What Austin Reaves' record four-year, $185 million max contract means for the Lakers, LeBron James, more

What Austin Reaves' record four-year, $185 million max contract means for the Lakers, LeBron James, more Reaves' deal is the biggest contract ever signed by an undrafted free agent By Sam Quinn Jun 24, 2026 at 1:15 pm ET • 10 min read Add CBS Sports on Google Getty Images 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 spaceThe 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, an