Los Angeles Lakers guard Austin Reaves has cemented himself as a vital piece of the organization after a playoff run that saw him average more points than anyone not named LeBron James or Anthony Davis. Due to games played benchmarks, Reaves was also the team’s official leading scorer during the regular season.
But Reaves is now entering restricted free agency after his second NBA season. As an undrafted free agent and two-way signing, the Lakers only gave Reaves a two-year deal, as they did not save any of their mid-level exception which would have allowed them to offer Reaves a three-year minimum contract.
Being a two-year restricted free agent brings with it a special type of free agency that is better known as the Gilbert Arenas provision. It prevents teams from losing out on their own young free agents because they simply couldn’t afford to match an offer sheet.
Below, we explain the rule, what the Lakers can offer, what other teams can offer and how the Lakers have no reason to lose Reaves this summer.
Arenas Rule explained
The Arenas Rule extends to any player who is entering restricted free agency after their second year in the league. Because the incumbent team — in this case the Lakers — only has early bird rights, they would be unable to give that player anything beyond the non-taxpayer midlevel exception. This summer, that number is projected to be around $12.2 million via Spotrac.
With that said, the most the Lakers can offer Reaves themselves is a four-year contract with the first-year salary being $12.2 million. This totals out to a four-year contract worth slightly more than $52 million.
This is where the Arenas Rule comes into effect.
Opposing teams are only allowed to offer Reaves a contract that matches the non-taxpayer midlevel exception for the first two seasons. But, as long as a team offers Reaves the NTMLE max for the first two seasons, they can offer a third and fourth year that match the league maximum for a third-year player.
In this case, Year 3 and Year 4 would be worth around $35.3 million and $37.1 million, respectively. So another team could offer Reaves a four-year deal worth a maximum of just under $98 million.
If another team opts to do this, the Lakers have the ability to match that, or any, offer, provided they have the ability to give him the $12.2 million NTMLE in Year 1. For the Lakers, the cap hits for each year would be the exact numbers as offered.
In another wrinkle, teams offering Reaves that four-year, $98 million maximum must have at least $24.5 million, approximately, in cap space. This is because if the Lakers choose not to match, the contract is smoothed out over the four years on the opposing team’s cap sheet. This means instead of $12.2 million in Year 1 for the Lakers, it reflects as $24.5 million for another team.
But regardless of what another team offers Reaves — whether it’s the max of $98 million or a dollar above the $52 million the Lakers can offer — the Lakers have the ability to match.
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