There are a series of notable elements surrounding the Wizards trading 2019 lottery pick Rui Hachimura to the Lakers for Kendrick Nunn and second-round picks, but one of the most fascinating is how this trade affects the Lakers’ 2023 offseason.
Heading into the Feb. 9 deadline, it appeared Rob Pelinka and the Lakers front office had a choice to make: Either maximize cap space for July by not trading Russell Westbrook or use his salary to take on a larger multi-season contract to stay over the cap for 2023- 24 and beyond. While it may seem at first that trading for a pending restricted free agent pushes the Lakers further towards the cap space path, that is actually incorrect because of how the NBA’s collective bargaining agreement handles cap holds.
The intention behind cap holds is to function as a placeholder for free agents that prevents their team from gaming the system by using cap space and then re-signing all of its own free agents. The CBA includes a detailed system of where to set the cap hold in each situation based on the player’s previous salary, contract and other factors. One of the groups with the largest jumps between previous salary and offseason cap hold are first-round picks, presumably on the logic that their previous salary is artificially restricted by the rookie scale and young players often improve quite a bit over those first four seasons.
In this case, that nuance means that while Hachimura only makes $6.3 million this season, he will count on the Lakers’ books at a whopping $18.8 million when the 2023 offseason begins.
A couple of important notes before we continue:
- Hachimura and the Lakers agreeing to a contract in July replaces that $18.8 million hold with his actual salary as soon as he signs the contract, so negotiating a lower salary than the hold increases the Lakers’ spending power if they still have cap space.
- That $18.8 million cap hold is the placeholder for the Lakers whether or not Hachimura fulfills the “starter criteria” because that CBA rule affects the size of his qualifying offer rather than the cap hold, which are not the same thing. For all intents and purposes, the only two ways for Hachimura to count for something other than $18.8 million on the Lakers’ books is him signing a new contract or the Lakers letting him go.
As a practical matter, that means the Lakers are replacing an empty roster spot charge of just over $1 million for Hachimura’s $18.8 million cap hold, so a preliminary assumption without knowing how the rest of the 2023 trade deadline goes is that it will be more difficult to use cap space over the summer while also retaining Hachimura.
That said, more difficult and impossible are not the same thing — the two sides could agree to a small enough contract that Pelinka could still sign his offseason priorities. Or he could see who says yes and, if the newcomer(s) represent a significant enough upgrade, simply withdraw Hachimura’s qualifying offer to remove his hold off the books and sign that other player in July. A notable example of that exact sequence was Danny Ainge eventually withdrawing Kelly Olynyk’s qualifying offer back in 2017 when Gordon Hayward decided to join the Celtics. It would be unfortunate for Hachimura, but it’s a part of the business. For his part, Hachimura is fully allowed to sign that estimated $7.6 million qualifying offer before the Lakers withdraw it to play for that salary and become an unrestricted free agent in 2024.
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The potential of letting Hachimura walk for a stronger free agent over the summer is why negotiating a modest asset cost to acquire him was so important for the Lakers. Giving up three future second-round picks for the opportunity to add a talented young player who should help their team now and mesh with their stars is a worthy gamble even if it ends up being a rental, particularly since Pelinka and the front office are the ones in control this summer. If Hachimura proves indispensable during the stretch run, great. You have match rights and can bring him back via a new contract, matching an offer sheet or Hachimura signing that qualifying offer. If Hachimura fails to deliver to their expectations, the Lakers can walk away having given up a few second-round selections.
Two other CBA/cap-related parts of this trade are worth going through:
• First, the logistics of Hachimura’s 2023-24 contract work differently for the Wizards and the Lakers, which may help explain part of why Washington’s Tommy Sheppard made this trade.
Unless both Kristaps Porziņģis and Kyle Kuzma opt-out AND leave the Wizards this summer, they will function as an over-the-cap team that will be at or over the luxury-tax line. As such, Hachimura’s $18.8 million cap hold does not really matter to the Wizards at all since they would be over the cap anyway. Instead, the key figure would have been Hachimura’s actual 2023-24 salary, as that is what would eventually count for luxury-tax purposes.
It would have been possible for Sheppard to realize it was impractical to retain Hachimura and then negotiate a sign-and-trade in July, but those are often for weak returns in the modern NBA, and some suitors would have been willing to just wait the Wizards out. While I would argue there are benefits for the additional control and optionality that the Wizards would have retained by keeping Hachimura, especially since Porziņģis and Kuzma can easily leave as free agents if they want, there at least is a clear rationale behind moving sooner rather than later even for what feels like a weak return.
• Second, the Lakers brought in Hachimura and reportedly having interest in re-signing him this summer, it makes sense for their front office to more thoroughly consider the over-the-cap route as we get closer to the deadline.
(Note: Since the extension window for players like Hachimura closed at the start of the regular season, a new agreement with the Lakers would be a free-agent contract rather than an extension. It’s a small detail but an important one since the rules are (very different for extensions and entirely new contracts.)
Even though the Lakers’ ability to retain some of their own pending free agents is less enticing based on how they have played this season, staying over still creates the capacity to have a deeper roster for 2023-24 and beyond. The key question is whether they can use Westbrook’s expiring contract to acquire someone who will make more of a difference this season and moving forward than the free agents they can realistically bring in this summer.
In almost every circumstance, I would be pushing hard for the team in question to add the salary now and stay over, but the Lakers are the Lakers, and the 2023 free-agent class has some notable players with connections to LeBron James in Kyrie Irving and (potentially) Draymond Green. If the Lakers *ahem* have an understanding or well-informed hope that a high-level player would be interested in coming abroad, they should obviously prioritize that.
It will be fascinating to see how Pelinka and the Lakers navigate the next two and a half weeks, and trading for Hachimura makes the dynamics even more fascinating.
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(Photo of Rui Hachimura and Anthony Davis: Geoff Burke / USA Today)
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