The $110 Million Question
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I am pretty positive Pau Gasol will not finish the 2012-13 NBA season on the Los Angeles Lakers roster.
In fact, I think Gasol will be traded to the Houston Rockets sometime shortly after August 25.
I have no inside source telling me this.
I have no team official even hinting at the possibility.
But what I do have is experience reading between the lines, connecting the dots and doing the math.
And I do not see how the Lakers can keep Gasol for the next two seasons on his current Lakers' contract (he earns $19.0 million in 2012-13 and $19.3 million in 2013-14).
The Buss family has been known to pay as much as $20 million in luxury-tax penalties to make the Lakers the best team money can buy. Typically, that translates into spending $90 million in players, which is $20 million over the $70 million luxury-tax threshold.
However, with other big-money players under contract like Kobe Bryant (2 years, $58.3 million), Dwight Howard (1 year, $19.5 million), Steve Nash (3 years, $27.9 million) and Metta World Peace (2 years, $15.0 million), the Lakers will be paying their five starters $82.6 million this season and $87.3 million next season, if Howard signs a maximum deal as expected.
That's more than any one NBA team pays all 15 of its players.
Let's play it conservative and say the Lakers spend $15 million on its bench, which would be way lower than what L.A. has actually done in recent years, they would then incur $27.3 million in luxury-tax penalties this season and an astronomical $102.3 million in penalties in 2013-14 when the luxury-tax rates rise sky high, thanks to the recent collective bargaining agreement that punishes big-spending teams.
Yes. You read that right.
If the Lakers' team payroll is $102.3 million, and the 2013-14 luxury tax is $72 million when the penalties escalate in a more-punitive way, then the Buss family will have to pay $110.3 million in penalties for being $30.3 million over the luxury figure.
See the difference?
This year the penalties don't escalate. So the Lakers will be paying an all-time high $27.3 million or so, but they can do it.
In 2013-14, however, NBA teams will no longer be able to spend $20-$30 million over luxury-tax figures without seeing their fines eventually tripled or quadrupled.
It doesn't take a genius to figure out there's no way the Buss fam will pay that tab.
That's precisely why Dallas Mavericks owner Mark Cuban waved bye-bye to Tyson Chandler, Jason Kidd and Jason Terry within a year of winning the 2011 NBA championship. He too annually fielded $90 million player budgets, but as you can see, the new CBA doesn't allow for that type of behavior anymore.
Now let's jump back to the L.A.'s' situation and just imagine the Lakers want to trade Gasol to the Rockets, like they actually did in December 2011, before the deal was nullified by Commissioner David Stern.
If they were to do so now, what would they want?
I believe they would want young big men to replace Gasol. I believe they would want a good player with an expiring contract so that they chop off a huge sum from that more-punitive pending penalty coming in the 2013-14 season. And I believe they would want a first-round pick or two to set themselves up for the future.
Houston has all that.
The Rockets supplied the Lakers with a decent big-man prospect last season when they dealt Jordan Hill to L.A. And they have plenty more where that came from on their 21-man roster (yes, Houston has 21 players--another sign that shows they're ready to make some blockbuster trades).
Houston could offer many, many young power forward prospects, like Patrick Patterson (makes $2.1 million this season), Royce White ($1.6 million), Terrence Jones ($1.5 million), Donatas Motiejunas ($1.3 million), JaJuan Johnson ($1.1 million), Sean Williams ($0.9 million), not to mention young centers like Marcus Morris ($1.9 million), Jon Brockman ($1.0 million), Greg Smith ($0.8 million) and Josh Harrellson ($0.7 million).
Trouble is, some of these talents cannot be traded until August 25 because they signed contracts with Houston July 25, and the new CBA prohibits the Rockets from trading them until they've been there a month.
That is why I believe a potential Gasol trade will start hitting the rumor stages right about that time.
The Rockets want Gasol to play alongside their new center Omer Asik. The Lakers don't want to pay a $110.3 million penalty in 2013-14.
And Houston has the young players that can help Los Angeles set itself up nicely for the future and present.
Rockets GM Daryl Morey also can offer Lakers GM Mitch Kupchak Houston's 2013 first-round pick, which would likely fall somewhere between picks 10-thru-20. Morey also has the Raptors' lottery-insured first-round pick the next time Toronto has a Top 14 selection. Either would be appealing to the Lakers.
And as for the expiring contract the Lakers need, the Rockets have Kevin Martin's deal with 1 year, $12.4 million left on it.
Houston could trade three big prospects that add up to $5 million, include a first-round pick or two, add Martin to the deal and get back a package for Gasol that not only strengthens their team for the future, it takes away most of that ridiculous $100-million-plus penalty.
Here's another reason I think the deal is going down.
When Orlando was in trade talks with Houston, Chris Duhon was a point guard the Rockets were interested in acquiring because he would be someone to back up Jeremy Lin.
The Rockets still don't have a true backup point guard, and when the Lakers made the deal for Howard, they had Orlando throw Duhon into the mix.
The Lakers have no need for a $3.5 million point guard like Duhon, not when they're paying Nash $8.9 million and Blake $4.0 million to back him up.
I believe Duhon will be thrown in this Gasol deal.
With the Lakers clearing out $22.5 million and $23.1 million in players the next two years, they could take on Martin's $12.4 million expiring contract and $5 million for three big men.
Not only does Kupchak save the Lakers $10 million this season ($5 million in salaries, $5 million in penalties), he would save them around $111 million in 2013-14 ($19 million in salaries, $92 million in penalties) because the Lakers team salary would only be around $83 million, equating to $18.75 million in penalties.
And if Kupchak also were to amnesty Metta World Peace's contract at that time, the Lakers 2013-14 team payroll would be around $75 million, which would only be $4.5 million in penalties.
Trading Gasol for young talent saves many, many, many millions.
If they kept Gasol and, say, just amnestied Metta, then the Lakers would be able to scale down significantly, bringing their $110.3 million penalty to $73.5 million.
But that figure is still way too much, especially when you consider you tack on the $7.7 million you still gotta pay Metta to leave the team.
It's a no-brainer, really.
Keep Gasol for the rest of his contract and pay anywhere from $73 to $110 million in fines in 2013-14 … Or trade Gasol now, acquire three young big men who were drafted in the first round, add some more first-round picks for the future … amnesty Metta World Peace next summer … and pay just $4.5 million in penalties in 2013-14 … and get your house in fiscal order.
It's a savings of more than $100 million. Even the most ardent Laker fan will understand.
I know the L.A. global fan base wants to see a lineup of Howard, Gasol, Metta, Kobe and Nash, but it's not going to happen. At least, not for too long.
There is just no way any NBA team--not even the Lakers--can pay $110 million in luxury-tax penalties for any one season.
Even if they've just signed a 25-year, $5 billion TV contract with Time Warner.
You just can't … and the Lakers know it.
When all is said and done, a Lakers lineup of Howard, young Rockets big men, Metta, Kobe, Nash, Martin, etc. is still a big upgrade over last year's squad.
As great as Gasol is, and as exciting as it was to watch him excel in the 2012 Olympics--no NBA player is worth a hundred million dollars debt for one year's work.