This week the Lakers offered forward Anthony Davis a maximum contract extension. It would’ve locked him up for the next four years and pay him $145.6 million. His salary next year would’ve started him at $32.5 million, a 20 percent raise, then $35.1 million, $37.7 million, and $40.3 million the following three seasons. However, Davis can make much more money by rejecting the offer, which he reportedly did earlier this week.
The Lakers offered it merely as a formality and sign of respect. Davis rejected it not because he wants to leave the Lakers but because he could earn more money by signing a contract as a free agent.
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The salary cap for 2020-21 is currently projected at $116 million. This would make Davis eligible to sign a deal with the Lakers worth $203.58 million over five years. Even if Davis only signs for four years, those four years of a maximum contract would have him earn $11.6 million more than the four years of a maximum extension.
Davis can earn even more money if he signs a short-term deal this summer. Davis currently has 8 years of service, making his projected $203.58 million maximum contract for this summer worth 30 percent of the salary cap. Once he completes his 10th NBA season he is eligible to sign a five-year maximum contract worth 35 percent of the salary cap.
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According to Bill Oram, people inside the Lakers organization believe Davis is in favor of signing a two-year deal with a player option for 2022-23, also known as a “2 + 1.” He could also sign a one-year deal with a player option for 2021-22 (“1+ 1”), opt-out, then sign another “1 + 1”. Both allow him to maximize his earnings in the short-term while allowing him to re-enter free agency in 2022 once he’s eligible for the 35 percent maximum contract.
According to RealGM, the 2022-23 salary cap is currently projected at $131.25 million, though that figure is very fluid since the 2022 offseason is a while away. If that projection holds and Davis is still on the Lakers by then, he would be eligible to sign a five-year deal with the Lakers worth $266.4 million. Another team could sign him to a four-year deal worth $197.5 million.
Through two years of short term deals with the Lakers and the first two years of a 35 percent maximum contract with them, he would earn a projected $167.85 million through 2020-21 and 2023-24. That is approximately $10.6 million more Davis would earn in four years versus signing a maximum contract this summer, and he would still be owed $171 million over the following three seasons.
LeBron James played the “1 + 1” contract game with the Cavaliers during most of his second tenure with them. He did this not only to maximize his earnings but to also put pressure on the Cavaliers front office and ownership to keep a competitive roster around him. Expect fellow Klutch-mate Davis to follow in his footsteps and do the same dance with the Lakers over the next two seasons.
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