The NBA's 2023 collective bargaining agreement (CBA) instituted stricter rules to both slow and speed spending. The league has instituted two hard caps for teams that go well above the luxury-tax threshold. Those above the first and second aprons have limited tools to sign or trade for players.
Similarly, the days of teams choosing not to spend in the offseason and hoarding cap room until the February trade deadline to take on unwanted salary have been all but phased out. The impact of the new CBA was evident this offseason. The Golden State Warriors broke up the Splash Brothers with Klay Thompson moving on to the Dallas Mavericks, while the L.
A. Clippers chose not to pay Paul George what the Philadelphia 76ers were willing to offer. Meanwhile, some teams have begun to hand out short-term, inflated contracts to reach the salary floor (90 percent of the salary cap).
The Indiana Pacers did so with Bruce Brown last offseason, and the Detroit Pistons did with Tobias Harris this summer. Some despise the new rules, but many haven't taken the time to study them thoroughly. The overarching goal is to ensure that the league and players split the annual Basketball Related Income (BRI) at about 50 percent each season.
That wasn't the case last season. Team salaries were too high, so players gave up almost 5.3 percent of their contracts to close out the year.
The new system may take a few years to prove itself, but there's no question that the rules limit NBA teams. Holdovers from the prior CBA that trigger the first apron ($178.1 million) include signing players via the Non-Taxpayer Mid-Level Exception (NTMLE), Bi-Annual Exception (BAE) or sign-and-trade.
New triggers include using preexisting traded player exceptions (from the prior season) and bringing back more salary than is sent out (via the Extended Traded Player Exception or ETPE), among others. The newer second apron ($188.9 million) is triggered when a team signs a player with the Taxpayer Mid-Level Exception (TMLE) or, via trade, aggregates players or sends cash.
While a franchise can send out a player via sign-and-trade (like the Minnesota Timberwolves with Kyle Anderson), it only triggers a second-apron hard cap only when taking back someone in return, which Minnesota chose not to do. Even though several trades were executed during the 2023-24 calendar year, moves made during the pre-July offseason can still trigger a hard cap for the following (2024-25) season. The following list details each team (sorted by city), its current hard cap (via the most restrictive and first trigger) and how those restrictions may or may not be limiting.
Hard Cap: First Apron Trigger: Acquired Cody Zeller via sign-and-trade from the New Orleans Pelicans for Dejounte Murray Projected Taxable Salary: $169.5 million ($1.3 million below the $170.
8 million threshold) Projected Room Under First Apron: $5.4 million The Hawks will avoid the luxury tax if Clint Capela and De'Andre Hunter don't earn all of their combined $3.3 million in unlikely incentives.
While the franchise can't add more than $5.4 million in salary, Atlanta hasn't paid luxury taxes for a very long time. If $170.
8 million is the internal limit, the first apron at $178.1 million doesn't really matter. Impact of New Rules: Marginal Hard Cap: None Trigger: None Projected Taxable Salary: $196.
6 million ($65.6 million penalty) Projected Second Apron Overage: $7.6 million As the current NBA champion, the Celtics may be the only team who should be willing to disregard the penalties of the second apron.
Boston has signed Jayson Tatum, Derrick White and Sam Hauser to extensions this offseason. Signing players to an extension or re-signing them as free agents doesn't trigger a hard cap, but the Celtics will have a hard time adding other players outside of the draft or for cheap in free agency. Impact of New Rules: Limited to just minimum contracts and restricted in trades Hard Cap: First Apron Trigger: Acquired Shake Milton via sign-and-trade from the New York Knicks for Mikal Bridges Projected Taxable Salary: $167.
6 million ($3.2 million below) Projected Room Under First Apron: $5.2 million The Nets were one of the higher-paying teams from 2020-21 to 2022-23.
They need to stay below the threshold for one more season to avoid the repeater tax. Given their direction—they traded their best player (Mikal Bridges) to the New York Knicks this offseason—the Nets were never going to be a high spender this year. Impact of New Rules: Marginal Hard Cap: Second Apron Trigger: Sent $110,000 in cash to the San Antonio Spurs for Devonte' Graham Projected Taxable Salary: $153.
6 million ($17.2 million below) Projected Room Under Second Apron: $35.4 million Did the Hornets re-sign Miles Bridges to a three-year, $75 million deal because that's how they value him as a player? Or did they do so to reach the minimum team salary and preserve a trade chip? It's too early to say, but the apron limitations for a team like the Hornets are superfluous.
Impact of New Rules: Potentially led to the Bridges re-signing and sped up the use of cap room to take on other teams' unwanted salaries. Hard Cap: First Apron Trigger: Signed Jalen Smith to a three-year, $27 million contract (NTMLE) Projected Taxable Salary: $164.2 million ($6.
6 million below) Projected Room Under First Apron: $11.6 million The Bulls are another notorious non-taxpayer. Unless Onuralp Bitim ($1.
9 million non-guaranteed) makes the roster, Chicago has room to sign one more player—perhaps with the $4.3 million left of its NTMLE—without worrying about luxury taxes. Impact of New Rules: The new rules may make getting out of Zach LaVine's contract more difficult, but the Houston Rockets were stuck with John Wall in similar circumstances under prior rules.
Hard Cap: None Trigger: None Projected Taxable Salary: $163.4 million ($7.4 million below) Projected Room Under First Apron: $14.
7 million The Cavaliers have one key restricted free agent left unsigned, Isaac Okoro. Outside of contract extensions (Darius Garland, Evan Mobley and Jarrett Allen) and the recently drafted Jaylon Tyson (No. 20), Cleveland hasn't added any free agents.
Perhaps that is to avoid tax or to save a spot for Okoro, who can push the team's payroll above the first apron without triggering a restriction. Impact of New Rules: Unclear until Okoro is resolved Hard Cap: First Apron Trigger: Signed Naji Marshall to a three-year, $27 million contract (NTMLE) Projected Taxable Salary: $174 million ($4.8 million penalty) Projected Room Under First Apron: $2.
6 million The Mavericks offloaded Tim Hardaway Jr. and Josh Green but added Quentin Grimes and Thompson. Were those decisions financially motivated, strictly basketball or both? Harder still was choosing not to re-sign Derrick Jones Jr.
, who left for the L.A. Clippers at a $9.
5 million starting salary ($30 million over three years). Impact of New Rules: Dallas still has $4.2 million of its NTMLE and the full $4.
7 BAE but can't add anyone above a minimum without shedding salary (assuming AJ Lawson isn't retained as the 15th player, pushing the team to about $500,000 under the first apron). Hard Cap: Second Apron Trigger: Signed Dario Šarić to a two-year, $10.6 million contract (TMLE) Projected Taxable Salary: $182.
6 million ($20.4 million penalty) Projected Room Under Second Apron: $5.2 million For the second straight season, the Nuggets lost a key rotation player (Bruce Brown last summer and starter Kentavious Caldwell-Pope this July).
Brown was situational, as his non-Bird rights in 2023 would have been similarly limiting under the prior CBA. But letting Caldwell-Pope go was a choice. The Nuggets had the means to pay him similarly to the $66 million he got from the Orlando Magic over three years.
Denver didn't pick Šarić over Caldwell-Pope, but it opted to stay below the second apron to maintain more flexibility moving forward. Impact of New Rules: Significant Hard Cap: None Trigger: None Projected Taxable Salary: $130.3 million ($40.
5 million below) Projected Room Under First Apron: $46.8 million The Pistons used cap room to acquire players like Paul Reed Jr., Malik Beasley, Tim Hardaway Jr.
and Tobias Harris. Detroit can still use about $10.2 million in cap space (or more if it waives Reed's non-guaranteed contract), but it needs to stay above the $126.
5 million minimum team salary. Impact of New Rules: May have spent more quickly Hard Cap: First Apron Trigger: Acquired Kyle Anderson and Buddy Hield via sign-and-trade from the Golden State Warriors for Klay Thompson (ETPE) Projected Taxable Salary: $176.6.
6 million ($14.6 million penalty) Projected Room Under First Apron: Just over $500,000 The significant change for the Warriors was the reduction in luxury tax from last year's league-leading $176.9 million penalty.
It wouldn't be shocking if the franchise dropped entirely below the tax line before the trade deadline. Thompson may be gone, but the team added De'Anthony Melton, Anderson and Hield while dramatically reducing payroll. Impact of New Rules: Significant, but the Warriors may have a better roster than they did in 2023-24.
The bigger question may be Jonathan Kuminga and a potential rookie-scale extension. Hard Cap: First Apron Trigger: Acquired AJ Griffin from the Atlanta Hawks (preexisting Standard Traded Player Exception or STPE) Projected Taxable Salary: $163.9 million ($6.
9 million below) Projected Room Under First Apron: $11,6 million The Rockets triggered their hard cap by using the Kevin Porter Jr. trade exception (generated last October) to take on Griffin. Houston has several players on favorable contracts (Jeff Green, Jae'Sean Tate and Jock Landale) should an intriguing trade arise.
Or the Rockets could use most but not quite all of the NTMLE to sign a free agent, although they already have 15 guaranteed regular contracts. Impact of New Rules: Marginal Hard Cap: Second Apron Trigger: Sent $1 million in cash to the San Antonio Spurs for the rights to Johnny Furphy (No. 35) Projected Taxable Salary: $170.
4 million ($400,000 below) Projected Room Under Second Apron: $16.1 million The Pacers historically avoid luxury taxes and should be safe this year as well, although Myles Turner, Obi Toppin and TJ McConnell have a combined $2.5 million in unlikely incentives).
Indiana was motivated by the new rules last year to overpay Brown from the Nuggets, but it later flipped him in the deal for Pascal Siakam. Despite boasting one of the league's lowest payrolls, the team went from the lottery to the Eastern Conference Finals. Impact of New Rules: Beneficial Hard Cap: First Apron Trigger: Signed Nicolas Batum to a two-year, $9.
6 million contract (BAE) Projected Taxable Salary: $173.3 million ($6.2 million penalty) Projected Room Under First Apron: $4.
9 million The Clippers seemed to hit a wall year after year with the Kawhi Leonard/Paul George combo. Now George is with the Philadelphia 76ers, and L.A.
's tax bill has dropped massively from last year's $142.4 million. The team is different, but it remains to be seen how successful it will be this year.
Impact of New Rules: Significant change, but a needed one? Hard Cap: None Trigger: None Projected Taxable Salary: $188.2 million ($53.2 million penalty) Projected Room Under Second Apron: About $45,000 The Lakers kept both draft picks (Bronny James at No.
55 and Dalton Knecht at No. 17), and all their players with options chose to stay another year (D'Angelo Russell, Christian Wood, Cam Reddish and Jaxson Hayes). Based on roster space and the second-apron limitation, they had no room to add after re-signing LeBron James and Max Christie.
The Lakers can add players on minimum contracts to go over the second apron since they aren't hard-capped, but that line is an internal limit. Any changes may need to include a salary-reducing trade. Impact of New Rules: Paralyzing? Hard Cap: None Trigger: None Projected Taxable Salary: $170 million (about $800,000 below) Projected Room Under Second Apron: $4.
7 million The Grizzlies don't pay luxury taxes, so they'll need to make sure Desmond Bane, Luke Kennard and Brandon Clarke don't hit their combined $3.4 million in unlikely incentives. Otherwise, they'll have to make a trade to trim a bit more salary.
The moves to trade Steven Adams last season and Ziaire Williams this offseason were probably less about the new rules and more about avoiding the tax. Impact of New Rules: Marginal Hard Cap: None Trigger: None Projected Taxable Salary: $184.8 million ($25.
9 million penalty) Projected Room Under Second Apron: $1.6 million Will the Heat give Jimmy Butler an extension? They may choose not to reinvest into long-term second-apron territory. That didn't stop them from signing Bam Adebayo to an extension, though, so it's TBD how the financial decisions impact team chemistry this season.
Miami also let Caleb Martin walk in free agency, made minimal free-agent additions (outside of Alec Burks at the minimum) and may be considering reducing payroll further before the 2025-26 campaign. Impact of New Rules: Potentially significant, or was it time to start planning for a Jimmy-less future? Hard Cap: None Trigger: None Projected Taxable Salary: $193.1 million ($74.
8 million penalty) Projected Second Apron Overage: $6.5 million The Bucks are all-in with Giannis Antetokounmpo and Damian Lillard. The supporting cast is aging, but Milwaukee was able to add three veterans on minimum contracts (Gary Trent Jr.
, Taurean Prince and Delon Wright) who otherwise might not have been available if other teams weren't also facing difficult financial decisions. The Bucks can't spend much, but they may have gotten better without needing to. Impact of New Rules: Limiting, sort of.
.. Hard Cap: None Trigger: None Projected Taxable Salary: $205.
6 million ($105.6 million penalty) Projected Second Apron Overage: $17.1 million With large extensions kicking in for Anthony Edwards and Jaden McDaniels, Minnesota is spent.
The team must win with what it has or marginal changes through player development and/or minimum players. The bigger question will be when Naz Reid can opt out of his contract to explore free agency next year. The Wolves can pay him, but will they? Impact of New Rules: Limiting Hard Cap: First Apron Trigger: Acquired Dejounte Murray from the Atlanta Hawks (ETPE) Projected Taxable Salary: $172.
5 million ($2.5 million penalty) Projected Room Under First Apron: $4.3 million The Pelicans are another franchise notorious for ducking the tax.
Last season, the team similarly started above the threshold but dumped Kira Lewis Jr. to get under before it was too late. Look for New Orleans to follow a similar path, though that may be in a larger move centered around Brandon Ingram since paying to keep him long-term may be similarly taxing.
Impact of New Rules: Marginal Hard Cap: Second Apron Trigger: Acquired Mikal Bridges from the Brooklyn Nets (Aggregated Standard Traded Player Exception or ASTPE) Projected Taxable Salary: $79.2 million ($13.4 million penalty) Projected Room Under Second Apron: $3.
9 million The Knicks have navigated the salary cap as well as any franchise over the last few years. The team circumvented the first-apron trigger by including Shake Milton (via sign-and-trade) in the Bridges deal. The significant loss was Isaiah Hartenstein, but even under the old rules, it's unlikely New York would match the $87 million over three years he got from the Oklahoma City Thunder (though the third year is a team option).
Impact of New Rules: Slightly inconvenient Hard Cap: First Apron Trigger: Acquired Alex Caruso from the Chicago Bulls for Josh Giddey (ETPE) Projected Taxable Salary: $159.2 million ($11.6 million below) Projected Room Under First Apron: $17.
4 million The Thunder have one of the best rosters in the league, a respectable payroll under the tax and more draft capital in reserve than any other franchise. The bill will continue to come due as Chet Holmgren and Jalen Williams near extensions (next summer's problem), but for now, the team seems to be lapping the field. Impact of New Rules: Favorable Hard Cap: First Apron Trigger: Acquired Alex Caruso from the Chicago Bulls for Josh Giddey (ETPE) Projected Taxable Salary: $150.
4 million ($20.5 million below) Projected Room Under First Apron: $27.8 million The Magic opted not to invest too heavily in free agency, choosing an older veteran in Caldwell-Pope instead of giving out four-year deals to younger players (like Malik Monk).
That may be, in part, because Franz Wagner was just extended, Jalen Suggs is eligible, and Paolo Banchero will presumably get a max extension next summer. In the meantime, Orlando is in a strong position with an impressive young team. Impact of New Rules: Marginal Hard Cap: None Trigger: None Projected Taxable Salary: $181.
5 million ($17.7 million penalty) Projected Room Under Second Apron: $7.4 million The 76ers are a rare team that went from under the cap (with enough room to sign George to a deal starting at $49.
2 million) to the luxury tax (after re-signing Tyrese Maxey). The new rules didn't impact Philadelphia negatively, though it may have been the driving force for the Clippers' change in direction. Impact of New Rules: Beneficial Hard Cap: None Trigger: None Projected Taxable Salary: $225 million ($218.
2 million penalty) Projected Second Apron Overage: $36 million The Suns knew what they were getting into when they traded for Bradley Beal, committing to a significant payroll with a win-or-go-home roster. Last year, they went home. Will the result be different in 2024-25? Impact of New Rules: Limiting, but then the Suns went into the rule changes with eyes wide open.
Hard Cap: None Trigger: None Projected Taxable Salary: $167.1 million ($3.7 million below) Projected Room Under First Apron: $9.
5 million The Blazers did pay luxury taxes when competing at a higher level, but now the franchise is rebuilding. The move to get out of Malcolm Brogdon was a requirement to get out of the tax, but it yielded an excellent young player in Deni Avdija. Look for Portland to shed other veterans, but the new rules may make getting out of Jerami Grant more challenging (not for the Blazers, but for potential suitors).
Impact of New Rules: Marginal Hard Cap: First Apron Trigger: Acquired DeMar DeRozan via sign-and-trade from the Chicago Bulls (ETPE) Projected Taxable Salary: $167.6 million ($3.2 million penalty) Projected Room Under First Apron: $7 million Sacramento was able to retain Malik Monk while adding DeMar DeRozan.
Getting out of Harrison Barnes' contract was needed to stay under the tax, but the new rules didn't seem to limit this summer's Kings. Impact of New Rules: Marginal Hard Cap: None Trigger: None Projected Taxable Salary: $145 million ($25.8 million below) Projected Room Under First Apron: $27.
2 million The Spurs didn't wait long to use their cap space, signing Chris Paul and acquiring Harrison Barnes from the Kings. San Antonio may be the only team close to rivaling the Thunder with draft capital. With Victor Wembanyama and tremendous flexibility, the Spurs have a bright future.
Impact of New Rules: Used cap room more quickly Hard Cap: First Apron Trigger: Acquired Sasha Vezenkov from the Sacramento Kings for Jaden McDaniels (ETPE) Projected Taxable Salary: $161.5 million ($9.3 million below) Projected Room Under First Apron: $10.
5 million Perhaps the new rules led to the Siakam trade, but the Raptors had been heading for a rebuild for several years. With Scottie Barnes, Immanuel Quickley and RJ Barrett, the franchise should be able to avoid bottoming out like others on this list. Look for Toronto to find a suitor for Bruce Brown before the trade deadline.
Impact of New Rules: Marginal this offseason Hard Cap: First Apron Trigger: Acquired Russell Westbrook from the LA Clippers for Kris Dunn (ETPE) Projected Taxable Salary: $136.9 ($33.9 million below) Projected Room Under First Apron: $40.
6 million With Lauri Markkanen getting the maximum he can from the Jazz in renegotiation and extension, the team may still have roughly $13 million in cap space. Markkanen won't be trade-eligible this season, but others are, and it's unclear how focused the Jazz will be on winning this year or on retooling. Bottoming out to maximize draft position can damage the development of young players like Keyonte George, Walker Kessler, Taylor Hendricks, Isaiah Collier and Cody Williams.
Impact of New Rules: Marginal Hard Cap: First Apron Trigger: Acquired Malcolm Brogdon from the Portland Trail Blazers for Deni Avdija (ETPE) Projected Taxable Salary: $158.9 million ($11.9 million below) Projected Room Under First Apron: $11.
6 million It's difficult to peg exactly what direction the Wizards are heading, signing a veteran center like Jonas Valančiūnas while giving up Avdija for Brogdon. Some sources around the league think Valančiūnas was signed to be dealt with once his trade restriction lifts in December. Whatever the answer, the Wizards don't seem to be significantly hampered by the 2023 CBA.
Impact of New Rules: Marginal.
