LeBron James has agreed to a two-year, $97.1 million extension with the Los Angeles Lakers, according to Adrian Wojnarowski. The deal will raise his career earnings to $532 million, which would give him the highest career earnings in NBA history by far. It will also include a 15 percent trade bonus and a player option for the 2024-25 season.
Here we look at the deal and what it means for James and the Lakers going forward.
The contract and what it means for LeBron James
The cap hits for James in his extension are projected at $46.7 million in 2023-24, and $50.4 million in 2024-25. This is the most likely amount he will receive in his extension since he is projected to earn more than his maximum salary amount going forward. It’s structured by giving James a 5 percent raise from his $44.5 million salary in the upcoming 2022-23 season, followed by an 8 percent raise from his $46.7 million salary in 2023-24.
Extension rules allow for a 20 percent raise on the first-year salary, which would technically allow James to earn up to $111 million over the next two years instead of $97.1 million. The 2023-24 salary cap is currently projected at $133 million, so while it’s possible he could earn more than $97.1 million if the cap ends up bring higher than $133 million, it’s unlikely to rise high enough for him to earn $111 million.
Because James’ extension goes beyond the limits of extend-and-trade rules, he cannot be traded for six months. Last year, the NBA trade deadline was on February 10, 2022, and it seems like a good bet that this season’s deadline will fall around that time. Because six months from now will take us past what will likely be the 2023 trade deadline, James cannot be traded during the 2022-23 regular season. Had he taken a 5 percent raise on the second year of his extension, giving him a total of $95.7 million instead of $97.1 million, he would retain his trade eligibility.
Due to the Over-38 rule, James was limited to adding just two years in an extension. This is because the rule limits players to three-year deals that take them past their 38th birthday, which includes the current season if it’s an extension.
What this means for the Lakers
In our offseason preview for the Lakers, we mentioned how it seemed likely that they would offer James his maximum extension amount as soon as he became extension-eligible. This is largely based on their history of taking care of their star players, and they weren’t going to make an exception to the player who led them to their first title in a decade. The franchise is always looking to acquire stars in free agency, and some star player may have just been convinced by this gesture to sign with them in the future.
The Lakers were projected to generate over $60 million in 2023 cap space prior to this extension. That figure could’ve topped $70 million if Talen Horton-Tucker declined his player option or they trade him. Now they might be capped out as James extension limits them to just under $20 million in 2023 cap space, which could get close to $30 million with Horton-Tucker out of the picture.
The maximum starting salary in 2023-24 for players with 7-9 years of service is currently projected at $39.9 million. They won’t be able to generate that amount of cap space with both James and Anthony Davis on the roster, which could price them out of next year’s top free agents. Because of this, their best shot at acquiring an All-Star level player will likely be via trade. Had James entered free agency in 2023 and re-signed on a one-plus-one at a significant discount like James Harden just did with the Sixers, then the Lakers could’ve had maximum space while potentially being able to get James back on a maximum contract in 2024.
With James committing to the Lakers at least through 2023-24, it should be an indication that both parties are aligned and whatever happened back in All-Star weekend in Cleveland is behind them. It could also be an indication that perhaps the Lakers are close to making a significant change to the roster. It’s no secret they’ve been shopping Russell Westbrook’s expiring salary with future draft picks for players that could help improve their title odds, such as Kyrie Irving.