LeBron James has a big decision to make this summer, both for himself and the Lakers. He has a $52.6 million player option for the 2025-26 season that, if exercised by June 29, would bring him back on a one-year deal for next season. He could also opt out of that deal and become an unrestricted free agent.
LeBron is expected to return to the Lakers next season one way or another, according to ESPN’s Shams Charania. The path which he gets there is critically important, because it will influence the type of roster that the Lakers can build around him.
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LeBron James contract options
LeBron James could opt-in to his contract, but he probably won’t
If this all sounds familiar, it’s because the exact same scenario happened last year. LeBron could have exercised a one-year player option. Instead, he chose to sign a completely new deal that paid him $48.7 million in 2024-25, with a player option in 2025-26.
Structuring the contract in that way was beneficial to him for two reasons. First, it gave him an extra year of salary and insurance in case of injury or rapid decline. Second, he was able to negotiate a no-trade clause into his deal.
LeBron will probably do the same thing this summer. He’s still a top 15 player in the league and the Lakers have no way to replace him if he leaves. He has the leverage, so he will probably use it to get that extra year of insurance on the books along with a renewal of that no-trade clause.
Look for LeBron to sign that two-year contract with a player option in Year 2 that will start at around $54 million annually. Then we’ll do this whole thing again next summer.
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What happens if LeBron James goes for the most money
If LeBron takes the maximum amount possible of around $54 million, then the Lakers will be into the luxury tax and a few million dollars shy of the first apron.
Under this scenario, the Lakers would have access to their $5.7 million taxpayer mid-level exception to add a free agent. They could also use minimum contracts.
That’s not a great avenue to add talent, so the best course of action would be to make some trades. Being under the first apron is important because it allows the Lakers to combine their own players in trades and lets them take in a little bit of extra salary. That makes deals much easier to pull off.
This is probably the outcome that ends up happening. LeBron did volunteer to take a small pay cut last season, allowing the Lakers some extra flexibility in trades. He’s not expected to do that again, according to reporting from Jovan Buha and Sam Amick of The Athletic.
What happens if LeBron James takes a pay cut
LeBron was willing to take an eight-figure paycut if the Lakers could bring in a starter-level player last summer. A similar situation will exist this season.
The Lakers would love to have access to the $14.1 million mid-level exception, which will allow them to bring in a much better player than the $5.7 million that they currently have slotted.
LeBron had a short list of players last year that he was willing to make that sacrifice for. It included James Harden, DeMar DeRozan, Klay Thompson, and Jonas Valanciunas. Harden could be a free agent again in a very weak class that also includes Fred VanVleet, Julius Randle, and Naz Reid on player options. It’s not impossible that LeBron offers that same deal again.
This probably won’t end up happening for a couple of different reasons. It would be tricky to get those types of players to agree to sign for that $14.1 million even if LeBron were willing to give back a sizeable amount of salary. And there just aren’t that many guys in this class worth doing that for.
The Lakers are probably going to use trades to bring in players in place of free agency this summer. Look for them to shop some guys off their own roster.
What happens if LeBron James retires, leaves, or takes a massive pay cut
If LeBron isn’t on the team, that frees up $50+ million in spending. Unfortunately for Lakers fans, the team still wouldn’t have any salary cap space to sign free agents. They would have the full $14.1 million exception available, but that’s about it.
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We’re truly getting into the stuff of fantasy now, but LeBron could also technically come back to the Lakers on a veteran’s minimum contract that would pay him a little over $3 million per year.
Players have done this before, but never one who was still as good as LeBron. David West came to the Warriors on a veteran’s minimum, closing out his career with two rings on the Warriors, for example.
LeBron signing for the minimum would save ownership a ton of money and take the Lakers out of tax and apron concerns. Functionally though, it wouldn’t do much. That $14.1 million mid-level exception would be opened up in free agency. The Lakers still would not be able to outright sign any top-tier names.
In the rare chance that LeBron does volunteer for a pay cut, expect it to be a modest one. More likely, he comes back at that $54 million number and the team tries to package its first-round pick in a trade for a starting center.
