betterment of the team.
This was a great article on the financial state of the Lakers, it really put things into perspective for me. The Lakers definitely have some options in front of them and it will be very interesting to see how the best professional organization proceeds in the off-season.
First, some assumptions. If we assume that Adam Morrison’s rights are renounced (as certain as certain gets), Jordan Farmar’s rights are renounced ($2.8 mil), and Shannon Brown opts out ($2.2 mil), both of which are highly probable, the Lakers will have $81,728,202 in salary under contract (not including bonuses). The luxury tax will come in at around $68 million according to the NBA front office. Doing the quick math, this implies that the Lakers will have $109 million in player costs this upcoming season. This is a little bit less than last year’s $112 million, but it is also assuming that the Lakers don’t re-sign Derek Fisher, DJ Mbenga, or Josh Powell. Needless to say, the Lakers are taking it up the wazoo from the luxury tax, and every dollar that we spend is doubled (refer to Larry Coon’s Salary Cap FAQ for more details).
How the Lakers front office decides to move forward should be interesting to say the least. They need to bolster their bench without taking away any of the key guys.
This also includes the Mid-Level Exception, the only tool available to the Lakers to sign free agents due to being over the salary cap (way over in our case). The value of the MLE is dependent on the average salary of all NBA players, and usually floats somewhere between $5-6 million. In the case of the Lakers (and any team over the luxury tax), the use of the MLE is actually $10-12 million dollars due to the doubling effect of the luxury tax. So if the Lakers actually want to use the MLE, they’ll have to keep in mind that doing so puts them at $119-121 million dollars in player costs next season (and even moreso beyond).
Mr. Buss (the greatest owner in the world) has never been afraid of spending money to bring in the right guys, but it most be tough to keep taking it in the shorts.
Of the 6 players listed above, the one’s that I think are “most likely” to return are Derek Fisher and Josh Powell. As Kobe stated in his postgame interviews, Derek Fisher is the heart and soul of this team, and I find it difficult envisioning this Laker team without Fisher next year. Rest assured, Fisher won’t be signing for $7-8 million like the Fox11 crew were trying to shove down my throat. The minimum salary for a 10+ year veteran (Fisher is a 14 year veteran) will be $1.35 million, and the best part is that it doesn’t count against the luxury tax, so no doubling. I have an inkling that Fisher will be fine with $1.35 million, especially considering that other teams are not likely to pay him any more than that.
I like the idea of signing Fish to the vet minimum. It makes financial sense for the Lakers. But lets hope that Fish is content with it as well. And since I see him as the ultimate "team guy" he probably will for the betterment of the team.
Assuming the Lakers re-sign Derek Fisher and Josh Powell for their respective minimum salaries and they keep both 2nd round picks, that brings the Lakers total player costs to $112 million, exactly the same as last year’s player costs. (Update: The veteran’s minimum exception is only the amount above the 2-yr veteran’s minimum amount, so the Lakers still have to pay the 2-yr veteran’s minimum to both Fisher and Powell if this were to happen. Thus, the Lakers total player costs would actually be closer to $113-114 million. Thanks to Exick for the correction). This precludes, however, the usage of the Mid-Level Exception. The best thing about the Mid-Level Exception is that it can be broken up into pieces. If the Lakers only want to use $3 mil of the MLE, they can use that much and renounce the rest. Some names that have been brought up in the comments include Steve Blake, Dorell Wright, and Earl Watson in order to fill the void at PG that would result in Farmar and Brown’s simultaneous departure. Fisher is also not getting any younger, and the need to groom a suitable replacement grows more pressing with every year (although Fisher really knows how to turn it on during the playoffs). None of the three guys above deserves a full $5 million in my opinion, so I expect the Lakers to try and sign them or someone like them for a little less than that, say $3-4 million, and pocket the rest.
This was a great article on the financial state of the Lakers, it really put things into perspective for me. The Lakers definitely have some options in front of them and it will be very interesting to see how the best professional organization proceeds in the off-season.