The LA Lakers will have max cap room available to pursue a max-talent free agent this summer. Yes they will. The trade for Anthony Davis is not a barrier.

We know you’ve heard otherwise. But we have the goods. We explain below.

On Saturday, the NBA world heard that an agreement had been reached in which Anthony Davis is going to be traded from New Orleans to the Lakers in July, for a package of players and draft picks. Exciting NBA news. The trade was agreed to, but put on the shelf until early July when the teams would have the needed NBA salary cap latitude to do it, and could then submit it to the league for approval.

AFTER THE TRADE, THEN WHAT?

In the wake of that, questions arose as to what the Lakers might then be able to do in free agency. A quick analysis of their cap room, if adding Davis contract (including the 15% trade bonus he will be able to get as part of the deal) and subtracting the others, showed about $23.7 in spending room would remain.

However, at that point the what-if’s began. Could they somehow increase that to max cap room for the 30% free agent class, $32.7M? If yes, the Lakers with max cap room to chase an elite free agent would have a significant ripple effect across the entirety of the upcoming free agency that begins July 1.

One way to increase the amount was to reduce Davis’ salary, by having him waive his trade bonus. That would add about $4M in spending room. They could also whittle down the existing amounts already on the books by trading away some of the minor contracts, and add more. Keeping only Lebron James, Davis, and prized youngster Kyle Kuzma, along with the waiving of the trade bonus, could get them to $29.4 in spending room. A lot more, but still significantly short of max room.

THE “30-DAY WAIT” IDEA

A workaround to get to the $32.7M room was there, however. It was mentioned by many (including me) in those initial hours after the agreement was leaked. And here’s an explanation of that idea.

Instead of sending Davis to the Pelicans and using available cap room to absorb his salary, they could do a trade using matching salary, after the cap room was already spent. The salaries of the 3 players being sent to New Orleans wouldn’t add up to enough to match Davis using the NBA’s 125% rule, but if the $7.06M salary of the player the Lakers will be picking at #4 in this draft could be included, there would be enough.

That added an extra wrinkle. A player who has been drafted counts $0 until he is signed. But if you sign him, you have to wait 30 days before you can include him in a trade. So it was theorized that LA might be intending to wait until early August to consummate the deal, to give them time to find and sign a max free agent, sign pick #4, and then wait out the 30 days.

However, that idea was put to bed by Woj who said that the Pelicans are expecting to do the trade on or about July 6. And since then, with no possible delay in the works, the media talk has been about the Lakers $24M spending room and how they plan to use it to fill out their roster.

BUT WAIT ….

At the same time, however, I was hearing from a reliable league source that the Lakers already had the needed latitude in place to (a) pursue a max-caliber free agent in July with max money, (b) if successful, then get the trade with the Pelicans revised as needed, and (c) get Davis to waive some or all of his trade bonus as needed.

In other words, I was being told LA was already set to be in business with max cap room if they found a taker. And, I was told, the target will be Kawhi Leonard or Jimmy Butler, with the Lakers confident they can land one or the other.

The reports by Woj and others haven’t changed, however. We’re still hearing July 6 and $24M of spending room. All of that is set in stone, more or less. Or so we’re told.

But it’s not quite right.

THE ANSWER

We have figured out what the Lakers already know.

The Lakers will pursue and can sign a max free agent, and still do the trade with New Orleans for AD on July 6. Period.

Yes, all of it.

Whether they will be successful is unknown, of course. But it’s very doable.

Ignore the $24M spending limit reports. They are based off of the information that the deal won’t wait 30 days and will happen about July 6 (which is true) and the ensuing assumption that this means they can only have $24M to offer (false).

LA will be on the prowl for a max-level player on June 30, with the money needed to do the deal.

HOW WOULD IT WORK?

The Lakers path looks like this.

1) They will chase some player with a max salary offer. If successful, here’s where it will go next.

2) They will inform New Orleans that they will need to alter the AD trade slightly. I’m told this possibility was part of the trade discussion and agreement already in place, and New Orleans has been given latitude by the Lakers as well, allowing them to explore their own add-on trades that include pick 4 (due to them from LA) to go to another team to select in this week’s draft and maybe other pieces.

What alteration? They will let them know they will be adding a third team to the AD deal. Nothing will change between LA and NO, but by rule every pair of teams in a 3-way deal has to do a transaction with each other. So New Orleans and the other team will also have to do some transaction too. But it can be minor, as small as including a fake 2nd round pick, as we call them, or non-NBA “draft rights” on the books, most likely going both ways. Something. And if NO does a side deal of its own, then the Lakers will be doing the same sort of accommodation.

3) After that, the Lakers will find a team to take most of the other non-Lebron pieces under contract, to trade them away with no salary coming back. Maybe the players will be eagerly grabbed by teams, or maybe the Lakers will have to add a bribe with side value. But in any event, it should be very doable with such small salaries. And if it becomes a bit of a challenge, surely a Kuzma-Wagner package with a 2nd-rounder attached would have plenty of willing takers.

Which players? That part is hazy and flexible. Their available choices would be Mo Wagner, Kyle Kuzma, Ike Bonga, and Jemerrio Jones. Not all of them would be needed, but at least 2-3 based on salary. And each choice brings side issues to navigate with pluses and minuses. (We’ll explain below.)

4) Once the players are decided on, and a trade partner for them obtained, a trade for AD at that point would be immediately doable! No waiting. How? By including that secondary trade as part of the trade of AD to LA, making it a 3-way deal. .

AD will still go to LA, the same players as before will go from LA to NO, but now another set of players will go from LA to an as-yet unknown team, all in a 3-way deal.

5) How would it work? Right now, the Lakers are planning to send Ball, Ingram, and Hart to the Pelicans, and their combined salaries total $17.9M. It will take $21.5M to “trade-match” AD’s base salary of $27.1M (with no trade bonus). So with AD amenable to waive his bonus as needed, LA only needs another $3.6M of outgoing salary (to somewhere) in that trade and it doesn’t necessarily have to all go to New Orleans. With choices of Wagner ($2.1M), Kuzma ($2.0M), Bonga ($1.4M), and Jones ($1.4M), LA has more than enough available to make it work.

The math works. And with that, everything I’ve been hearing about the Lakers plans is right on target.

They will have max cap room if they need it, AD may be asked to waive his bonus, and the targets in free agency are going to be the best of the best.

LA will have max money if they need it.

THE VARIABLES IN THE LAKERS POSSIBLE PATH TO MAX ROOM

It must be noted that there are some variables in that solution, that lead to different players being included in that secondary trade scenario. And the solutions to these variables overlap a bit, so that each has some pluses and minuses that somewhat conflict. Decisions will have to be made.

1) The “salary cap” variable – At this point, the NBA’s salary cap for 2019-20 is projected to be $109M. We have used that number in our calculations to determine max salary, salary commitments, LA cap room, and so on, but the actual cap may land at a number that’s higher or lower, which would alter the landscape a bit. The expectations are for the actual cap to be close to that number, but it is uncertain.

2) The “max salary” variable – At the moment, in their “best case” scenario, LA could have $32.54M in cap room, which is a tad short of $32.7M max room. Getting to $32.54M assumes the waiver of the non-guaranteed salary for Jones. They could clear a bit more room – past max salary – by trading Bonga away somewhere before signing the free agent and then trading for Davis.

Or if they keep both Bonga and Jones, the deal for a “max” free agent could only start at $32.02M.

3) The “keeping Kuzma” variable – One issue the Lakers will have to consider is whether it’s crucial to keep Kuzma. He has been highly praised by them (although it might have been trade talk puffery). But if he’s somehow important to them, and they plan to keep him at the end of the day, then they will have no choice but to retain both Bonga and Jones and ask the “max” player to take less.

On the other hand, it’s possible that getting a taker for their package of random outgoing players will require the inclusion of Kuzma as the prize. Or, might the Lakers decide that they can include him and net a useful pick when trading away the small-salary pieces? There will be negotiations and choices.

4) The “trade kicker” variable – One of the crucial aspects in making this work will be Davis waiving some or all of his $4.06M trade bonus. But the moving parts will determine how much he has to give up, with him getting more bonus when more salary is included in the trade. So if all 4 of Wagner, Kuzma, Bonga, and Jones are part of that deal (going to another team), he will get $4.0M of his bonus. But at the other end, with fewer players, he could be asked to take only $0.5M. It’s all connected.

That means the trade bonus comes at the expense of the free agent getting max money, and vice versa. And if Kuzma stays with the Lakers, it comes at the expense of both AD (who only gets $1.5M of his bonus) and the free agent (whise salary starts at only $32.02M, not $32.7M.)

5) The Jones “non-guaranteed salary” variable – At the present time, Jones’ salary is not guaranteed at all, and he can be waived at no cost. As we’ve already noted, waiving him allows room to pay a higher salary to the max-level player, but also alters the options for the secondary trade (Kuzma would have to be included, no choice) and lowers the bonus available for AD.

As an aside, non-guaranteed salary doesn’t count for the salary match in a trade. But if he is needed, that obstacle would simply be erased by the Lakers guaranteeing the contract at that point.

What precise path will the Lakers choose? Who knows? As a Dallas Mavericks follower, I would hope they strike out on the max guys (leaving one of them, like Kemba Walker to Dallas), and simply keep their players and stick to the $24M of spending. But assuming they find a guy, their path will probably be somewhere in the middle, and it will be up to the Lakers and the players involved to figure out what works.

But somewhere in there is a path. The Lakers will have MAX cap room to spend and pursue a max-level talent in free agency. That much is certain. There will definitely be one more major player in free agency this summer chasing elite free agents, and the fun will be starting soon!