Nash is owed $9.3 million for the current year and $9.7 million for next season. If he's found to be physically unable to play, he would still receive full compensation.
The NBA would then do its due diligence, sending a league-appointed physician to verify Watkins' findings.
If the league would sign off, the final year of Nash's contract would be completely removed from the Lakers' salary cap -- as long as he plays in fewer than 10 games this season.
So far, Nash has made six appearances. Has he made his last?
The Lakers have nearly cleared their books for the summer of 2014 with only Robert Sacre ($915,243) and Nash with guaranteed salary. Nick Young has a player option for $1.2 million, and rookie Elias Harris is under contract for a non-guaranteed $816,482.
With Nash's salary coming off via theoretical retirement, the Lakers could have in the neighborhood of $54 million in spending power to chase free agents and/or re-sign their own players, such as Kobe Bryant and Pau Gasol.