Celtics salary cap implications after Jaylen Brown’s historic supermax contract

The Boston Celtics are evading the NBA’s daunting second apron by a hair — though they’ll have to make some tough roster decisions next summer if they’re going to avoid the pitfalls of the collective bargaining agreement’s newest wrinkles.

The Celtics signed Jaylen Brown to the richest contract in NBA history — a five-year, $304 million deal — and with Jayson Tatum’s presumptive supermax extension set to kick in in 2025, Boston is set to commit a large chunk of its payroll to the top-two players on a championship-contending roster.

Factor in the newly acquired Kristaps Porzingis, who has three years worth $96 million remaining on his contract, and the Celtics will be committing close to 78% of their salary cap to the top three players on the roster.

That’s before Tatum’s supermax — loosely projected to pay $57 million in Year 1 and close to $334 million over the five-year life of the contract — kicks in in 2025.

It’s a celebratory moment for Boston nonetheless: if Porzingis is a fit as the third star alongside Brown and Tatum, the Celtics will have formed a legitimate Big 3 set to compete for championships for the next five years.

The new CBA, however, ushers in two new wrinkles the Celtics will need to maneuver in the coming years in order to fill out a championship-contending roster without suffering from the newfound ramifications that impact team building.

The first of those wrinkles is the concept of cap smoothing, which wasn’t in place when the Golden State Warriors poached Kevin Durant from the Oklahoma City Thunder in 2016.

The Warriors were able to do so because the NBA renegotiated its television broadcast rights deal, which is included in the basketball-related income that determines the salary cap and player salaries. In the blink of an eye, the salary cap exploded 35 percent from $70 million to $94 million.

The Warriors, who were already underpaying Stephen Curry, were able to sign Durant to a two-year, $54M deal with straight-up cap space.

We all remember what happened next.

So did the NBA’s owners, because the concept of cap smoothing is a direct response to the route the Warriors took to win back-to-back championships after acquiring Durant.

According to the CBA, cap smoothing means the salary cap cannot increase or decrease by more than 10% in any single salary cap season. The NBA is set to renegotiate its broadcast deal again in 2025, but this new wrinkle puts a cap on just how much of a spike the teams will see in payroll.

This is important because Tatum’s presumptive extension is set to kick in the same summer the NBA will renegotiate these broadcast deals, and had cap smoothing not been incorporated into the new CBA, his projected $23M raise wouldn’t hinder Boston’s ability to keep a championship contender together.

That’s just one of the wrinkles Boston’s front office will have to maneuver. The other is the newly implemented second apron.

Teams that have a payroll rising $17.5 million above the luxury tax line will be known as second-apron offenders. The 2023-24 NBA luxury tax line sits at $165.3 million, meaning Boston’s current estimated payroll of $178.5 million avoids the second apron by only $4.3 million.

The Celtics are already over the first apron line of $172.3 million, and as a result, they cannot sign any buyout market candidates whose original salary exceeded the current project non-taxpayer mid-level exception of $12.3 million this season. The Celtics cannot acquire a player whose incoming salary is more than 110% of the salary of the outgoing player, and at the end of the 2023-24 season, they will be both unable to take back more than 100% of the outgoing player’s salary and unable to use any traded player exception created this upcoming season.

If the Celtics become second apron offenders, however, the penalties become much stiffer.

The Celtics will have their 2032 first-round NBA Draft pick frozen if their payroll exceeds the 2024-25 second apron, which could range anywhere from $191.9 million (five percent) and $201 million (10 percent) based on the year-over-year increase in salary cap. If they are second apron offenders in any two of the following four seasons, that 2032 first-round pick will automatically be moved to the end of the draft order at pick No. 30.

As potential second-apron offenders, the Celtics could also be unable to use the projected $5.3 million taxpayer mid-level exception in 2024, unable to send cash considerations as part of any deal, and unable to acquire a player via sign-and-trade.

That’s only if the Celtics don’t do some cost-cutting.

The second apron line increases at the rate of the salary cap, and the cap spiked 10 percent from $123 million to $136 million this summer alone. If the salary cap spikes another 10 percent, the second apron will rise to $201 million, giving the Celtics enough room to both re-sign Pritchard to a deal paying a Year 1 salary of close to $8 million and also sign their 2024 first-round NBA Draft pick.

If the cap only increases, say, five percent, however, things get murky, because the Celtics already have $190 million in player salaries committed to the 2024-25 season, and a five percent increase in second apron brings us to just $191 million,

Decisions, decisions.

The Celtics are one of a number of teams that will have to perform cap gymnastics to avoid the penalties imposed by the CBA’s new second apron.

Then again, there may not be a cap on spending for a team that’s arm’s distance away from its 18th NBA championship banner.

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from Boston Herald https://ift.tt/2FrkwS7