One of the early interpretations of the NBA’s new collective bargaining agreement was that it would significantly affect the behavior and spending of the most expensive teams in the league. An extremely punitive second apron that limits what front offices can do while also making additional salary even more costly with stronger luxury-tax hits paints a pretty clear picture.
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If that is true, why have we seen the Phoenix Suns, Boston Celtics, Milwaukee Bucks and LA Clippers load up rather than tone down?
That answer hinges on timing and punishments. While owners and players agreed to a CBA that unambiguously makes it tougher on expensive squads, they also understood that it would be unfair to have all those changes and punishments kick in for the very first year, particularly since so many contracts run for multiple years and many of the changes like the second apron and frozen picks are completely new rather than slight modifications of existing rules.
To set the stage a bit: The new CBA creates a dividing line called the second apron $17.5 million above the luxury-tax line, which will shift year to year as the salary cap changes but stay a significant amount beyond the tax line. Teams over this threshold face real limitations in that season, such as not being able to use the midlevel exception, much tougher trade rules and steeper luxury-tax payments, but the biggest effects happen when franchises stay over that line for longer than one season. The most significant of those is the “frozen pick,” which first prevents teams that finish a season over that second apron from trading their first-round pick seven years out and can actually move that selection to the end of the round if they stay over the second apron for at least two of the following four seasons. (Note: Teams can “unfreeze” their pick by staying under the second apron for a few years, but that process takes a while and the pick remains untradeable unless and until it is unfrozen.)
The new luxury-tax system that lowers the price tag for teams slightly over the line but dramatically increases per-dollar costs the deeper a team goes kicks in for the 2025-26 season, while some of the restrictions on how these most expensive teams can do trades start in the 2024-25 campaign.
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That second one is more crucial for explaining what happened over the past few months, as the new CBA makes it so much harder for these second-apron teams to acquire talent. Starting next summer, those front offices will no longer be able to aggregate salaries (combining a few different players to match the salary for a more expensive one). The salary-matching rules themselves are also getting more restrictive as the CBA transitions from these franchises being able to take on 125 percent of the salaries they send out down to 110 percent now and just 100 percent (so not adding salary at all) starting next offseason.
If you look at those changes altogether, this offseason makes significantly more sense because none of the three biggest trades of the summer or the Clippers’ acquisition of James Harden would be possible a year from now. Phoenix both added salary and aggregated contracts to acquire Bradley Beal while Milwaukee took on more money than it sent out to bring in Damian Lillard. The Celtics did both in their Jrue Holiday deal, and the Clippers did both to add Harden. Even if each of those deals does not work out in time, it was basically now or never for these teams that will clearly be over the second apron next summer.
Another key factor to consider is that being proactive right now yields other benefits in terms of avoiding eventual punishment. The “frozen pick” restriction does not kick in until 2024-25, and the most severe draft pick consequences require being over the second apron for multiple years after that point, so the Celtics, Bucks, Suns and Clippers get a window now to go hard after a championship even if they eventually make their way out of the second apron to escape the brunt of the league’s penalties. That said, I expect at least one of that group to deal with the frozen pick, potentially the Clippers if Kawhi Leonard and Paul George re-sign via extension or new contracts next summer.
This actually puts the new CBA firmly in line with its predecessors in a funny and somewhat frustrating way, as each agreement pulls up the ladder by making it harder for some franchises to add or retain talent but does so after the teams that inspired the new restrictions are deeply affected by them. It seems pretty clear the Warriors and Clippers motivated at least the owners to shift the landscape so drastically, and while the new CBA absolutely changes how they do business, they are far enough down the road that they should be able to handle the new rules and also avoid those most extreme consequences like the frozen pick if they so desire.
As is so often the case, the actual losers (beyond players who want to be a part of the best teams and those wanting to leverage those spenders for big contracts) are the next generation of expensive teams. We are a few years away from franchises with exciting young cores having to make decisions their predecessors and competitors have never had to face without that adjustment time, and odds are that next crop will not have as many major markets since the current crop already includes a fair amount of heavy hitters.
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That does not make the new restrictions a poor idea in and of themselves, and I’m a big fan of the restructured luxury tax since being cheaper at the start and escalating makes a ton of sense for teams individually and the league as a whole. Instead, these restrictions reflect the awkward tightrope owners and players walk as a more reactive than proactive body, though focusing more on building the best system rather than addressing the frustrations of the day would likely yield a more stable and fair system.
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(Photo of Giannis Antetokounmpo and Damian Lillard: Benny Sieu / USA Today)