LeBron James opts out of Lakers contract but expected to sign new deal with LA

James is eligible to sign a three-year, $162 million maximum contract to return to the Lakers in free agency

LOS ANGELES, CALIFORNIA - APRIL 27:  LeBron James #23 of the Los Angeles Lakers during game four of the Western Conference First Round Playoffs at Arena on April 27, 2024 in Los Angeles, California.  NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Ronald Martinez/Getty Images)

LeBron James has opted out of his contract with the Los Angeles Lakers for next season, his agent, Rich Paul, told ESPN's Dave McMenamin, but he's not expected to a free agent for long.

According to Paul, James is willing to work with the Lakers on a new deal that would come in below the maximum three-year, $162 million deal he is eligible for in order to open up the full $12.9 million mid-level exception to allow general manager Rob Pelinka to sign an "impact player."

What type of "impact player?" According to ESPN, that could be James Harden, Klay Thompson, who's expected to hit free agency, or a big man who can play alongside Anthony Davis.

"He is prioritizing a roster improvement," Paul told ESPN on Saturday. "He's been adamant about exuding all efforts to improve the roster."

James had until 5 p.m. ET to inform the Lakers of his decision.

The last time he was a free agent, James joined the Lakers in 2018, signing a four-year, $154 million deal to go west. He signed a two-year, $97.1 million extension with Los Angeles in 2022, which included a player option for this upcoming season.

James is eligible to sign a three-year, $162 million maximum contract to return to the Lakers in free agency. He is also eligible to sign with any other team in the NBA for a maximum of $157.5 million over the next three seasons. (The NBA limits contracts for players over 38 years old to three-year maximums.)

The 39-year-old is the oldest active player in the NBA but shows no signs of slowing down. James averaged 25.7 points (on 54/41/75 shooting splits), 8.3 assists and 7.3 rebounds per game this past season, making the All-NBA third team. He led the Lakers to a play-in tournament berth and the No. 7 seed in the Western Conference. They lost to the Denver Nuggets in the opening round of the playoffs.

Although his free agency decisions are unclear, James said that he wanted to retire as a Laker during the 2024 All-Star Weekend in February.

"I am a Laker, and I've been very happy being a Laker the last six years, and hopefully it stays that way," James said, just before making a record-breaking 20th All-Star appearance.

Another consideration was James' son, Bronny, who was drafted by the Lakers with the No. 55 overall pick on Thursday. James has said repeatedly that he hopes to play his final NBA season with Bronny, but recently said that he won't necessarily leave the Lakers to join his son if he gets drafted by another team, and his agent Rich Paul clarified that the two are not a packaged deal.

At this point, the Philadelphia 76ers are the only championship contender with maximum salary cap space. James could also orchestrate a sign-and-trade deal elsewhere or sign anywhere for as little as the veteran minimum, though Paul all but ruled out the latter to ESPN's Jonathan Givony.

"LeBron is also not going to Phoenix for a minimum deal," said Paul. "We can squash that now."

At the very least, James will take a pay cut for the 2024-25 season. His maximum starting salary of $50 million is almost $1.5 million less than was his option to play for the Lakers. By becoming a free agent, he can now negotiate a no-trade clause with the Lakers in addition to securing a longer-term contract. This remains the most likely scenario. James' family and non-basketball business are based in Los Angeles.

The Lakers also just hired James' podcast co-host, JJ Redick, to a four-year contract as their new head coach.