NBA front offices have yet to receive the league’s new collective bargaining agreement that begins June 30 for the 2023-24 season on, but the string of trade activity throughout this NBA Draft week has already shown how seriously teams are taking the updated CBA’s new salary cap restrictions. The introduction of a second tax apron and the further team-building limitations that come with it are so punitive, even the heavy-spending Golden State Warriors acquired veteran point guard Chris Paul on Thursday with one mind on future financial savings, league sources told Yahoo Sports.
The Warriors targeted Paul as part of another championship run behind Steph Curry, but Golden State sent fourth-year guard Jordan Poole to Washington, plus a protected 2030 first-round pick and a 2027 second-rounder to acquire him. Just a week ago, Phoenix was searching for three-team trade scenarios to offload Paul’s $30.8 million salary for the 2023-24 campaign, but the Suns’ lack of draft capital presented one of several challenges to move Paul’s contract and receive something worthwhile for the 38-year-old. Flash forward to draft day, and the Warriors were the team giving draft compensation back to Paul’s new club, the Wizards, following Washington’s blockbuster deal that shipped All-Star guard Bradley Beal to Phoenix. But that was the cost Golden State had to pay to offload Poole’s own pricey contract, a four-year, $128 million deal that’s set to kick in next week.
The upcoming salary cap is currently projected at $136 million, with a first tax apron standing at $172 million and the daunting second apron at $182 million. Crossing the first threshold brings a ban of that team’s access to the valuable mid-level exception, and passing the second apron will make it far more difficult for teams to match salaries in trades, then beginning with the 2024-25 season, even freeze a team’s future draft capital for repeat offenders. That’s an oversimplification, and only three teams, on average, have exceeded that second apron amount that will rise at the same rate as the cap, but front offices are certainly trying to keep it to a limited number of teams in the annual danger zone.
The Warriors are looking at roughly $190 million on their cap sheet next season, and that’s before conversations with versatile forward Draymond Green, who declined his player option to become a free agent. Klay Thompson, set to make $43.2 million next season, is also eligible for his own mammoth extension after helping lead the franchise to four championships since 2015.
These harsher tax restrictions were implemented with teams like Golden State and the Los Angeles Clippers in mind, limiting the freedom for cash-flush contenders to outspend competition across the league. The immediate returns seem to suggest that’s worked. Now the Warriors have already sought Paul’s entirely non-guaranteed salary for the 2024-25 season, which could save Golden State about $30 million compared to if Poole’s deal were still on the books. The Warriors even traded Patrick Baldwin Jr., the team’s No. 28 pick in last June’s draft, for the No. 57 selection Thursday night, roping that into the Paul trade with Washington and allowing Golden State to save $1.2 million on its cap sheet and upward of $7 million in luxury tax savings — all according to cap projections provided to Yahoo Sports.
Moving Poole also highlights a noted shift in Golden State’s team-building approach, which began with dealing former No. 2 pick James Wiseman at February’s trade deadline. The Warriors’ fabled two-timeline strategy is in the rearview mirror. Golden State also held serious conversations with Indiana about trading Jonathan Kuminga, the No. 7 pick in the 2021 draft, for a package centered around the No. 7 pick on Thursday, sources said. Perhaps the Warriors could still move the 20-year-old forward this offseason. The Warriors did not seem to be widely shopping Poole’s contract, but they were clearly open to moving him. San Antonio registered interest in Poole, league sources told Yahoo Sports, although the Spurs never made a significant offer. There were also conversations between Golden State and Boston, sources said, about sending Poole to the Celtics, before Boston went forward and traded Marcus Smart in the three-team trade with the Grizzlies that brought Kristaps Porziņģis to the TD Garden.
In all of Washington’s trade talks, the Wizards told rival teams they were prioritizing short-term salary, sources said. Poole’s was the only significant future number that landed back on Washington’s books, which has led some opposing executives to wonder whether the Wizards will look to move Poole again at some point prior to next year’s trade deadline. For what it’s worth, Golden State is under the impression Washington intends to keep Poole, sources told Yahoo Sports. But trading Poole, who signed a nearly identical contract to Tyler Herro’s last summer, has only increased speculation from team personnel that the Miami Heat will explore avenues to deal Herro’s own lucrative extension before it even begins — also with consideration to the Heat’s run to the NBA Finals without Herro in the active lineup due to a broken hand.
This noticeable zag makes Phoenix’s zig to acquire Beal and the four years and $200-plus million remaining all the more splashy, and you might as well consider it contrarian. The Suns’ payroll will surpass $160 million with just the salaries of Beal, Kevin Durant, Devin Booker and Deandre Ayton under new team owner Mat Ishbia. Whether or not Phoenix ends up dealing Ayton to another team in exchange for two or more players at smaller numbers, the Suns will be forced to outfit the majority of their roster with minimum contracts. Phoenix is essentially barren in terms of draft ammunition to make further improvements in case of injury or other needs for roster adjustments. This super-team model has surely paid dividends for the Warriors and Durant in the past, but also introduces much thinner margins of error if health and interpersonal struggles ever arise.
Phoenix clearly doesn’t give a damn. The Suns watched Denver’s steady, homegrown contender burst past them in Games 5 and 6 of the Western Conference semis, then eventually claim this year’s championship, and the Suns doubled down on stripping their draft assets for All-Star scorers. All while most other teams in the NBA are running from such a tax bill and heading straight for the hills.
Look closer at Dallas trading down from No. 10 to No. 12 with Oklahoma City, and you’ll notice the Mavericks dumping the final two years and $33 million of Dāvis Bertāns’ contract in the process. Later in the first round, Sacramento then traded the No. 24 pick to Dallas in order to move Richaun Holmes, who’d become buried on Mike Brown’s bench along with the final two years and nearly $25 million left on the center’s contract.
“Those two trades were signals that teams are trying to get aggressive moving future salary,” a team cap strategist told Yahoo Sports.
League personnel are anticipating the chance for some atypical trade activity between the conclusion of the draft and the start of free agency. The new CBA also brings a mandate that all teams reach 90% of the salary cap by the start of training camp, which will further incentivize salary-cap-space teams — like the Thunder — to take on salary in exchange for draft compensation.
There are still a handful of trade candidates that could be on the move with money matters in mind, most notably in Atlanta. In addition to previously reported dialogue between the Hawks and Pacers about trading forward De’Andre Hunter to Indiana, there were also significant talks between Atlanta and Detroit about moving Hunter to the Pistons, league sources told Yahoo Sports. The Hawks also re-engaged the Jazz about trading John Collins to Utah, sources said, but no deals for Atlanta’s veterans ever materialized.
Let’s see if one of those frameworks comes to fruition further in the summer.
For now, we know this offseason of financial tinkering has just begun.