Is the NBA’s Second Apron Preventing a Mess or Creating One?

Getty Images/Ringer illustration New rules are preventing the highest-spending teams from making moves. How will it affect the NBA? "We're already seeing it," says one NBA exec. To grasp NBA competition in the Year of Our (Time) Lord 2024, you first must embrace the apron. And not the one you wear to protect your finest designer shirt from wayward splatters of olive oil. This isn't about kitchen couture. No, skip past the primary "apron" definitions at dictionary.com, past all references to garments, golf courses, and boxing rings or conveyor belts, driveways, and dams. Scroll to the 19th entry, the one referencing "a structure erected around another structure, as for reinforcement." That, more or less, describes the apron that will shape the NBA for the foreseeable future, subtly influencing every decision, every trade, every signing, and every possible transaction. "We're already seeing it," says one longtime team executive. Look to Los Angeles, where the Clippers are weighing a divorce with Paul George. Or to San Francisco, where the Warriors might say farewell to Klay Thompson. Or to Denver, where the Nuggets could lose Kentavious Caldwell-Pope, one of the keys to their 2023 title. Or to Phoenix, where the Suns are burning out hard drives in a desperate search for a loophole that might let them sign a single serviceable role player. Some teams will find it extremely difficult to make trades. Some teams will trade players they'd prefer to keep. All because of an apron. A second apron, to be precise. Oh yes, there are two of them! And they are now the bane of just about every general manager working in today's NBA. If you're already sick of hearing about aprons, we get it (but get used to it). If you're puzzled by the name, we get that too (and we'll explain later). If you just need a straightforward explanation of what the apron even does, well, please read on. We'll do our best to make it all make sense before free agency officially commences Sunday at 6 p.m. ET. The second apron—a new feature being implemented this year from the latest collective bargaining agreement—is just the latest mechanism to rein in the NBA's highest spenders, another line in the payroll sand, following the salary cap (adopted in 1984), the luxury tax (1999), the even harsher luxury tax (2011), and countless other wrinkles along the way. The league, in its perpetual quest for competitive balance, is forever setting boundaries … only to watch the billionaire owners blow past them, in a perpetual quest for glory. Witness the Warriors, who spent $346 million in payroll and luxury tax penalties on their way to the 2022 championship, three times more than the official salary cap that season. Or the Clippers, who have spent $366 million alone in luxury taxes over the past three seasons. It's all fine and legal—just not what NBA officials would prefer in a league of 30 teams with varying market sizes and revenue streams. "We want to have the strongest possible competition across the league that we can," explains Dan Rube, the NBA's executive vice president and deputy general counsel and one of the chief architects of the league's labor deal. "That benefits players, it benefits teams, it benefits fans, it benefits the business. We're going to have the strongest possible competition if we don't have a few teams each year far outspending the rest." Enter the dreaded second apron—and a dastardly new menu of penalties for the NBA's highest spenders. Next season, teams that exceed $190 million in player salaries—roughly $50 million above the estimated salary cap—will forfeit most of the tools they use to add talent. It's a long, complicated list of restrictions. They're prohibited from acquiring players in sign-and-trade deals—or from using their own free agents in a sign-and-trade. They won't be allowed to aggregate multiple players to send out in a trade. They can make one-for-one trades only if they take back the same (or less) salary—but not a single penny more than they send out. They lose the use of any existing trade exceptions. They're banned from including cash in any trade. They can't buy draft picks. Essentially, a second-apron team is boxed in, left with limited trade options and the ability to sign only minimum-salaried players. Phoenix—with a projected league-high payroll of $206 million next season, most of it tied up in Kevin Durant, Devin Booker, and Bradley Beal—is the new second-apron poster child. They badly need more size, playmaking, and shooting, but the new rules will make it nearly impossible to supplement their stars. "They're as hosed as you can be, for a team with two of the best players in the league," says a rival team executive. They're not alone, though. The Clippers have been hesitant to sign George to the massive extension he's seeking because of the second apron. The Warriors would love to add veteran talent to make another title run with Stephen Curry, but the apron is in the way—and could hasten Thompson's departure in free agency. The Nuggets, whose lack of depth arguably cost them a shot at defending their title, might have difficulty adding players—and might lose Caldwell-Pope, a free agent, to a team with more payroll flexibility. (Their dire situation became evident Thursday, when the Nuggets traded Reggie Jackson to Charlotte in a salary dump.) In a world with no aprons, none of these teams would be facing such a crisis, just massive tax bills that their billionaire owners would happily pay. "Paul George would already be done"—meaning, already signed to an extension with the Clippers, says another Western Conference exec. But the new rules are "going to change the way those teams function." Some of the wealthiest owners—including Clippers owner Steve Ballmer, who is the richest in the league—don't mind paying tens or even hundreds of millions in luxury taxes if it means a chance to win a title. But those same owners (and their GMs) surely will mind losing all the tools to keep adding talent. And if a team can't contend for titles, it's far more likely that team will also rein in its spending, which also furthers the league's aims. "One is to deter the higher spending in the first place," says Rube. "And the second is to make the spending less effective for those teams that are going to spend up to those levels, and to try to level the field that way." The salary cap next season is expected to be $141 million, according to the most recent projections (which are subject to change in early July, after the league completes its accounting). The luxury tax kicks in at $171 million, with the first apron set at $179 million. At the moment, at least six teams are over the second apron—the Warriors, Clippers, Suns, Celtics, Bucks, and Timberwolves—while several others, including the Knicks, Nuggets, Lakers, and Heat, are in danger of hitting it. The Lakers have outright declared they will do everything possible to avoid that fate, which has to be encouraging to league officials and small-market owners. Concerns over profligate spending and competitive balance go back at least four decades, to the creation of the NBA's original salary cap in the early 1980s. But the league has always had a so-called "soft" cap, allowing teams to exceed the limit by using a variety of "exceptions"—the Bird exception, the midlevel exception, the biannual exception, etc. So teams keep spending, some more wildly than others, and the league keeps inventing new ways to restrict them, employing everything short of an actual hard cap, which the players union adamantly opposes. The league introduced a luxury tax, then created harsher versions of the tax. In 2011, the league created the first "apron," which penalized the highest spenders by making trades harder and eliminating certain cap exceptions. It still wasn't enough to deter some teams (usually in large markets) from wildly outspending their rivals (usually in smaller markets). There's no perfect correlation, of course, between high spending and success, but the trend lines have been pretty stark. Fourteen of the past 18 champions in the NBA paid the luxury tax, according to an analysis by Lev Akabas of Sportico, who noted, "If you want to win a championship in the NBA, you have to be in the upper quartile of spending." The irony in all of this is that the NBA is experiencing an era of unusual parity, with six different champions in the past six seasons and nine franchises making at least one Finals in that span. But the trend lines were nevertheless concerning to league officials. "The data continues to show very convincingly that, on average, the teams that are spending the most are winning the most," Rube says. "And we were seeing that in particular for these teams that were spending above what the second-apron level represents." If the second apron were in effect this past season, five teams would have exceeded that extreme payroll level, Rube said. Two seasons ago, it would have been seven. But in earlier years, it would have been only two or three. "That's the system not really acting in a way I'd say anyone ever intended for it to act, on any kind of steady-state basis," Rube says. With so many high spenders now working feverishly to reduce their payrolls and "duck" the second apron, some team executives and pundits are calling the system a virtual hard cap. It isn't, of course, because teams can still spend beyond the second apron (and some absolutely will). It's also true that, historically, only a handful of teams were wildly outspending their rivals each year—which means that most of the league was already operating well below the punitive new threshold. (Also worth noting: The NBA's new labor deal guarantees the players will receive 51 percent of "basketball-related income," which is what determines the salary cap. In essence, that 51 percent is a hard cap on the combined income of all players in a given season. All the other rules are just a means of distributing that money among the 450 players.) Ripple effects of the second apron were apparent in the draft earlier this week, where we saw countless teams shuffling around (or selling off) picks to save a few million in cap room. Brad Stevens and Rob Pelinka both voiced concerns recently that the new apron will inhibit the trade market. The league notes that the new system also helps foster trades by allowing non-taxpaying teams to use their midlevel exception (worth around $12 million) as a trade slot. "The vast majority of teams do stay below the first apron every year," Rube says, "so those teams aren't really practically impacted, and they get more transactional flexibility." Ron Klempner, the general counsel and lead negotiator for the National Basketball Players Association, notes that only around three teams per season would have been affected by the second apron if it had been in place in recent years. Which means most teams won't feel its effects in an average season. The new labor deal also provided players with easier, more lucrative options to extend their contracts with their current teams. And the deal actually reduced luxury tax rates for teams closer to the tax line (while increasing rates for the highest spenders), which also should provide more flexibility in the marketplace. "We want more teams involved in the bidding," Klempner says. "There'll be opportunities that are opened up." Will the new system actually lead to greater competitive balance? Or just induce migraines for GMs and fans? Will the second apron truly become a de facto hard cap? Or will the top contenders keep spending wildly and accept all the brutal consequences? Will sustaining a championship roster beyond a few years become impossible? Will the defending champion Celtics have to break up their core prematurely? As with every new cap wrinkle, we might not know for a few years. And how did we get this silly term in the first place? It was born during the 2011 negotiations, when the NBA and players association were battling over a raft of proposed penalties for the highest spenders, including the loss of various exceptions and trade options. The league wanted to set the trigger at the luxury-tax line. The union pushed back, proposing that teams be allowed to wade into the tax without instantly incurring the new penalties. They settled on a $5 million buffer (a "fudge factor," Klempner says). They dubbed it "the apron," though no one can recall who said it first, or why they didn't come up with a better name. "An apron is a small area next to a bigger one," Rube reasons. "There would be an area above the tax level where you would still be a high spender, but not yet hit the new restrictions. And so that's why it was called an apron." Klempner, an avid theatergoer, likens it to the apron of a stage. "When you're on the apron of the stage, it's a little extended piece. So it essentially extends the tax threshold. You can go and venture out onto that, and you're still OK. You're not in the audience. You're still on the stage." One team executive put a more wry spin on the term, suggesting the two aprons were more like baby bibs for any owners who might be crying over the new limits. Which brings us back to the primary definition, "a garment covering part of the front of the body … for protecting the wearer's clothing." The looming question for the NBA is whether its new apron is preventing a mess, or creating a new one?

Is the NBA’s Second Apron Preventing a Mess or Creating One?

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