James has agreed to a four-year deal with the Los Angeles Lakers for $154 million according his agency, opting out of the final year of his deal with the Cavaliers.
The Lakers missed the postseason a year ago, but that would quickly be forgotten by adding both James and Leonard. With Leonard adamant about joining the Lakers either now or as a free agent in 2019, the Spurs don't have much leverage.
Missing out on Leonard this summer would however leave a lot up to four-time MVP James if they intend to compete for a championship in 2018-19.
That puts the Lakers in an even tougher spot - do they give up the assets for Leonard now, or wait until he can sign with them next year? Getting Leonard would be great, but don't expect the Lakers to blow up the team in order to do so.
On the other hand, there's a danger in not striking while the iron is hot.
The Spurs are wary about sending Leonard to a potential rival superteam, preferring instead to keep him or trade him to the Eastern Conference, according to USA Today.
"Whenever anyone says anything about another individual or about the quality of another individual, or what they're doing, I think the first thing to look at is the substance and gravitas of the source that speaks", he told ESPN.com in January about LaVar's criticism of Lakers coach Luke Walton.
While James and Gilbert have notably been at odds several times over the years, McMenamin seemed to at least partially contradict Smith's report, writing, "A source familiar with the Cavs" thinking said re-signing James is Cleveland's "Plan A, B and C' when it comes to free agency".
By declining his option, James positioned himself to be able to choose where he'll play next and Cleveland, his basketball home for 11 of the past 15 seasons, remains a strong possibility.