Austin Reaves

Austin Reaves is re-signing with the Lakers on a four-year, $185 million contract with a player option in the final season, according to ESPN . In terms of average annual salary, this deal is a full max contract for a player with six or fewer years of experience, like Reaves. However, the Lakers could have re-signed Reaves for up to five years, yet the two sides agreed on a slightly shorter contract. This is the biggest contract ever signed by an undrafted free agent in NBA history.

Reaves, due in part to some quirks of the collective bargaining agreement, was enormously underpaid on his previous contract. He became a restricted free agent after the 2022-23 season, which meant that the Lakers could not only match any offer made to Reaves, but that they had a few inherent advantages in re-signing him.

As only a two-year veteran, Reaves was subject to the Gilbert Arenas provision. That prevented any team from offering Reaves more than the Lakers could legally match in the first two years of the deal, which was around $12 million. They could have backloaded the deal up to his max at the time, but the fear that the Lakers would simply match the offer scared away any potential suitors. That allowed the Lakers to re-sign Reaves to a four-year deal worth less than $54 million, which was the most they could pay with his Early Bird Rights. In exchange for taking less than he was worth, the Lakers gave him a player option for the 2026-27 season that facilitates this deal.

So what does all of this mean for the rest of the offseason? Let's dive into some of the ramifications of this deal:

Why this doesn't affect the Lakers' cap space

The Lakers are projected to have the most cap space in the NBA this offseason. The number will vary depending on how a few player options shake out, but the most commonly projected number is around $48 million. While paying Reaves max money will affect the team's long-term balance sheet, it does not actually affect their ability to create cap space this offseason. The Lakers still have more spending power than any other team in the NBA, at least for the moment.

Why is that? Because free agents count on their team's cap sheet for a predetermined amount known as a cap hold. That player's team retains the rights to go above the salary cap in order to retain that player, as long as it leaves that cap hold on its cap sheet. Cap holds are based in part on the player's prior salary, and as we covered, Reaves was enormously underpaid on his last deal. That left him with a cap hold of less than $21 million. All Laker cap projections bake that $21 million into the equation. Had the Lakers lost Reaves or renounced their rights to him, they could have created almost $70 million in cap space.

All the Lakers need to do to take advantage of that low cap hold is sign Reaves after they've figured out what else they want to do with their cap space (assuming they actually use cap space, which we'll explain a bit later). It's merely an order of operations issue. Reaves counts on the Laker cap for $20.9 million until he actually signs his new contract, at which point, his new salary replaces that cap figure. Therefore, for the time being at least, the Lakers retain the ability to create almost $50 million in space, and perhaps more depending on the option decisions of  Marcus Smart and Deandre Ayton .

What does this mean for the rest of the free-agent market?

Reaves was the best player on the entire free-agent market . He reportedly had max-level interest from at least one suitor -- Detroit -- and more interest surely existed on the sign-and-trade market and potentially from the two other cap space teams, Brooklyn and Chicago.

That forced the Lakers to go all the way up to the max in order to keep Reaves. There was no hometown discount here. A somewhat similar story seemingly played out for Trae Young with the Washington Wizards . For months, he was expected to remain in Washington on a three-year, $120 million deal. However, external interest forced Washington to go up to four years and $212 million, which was the equivalent of what another team could have offered him on the open market. Ayo Dosunmu didn't get a max, but he too exceeded expectations on his five-year, $112 million deal. The guard market, it seems, is hotter than anyone figured.

All of those interested parties now have to turn elsewhere for offense, and the rest of the free-agent market is set to benefit. Unless someone wants to try to steal James Harden away from Cleveland, we are likely done with the star portion of that market. There are, however, a number of players left for teams to fight over. Most notably: Quentin Grimes , Coby White , Norman Powell , Anfernee Simons , Collin Sexton , and restricted free agent Bennedict Mathurin .

Most of those financially flexible teams we mentioned as Reaves suitors -- Detroit, Brooklyn and Chicago -- figure to pursue those players. Their incumbent teams will probably try to keep them as well. Detroit, by virtue of its ability to create cap space and its status as a contender, probably controls the market at this point, but the most interesting team pursuing guards right now is probably the Heat .

After trading for Giannis Antetokounmpo , Miami has only about $18 million in room beneath its first apron hard cap. That probably isn't going to be enough room to keep Powell unless they find a way to save money elsewhere. One way or another, the Heat have to come out of this summer with another shot-creating guard, and the Miami market, the chance to win and lack of state income taxes in Florida make them a very desirable destination. They'll do everything in their power to end up with one of those guards.

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Where do the Lakers go from here?

While the Lakers have the capacity to create $48 million or so in cap space, it is not a foregone conclusion that they will actually do so. Creating that cap space means renouncing their rights to their other free agents. While they could, in theory, keep some of them with cap space, the cleanest path to retaining everyone would be operating above the salary cap.

If the plan here is to keep LeBron James , Rui Hachimura , Luke Kennard and Jaxson Hayes (and Ayton and/or Smart if they opt out of their deals), then this is what we should expect the Lakers to do. Operating above the cap would allow the Lakers to pay James and Hachimura anything up to their max with full Bird Rights. Hayes (Early Bird Rights) and Kennard (Non-Bird Rights) are limited in what they can make, but not to such an extent that it should affect the team's ability to retain either. The Lakers are currently hard-capped at the second apron because they spent cash in a draft night trade for Cameron Carr, but at present, they have almost $85 million in space beneath that hard cap, so it is unlikely to be a problem even if they keep everyone.

So the question for the Lakers then becomes... is there some way to use that $48 million in cap space that makes them better than just running it back? That depends on what's actually available to them.

All of the best free agents in this class, particularly the ones who would make sense for the Lakers, are restricted. Their teams have the right to match any offer. That means the Lakers cannot simply unilaterally recruit free agents like, say, Walker Kessler , Jalen Duren or Peyton Watson . They can give those players big offer sheets and hope their teams don't match them, but doing so ties up their cap space during the 24-hour waiting period. Given how quickly free agency moves now, it's possible that many of their own free agents leave for other deals before those offer sheets get matched, essentially costing the Lakers players for no benefit.

The Lakers could choose to use their cap flexibility in the trade market, making unbalanced deals for veteran players. However, given how much demand there is for the sort of defensive centers and athletic wings the Lakers need, they'd still almost certainly have to attach draft capital to do so. That might be their best chance at securing one of their restricted targets. Their cap space puts them in a position to throw huge offers at those players, which could force their current teams to decide between matching what might be a bad contract or losing a valuable player for nothing. A sign-and-trade could be a sensible middle ground for both sides, sending assets back to the target's original team and allowing the Lakers to offer a more sensible deal.

The middle ground here might be a compromise. The Lakers could operate below the cap, use some of their space to add players externally, and then use the rest of it to retain a key player or two. Keep in mind that if the Lakers operate below the cap, they will still have access to the cap room mid-level exception worth around $9.4 million to spend on top of their space. If they operate above the cap, they'll either have the full, non-taxpayer mid-level exception at their disposal to add a $15 million external player or, if keeping their own players proves expensive enough to take them above the first apron, the smaller taxpayer mid-level exception at $6.1 million instead.

What does this mean for the Lakers in 2027 and beyond?

The Lakers have had lofty ambitions for the 2026 offseason essentially since they acquired Luka Dončić. This was always the obvious pivot point, the moment in which most of their existing contracts expired and Reaves would have a low enough cap hold that they could meaningfully alter the team. Maybe that still happens. If it doesn't, the Lakers are decidedly less flexible once Reaves officially signs his deal. At that point, the Lakers simply have two max contracts on their books.

Could the Lakers theoretically still create max cap space for the (at least for now) loaded free-agent class of 2027? Yes, though it would be tight. Right now, the projected cap for the 2027-28 season is just above $173 million. Reaves and Dončić will combine to make around $98 million for that season. For now, the Lakers have minimal commitments for that summer. They have team options on Dalton Knecht , Adou Thiero and Bronny James they could pass up if needed (though James and Thiero are cheap enough that there's minimal benefit in declining those options). Rookie Cameron Carr will be entering the second year of his rookie deal at a reasonably low price. The only other hefty salary on the books would be the $13.3 million player option owed to Jarred Vanderbilt . The Lakers could waive and stretch him, or attach draft picks to move him.

But taking this path would mean making no commitments this offseason longer than one year. James might be open to a big one-year deal, but would any of the younger Lakers? Would any notable external free agents? Could the Lakers trade for expiring contracts knowing that they're replacing them in a year?

Again, the answer is theoretically yes, but practically unlikely. Dončić has been on the team for a year and a half. Eventually, the Lakers have to actually build a roster for him instead of just selling him on flexibility. Unless there is very good intel suggesting that someone like Nikola Jokić intends to decline an extension in Denver and become a free agent next offseason, the Lakers probably have to assume they're giving out some multi-year deals this offseason.

And if that's the case, this offseason is probably their last big chance to spend cap space. Afterward, their balance sheet will start to look a bit more typical of a contender: two stars at the top with a hopefully affordable band of role players beneath them. The Lakers have been benefitting from the below-market deals Reaves has been forced to play on essentially since discovering him as an undrafted free agent in 2021. Now he's getting what he deserves, and the Lakers will have to adjust

_Originally reported by [CBS Sports](https://www.cbssports.com/nba/news/austin-reaves-lakers-contract-free-agency/)._