LeBron James contract options explained: Lakers star can stay put for $52.6 million, but will he?

LeBron James has earned more money playing professional basketball than any other human in history. On Tuesday, ESPN reported that James is expected to pick up his $52.6 million player option for next season. If he does so, according to Spotrac, his career earnings will top $581 million. Throw in his off-court earnings and business ventures, and he has reportedly been a billionaire for years.

But remember, it’s still May. James has another month to make up his mind, and as the wealthiest player in the NBA, he has a bit more leeway than most to consider alternative contract structures if they make sense. So, with James still reportedly mulling his options and the Los Angeles Lakers planning their own offseason in part around his decision, let’s take a deeper look James’ contractual options. What else could he sign with the Lakers? Is there anything outside of Los Angeles that might make sense for him? And what factors might shape his ultimate decision?

So what are LeBron’s options

Charania has reported that James is expected to pick up his player option for $52.6 million. His deadline to do so is June 29. If he does, he will remain the Lakers on that deal, which is just below his max salary, and he will retain the no-trade clause that he negotiated for last summer. He would then become an unrestricted free agent again next summer, as a 41-year-old. Again, this appears to be the likeliest outcome for right now, but there are three other notable possibilities we need to address:

• James could opt out of his contract and attempt to negotiate up to his maximum salary.
• James could opt out of his contract and sign with another team.
• James could opt out of his contract and re-sign with the Lakers on terms that are more favorable to the team.

So let’s go through each of them and figure out whether they make sense.

Wait, LeBron can make more than $52.6 million?

Yes. James took slightly below his maximum salary last offseason to help the Lakers duck the second apron, and his $52.6 million player option is an 8% raise on top of the $48.7 million salary that he earned last season. His actual maximum salary is 35% of the salary cap. With the cap projected to come in at $154.6 million, James’ max is actually slightly higher at $54.1 million or so.

Now, that $1.5 million gap is minimal, but potentially symbolic. When James signed with the Miami Heat in 2010, he left a decent chunk of change on the table to help Pat Riley build a roster. This created an environment in which other star players were pressured to take less than the max because, hey, if LeBron’s doing it, shouldn’t you? James, previously an NBPA vice president, is sensitive to his impact on other players, so when he returned to Cleveland in 2014, he resolved to only accept max contracts moving forward. Last summer was his first pay cut since.

If James approached the Lakers and demanded his full max, they’d probably give it to him. It just isn’t worth picking a fight with such an important player over $1.5 million, and, if we’re being honest, James is still probably worth a full max salary. Aside from his colossal off-court financial impact, he was just named a Second Team All-NBA player. He’s due for some age-related decline eventually, but at this point, it probably has to actually happen before anyone can bank on it. James simply isn’t a player you negotiate against. He gets the contract he wants, and if the Lakers were to hesitate, well, any other team in the NBA would love to have him.

Are you saying LeBron could leave the Lakers?

Well, he has the right to do so, but no, it is overwhelmingly unlikely that James leaves the Lakers this offseason. He’s set roots in Los Angeles, he probably doesn’t want to further the idea that he’s a team-hopper, but most importantly, there just isn’t a destination that makes any sense.

Only one team has significant cap space this offseason: the Brooklyn Nets. James once infamously called New York his favorite city and Brooklyn his favorite borough, but the Nets basically have a blank slate of a roster. A major trade for another star might change that, but that could impact Brooklyn’s cap space, and even if it doesn’t, come on, this is LeBron James we’re talking about here. When he went to Los Angeles, he didn’t sign with the Clippers. He’s too image-conscious to go to a New York team that isn’t the Knicks, and the Knicks are not in a position to create cap space.

What about a sign-and-trade? Well, acquiring a player through a sign-and-trade hard caps the receiving team at the first apron, and right now, the Knicks are already above that projected line for next season with just 11 players on the roster. I suppose it could theoretically be doable, but it would be difficult, and short of returning to the far easier Eastern Conference, it’d be hard to find a motivation for James to make this sort of jump now. Besides, would the Knicks even want to break up a conference finalist to add a quadragenarian? The answer is probably no.

Be honest, when the thought of a James sign-and-trade came up, you weren’t thinking about New York, were you? You were thinking about Cleveland. All roads seem to lead back to northeast Ohio for James, and he’s spoken openly in the past about wanting to finish his career with the Cavaliers. Cleveland’s five-game drubbing at the hands of the Indiana Pacers probably opens the door for major changes this offseason, and a 64-win team adding James in a weak conference would immediately become one of next season’s championship favorites.

It just isn’t financially feasible. Remember that first-apron hard cap that comes with a sign-and-trade? Well, Cleveland isn’t just above the first apron, it is far above the second. There’s just no plausible way to trim enough money to get James via sign-and-trade that doesn’t involve an enormous pay cut. Now, what if James opted-in and forced a trade to Cleveland? That wouldn’t be easy either. The Cavaliers have no single player who makes as much as James does, so they would have to aggregate multiple contracts to get him. Doing so creates a second-apron hard cap. Again, the Cavaliers are currently above the second apron. Could they duck it if they needed to? Potentially, but it would be pretty difficult and would cost depth that means quite a bit for a team that would be paying close to max money for a man in his 40s.

If James wanted to go back to Cleveland now, it would probably be on a minimum contract. Maybe a day will come in which James is willing to play for the minimum, but it probably isn’t today. But what about a smaller pay cut?

Would James sacrifice financially for the Lakers? And should he?

Last offseason, James offered to take a meaningful pay cut in order to allow the Lakers to open up the full mid-level exception or acquire a difference-maker through a sign-and-trade. That pay cut would have cost him something in the area of $15 million. The Lakers tried to use that potential financial flexibility to land Klay Thompson in a sign-and-trade. They failed, so James took a figure closer to his max. One of the most important questions for the Lakers this offseason is whether or not he would consider offering such a cut again.

For now, the expectation is that he will not. With more than a month before the start of free agency, though, no decisions are set in stone. Remember, reporting about a possible pay cut last season didn’t come until after the Lakers had drafted Bronny James. That might suggest a bit of a quid pro quo here: show me that you have moves lined up that are worth a pay cut and then I’ll talk about giving you on.

That would be the primary motivation here. If their first-round beatdown at the hands of the Timberwolves was any indication, the Lakers are simply too far away from championship contention to bridge the gap with James earning a max salary. That isn’t because James isn’t worth the max. It’s because they need every tool at their disposal to improve this offseason. The difference between, say, the projected $14.1 million non-taxpayer mid-level exception and the $5.9 million taxpayer mid-level exception could be the difference between competing for a championship or not. The Lakers only have access to the former with a sizable cut from James.

James holds most of the cards here by virtue of that player option, but the Lakers hold a few themselves if they’re willing to play them. Remember, James is operating on a very short championship timeline. If he wants to win a fifth, it basically has to happen now. But the Lakers, with a 26-year-old Luka Dončić, can afford to be much more patient. Obviously, they’d like to win a championship now, while they have the James-Dončić duo, but if James isn’t willing to make a financial sacrifice to help them do so, they could turn around and refuse to sacrifice their future flexibility to help James win now.

So what does that look like? Well, think about that tradable 2031 first-round pick they have. Put that on the table and the Lakers could probably get a pretty impactful center or wing defender for next season. On a James-Dončić 2026 team, such a player could be critical. But if the Lakers give that pick up for someone to win now, while they have James, that’s one fewer asset they’ll have for after James retires, when they’re probably going to need every asset they can get to find Dončić another co-star. There’s plenty of reason for the Lakers to hold onto that pick this summer, because in 2026, their 2033 first-round pick opens up as a trade asset and they can package it together with the 2031 choice for a better player. That player would just mean more for the post-James Lakers than the immediate version of the team.

There’s a financial element of this conversation as well. The Lakers, as it stands, are positioned for significant cap space in the summer of 2026. There may or may not be star-level free agents that summer. Jaren Jackson Jr. stand out as the obvious fit for the Lakers if he elects against renegotiating-and-extending with the Grizzlies this offseason, and until his situation is settled, the Lakers probably want to maintain as much cap flexibility as possible. But if they limit themselves to players on expiring deals so as not to disturb their 2026 cap space, they shrink their pool of possible veteran additions significantly. 

This is a carrot the Lakers can dangle in front of James. They have a choice to make this summer between prioritizing his present or Dončić’s future. If James wants them to prioritize his timeline, they would not be out of line for suggesting that he should make a similar sacrifice for them. If he wants them to trade away their picks and vaporize their 2026 cap space for an immediate run at a championship, they might need him to sacrifice enough money to give them the tools they’d need to do it.

Take this a step further. Say the Lakers want to use 2026 cap space. Well, doing so probably means that James isn’t on the team anymore, or at least not a substantial salary. If they’re paying a max or something close to snag a Jackson-level player, they’d have to renounce his cap hold as a 2026 free agent just to create the space.

But what if James wants to remain a Laker beyond the 2025-26 season? Well, opting out now gives him a bit more control over that. He can tell the Lakers he’d be willing to take a pay cut, but if he does so, they’d have to give him another player option for next season. That would give him control over what the team does next summer, and since he’s already successfully negotiated a no-trade clause, he presumably wouldn’t be in danger of getting moved against his will.

So there are plenty of reasons, on both sides, that a pay cut for James makes sense. But whether or not he takes one is still up to him. The ball is in his court, and he’s got a month to make up his mind.