The Lakers are still in line to have upward of $60 million in cap space next offseason, even after signing Luka to a max extension.
Luka Dončić became eligible to sign an extension with the Lakers on Saturday, and he didn’t waste any time coming to terms on a new deal. As expected, he signed a three-year maximum contract extension with a third-year player option.
We won’t know the exact starting salary of Dončić’s new extension until the NBA sets the 2026-27 salary cap next summer. However, the league’s initial projection is that the cap will increase by 7% rather than the full 10% it’s allowed to rise, according to ESPN’s Bobby Marks. If it rises by exactly 7%, it would land at $165,472,000, which is the number we’ll be working off here.
Based on that cap figure, Dončić’s extension would begin at $49,641,600, which is 30% of the salary cap. If the cap does go up a full 10% to $170.1 million, Dončić’s new deal would start at $51 million instead. Either way, the Lakers are positioned to have significant flexibility if this winds up being LeBron James’ last year in the purple and gold.
As of now, the Lakers have only four players under guaranteed contract beyond the 2025-26 season: Dončić, Jarred Vanderbilt ($12.4 million), Jake LaRavia ($6 million) and Adou Thiero ($2.2 million). They also have a $4.2 million team option on Dalton Knecht, which they figure to pick up unless they need to maximize every dollar of their financial flexibility, and roughly $1.25 million of Bronny James’ $2.3 million salary is guaranteed.
The big wild card, other than LeBron, is Austin Reaves, who reportedly turned down the Lakers’ four-year, $89.2 million max extension offer earlier this summer. That was a purely financial decision, as he stands to make far more as a free agent next offseason. However, the Lakers could stand to benefit from not locking Reaves in yet as well.
As long as Reaves’ 2025-26 salary ($13.9 million) is above the league’s average salary, his free-agent cap hold next summer will be 150% of his previous salary, or $20.9 million. He’s reportedly expected to seek an annual salary north of $30 million on his next contract.
Since the Lakers have full Bird rights on Reaves, they can keep his $20.9 million cap hold on their books, spend the rest of their cap space and then re-sign him despite being over the salary cap. That’s exactly what the Philadelphia 76ers did with Tyrese Maxey during the 2024 offseason, although their splurge on Paul George blew up in their faces spectacularly.
So, if Dončić’s new extension begins at $49.6 million, they keep Reaves’ $20.9 million cap hold on their books and the Lakers don’t trade any of Vanderbilt, LaRavia, Thiero or Bronny, they’ll go into next offseason with at least $97.6 million in salary on their books. That isn’t counting the six incomplete roster charges of nearly $1.4 million each that they’d have for having fewer than 12 players on their roster, which would bring them up to $105.8 million. If they kept Bronny, they’d be left with five incomplete roster charges and just over $61 million in cap space.
If the cap lands at nearly $165.5 million, the Lakers could enter next offseason with around $60 million in cap space. There isn’t an obvious free-agent target to spend that money on, particularly after the Memphis Grizzlies renegotiated and extended Jaren Jackson Jr.’s contract this offseason, but having that level of financial flexibility would be half the battle.
“Make no mistakes,” team president Rob Pelinka said Saturday at the press conference for Dončić’s extension. “We’re in win-championship-now mode always. But I think — I don’t want to bore people with apron talk. I think that the basketball public has had enough of that — but in the new system we’re in, having optionality is key to building teams. I think that we have seen some teams get stuck in the aprons and once you’re in them, it’s hard to get out of them.
“We’ve been very intentional with keeping our optionality to make now moves if there’s good now moves to make or to have sort of our flexibility in the future. But I say all that, the optionality is there for us to use now if the right move comes its way. We want to make smart moves. But to be in a position of flexibility vs. being stuck is really promising for how we’re going to build this team moving forward.”
So, the Lakers’ long-term cap-space plan isn’t necessarily all about hoping to lure Nikola Jokić or Giannis Antetokounmpo to Hollywood as free agents in 2027. ESPN’s Dave McMenamin noted the real mission “is to give the team as much margin to pivot as possible — either fueled by need or opportunity — each season while maintaining championship aspirations.”
The Lakers won’t be able to roll over that cap space indefinitely. The league’s latest collective bargaining agreement forces teams to reach the salary floor (90% of the salary cap) by the first day of the regular season. Those that don’t get a cap hold placed on their books that pushes them up to the salary floor.
Still, this offseason proved how useful that level of financial flexibility can be. The Brooklyn Nets turned Cam Johnson into Michael Porter Jr. and a fully unprotected 2032 first-round pick from the Denver Nuggets because they were willing to absorb MPJ’s larger deal. They also effectively got a free flier on Terance Mann and the No. 22 overall pick in the 2025 NBA draft for being able to take on Mann’s contract without sending salary out.
As the second apron bears down on more teams moving forward, other expensive rosters could be looking for escape hatches. Even if the Lakers don’t blow their cap space on a high-end free agent next offseason, they might be able to improve Dončić’s supporting cast via trades that are imbalanced in terms of salary.
The Lakers should still have significant financial flexibility even if (when?) they re-sign Reaves next offseason. But their best opportunity to make the biggest splash may be before they re-sign him.
Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Salary Swish and salary-cap information via RealGM.
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