While it may seem like the Los Angeles Lakers have a limitless amount of money to spend in their quest to win an 18th NBA championship, that doesn’t appear to be the case.
The Lakers have basically filled out their entire roster — minus one possible veteran addition or two — after making nine signings in the first two days of free agency, including one major re-signing in Talen Horton-Tucker.
But one player that they will not be bringing back is energetic spark plug Alex Caruso.
Entering this free agency period, Caruso was at the very top of the team’s priority list. The Lakers held the Bird Rights of the 27-year-old guard and the team appeared to be in favorable position to bring back the sixth man.
However, Caruso received an offer from the Chicago Bulls — a four-year, $37 million deal. While the contract is certainly an upgrade over what he was earning prior with the Lakers — he earned just under $2.8 million over the past two seasons with Los Angeles — he gave the Lakers an opportunity to re-sign him — and they ultimately passed.
According to Ramona Shelburne of ESPN, Caruso was willing to re-sign for less than what the Bulls offered him at three years, $30 million — less total money on the length the contract, but slightly higher annual rate at less years — but the Lakers shot that down.
“I think the Lakers looked at Alex Caruso and said ‘we’re happy for you, we really appreciate everything you’ve done, we wish we could keep you, but, you know’… He was willing to go back there at three years and $30 million, he actually gave them that option, even at the end — it’s less than what he signed for in Chicago — but even that was more than they were willing to pay… That was as far as they were willing to go. They looked at Caruso and said ‘we can go to $7 million a year, but above that it gets too cost-prohibitive.’”
Per Shelburne, the Lakers were willing to go a maximum of $7 million per year. Because the team is already past the luxury tax line, that would have been a hefty bill for the franchise. Tack on an extra $3 million for Caruso this season, and it would have cost the Lakers a total of at least $30 million or so in luxury tax payments.
Ultimately, Caruso passed on signing a less lucrative deal to return to a contending Lakers squad in favor of the more lucrative deal behind a rebuilding — but suddenly intriguing — Chicago Bulls squad.
As Zach of Lowe of ESPN stressed, this was purely a tax decision by the Lakers, as paying the extra $3 million per season was not worth paying the extra money for the team. For those not aware how the luxury tax works in the NBA, the tax line is at $136.6 million for the 2021-22 season.
For teams between $15,000,000 and $19,999,999 over the cap, the tax rate is $3.25 for every dollar over the cap. The incremental maximum for this level is $16.25 million. The Lakers project to be in this range entering the 2021-22 season.
“Well look, the Caruso decision was a tax decision,” said Lowe. “Even the Russ trade, the tax was not not a consideration. Because Schröder, plus Hield, plus KCP, plus other role players was probably going to end up being more expensive than Russ, even though Russ makes a massive amount of money.”
“And look, you can sit here and quibble and say ‘how can you worry about the tax when you have LeBron James approaching 37, like you should be all-in to win now?’ But they worried about it, and that’s their prerogative.”
The Lakers certainly could have used Caruso for the upcoming season — at 27, he’d be the fourth-youngest player of all of the team’s active roster players — but they ultimately decided signing veteran players at the minimum is a better route to go for the upcoming season.
Keep in mind, the Lakers did add six players over the age of 32 this offseason — the most in NBA history.
The Lakers will hope that experience and frugality — if you want to call it that — will ultimately prevail as they look to keep pace with the Eastern Conference’s Brooklyn Nets next season.