3 teams facing salary cap crises this offseason

Highlights

• NBA teams with supermax contracts face payroll issues due to the new CBA tax thresholds, and will need to shed payroll.
• The New Orleans Pelicans may have to choose between Brandon Ingram and Zion Williamson due to payroll constraints.
• The Boston Celtics will also need to make financial decisions, possibly trading Jaylen Brown to get under the luxury tax.

In the 2023 offseason, the NBA and the players’ union agreed to a new Collective Bargaining Agreement, or CBA. This agreement laid down the foundation for new tax thresholds that would affect teams with a high enough payroll. Now, several teams will be facing issues in the coming offseason in regards to their payroll.

The new CBA outlines tax thresholds that will apply to teams going over a certain amount of salary. Once a team’s payroll reaches a certain threshold, or apron, additional taxes would be added onto their overall payroll, among other severe penalties. This encourages teams to shed high contracts in order to avoid those hefty penalties, and clear payroll for the following season.

Teams that will be affected by this new CBA are mostly those who feature players signed to supermax contracts. Introduced in the 2017 CBA, the Designated Veteran Player Extension — better known as the supermax contract — allows teams to extend veteran players to a five-year deal for an amount up to 35% of the salary cap, and increases of 8% each season.

These supermax contracts, understandably, clog up a team’s payroll. Since the NBA operates with a salary cap, which will be upped to $141 million next season (it is currently $136 million, so an increase of $5 million), the supermax contract takes up a significant amount of the payroll. These contracts are reserved for the biggest of superstars, so if these teams are seeking to move the contracts to avoid the luxury taxes, it could result in major stars being on the move this offseason.

3 New Orleans Pelicans

The Pelicans have three massive contracts and will most likely have to move one

The New Orleans Pelicans are in an interesting situation. They are seventh in the Western Conference at 34-24, ten games over .500. They are therefore in a playoff spot, and with a pretty talented roster featuring a mix of expensive veterans and young players due to receive raises, it raises the question of what this team will look like come next season.

The Pelicans currently employ three players making over $30 million each in salary this season. Zion Williamson has been the star of the team since he was drafted in 2019, though he’s missed significant time due to injury. He signed a five-year rookie extension in the summer of 2022 and is currently making $34,005,250 for this season.

Meanwhile, C.J. McCollum makes the most on the team, with a 2023-24 salary of $35,802,469. That leaves Brandon Ingram, who is making $33,833,400 this season. These figures, combined with the fact that the Pelicans are a smaller-market team and have some young talent who will be set to receive raises in the coming years, mean that they will be in a financial situation come the 2024 offseason.

“New Orleans has to make a decision between Zion [Williamson] and [Brandon] Ingram. I think that happens this summer”-An Eastern Conference executive regarding the Pelicans’ financial situation

It appears unlikely that the Pelicans will trade Williamson. He has become the face of the current franchise and is a home-grown talent who has provided the most value for the team, when on the court. McCollum also appears unlikely, as the Pelicans will struggle to move that contract and would not get the same value in return.

According to Howard Beck of The Ringer, several NBA executives believe the Pelicans will have to choose between Williamson and Brandon Ingram, but ultimately believe it will be Ingram that is moved. Ingram is averaging 21.4 points per game this season, with 4.9 rebounds and 5.8 assists. His age also is a major factor, as he is only 26, playing heavily in the Pelicans’ favor.

As of this point, the Pelicans only possess $1,929,468 in cap space. New Orleans will therefore have some major moves to consider this offseason if they wish to avoid the luxury tax.

2 Minnesota Timberwolves

The Timberwolves feature multiple large contracts

The Minnesota Timberwolves are having an outstanding season. They are in first place in the West and are a championship-or-bust team that possesses a dynamic duo in Rudy Gobert and Karl-Anthony Towns, the centerpiece. They are also anchored by young phenom Anthony Edwards, who has played above and beyond expectations. He is due to get a hefty raise shortly.

With that being said, the Timberwolves are in a situation. Regardless of if they win the championship this year or fall short as has happened in the past, they will essentially be over the tax threshold. Gobert makes the most of the squad with a salary of $41,000,000 this season, but since the Timberwolves gave up everything to get him, it seems unlikely that he will be moved.

The next highest-paid player on the team is Towns, who is making $36,016,200 this season. He has a four-year, $224 million contract extension which goes into effect after this season, at which point his salary will jump to $49 million. Plus, with Edwards set to get a raise from $13.5 million this year to $35.2 million next year, NBA executives have agreed that Towns is the most likely player to be moved this offseason.

“How much tax are they going to pay when [Anthony Edwards’s] extension kicks in and KAT’s extension jumps?”-An unnamed Eastern Conference executive regarding Minnesota’s situation

Karl-Anthony Towns is the favorite to be traded this offseason, according to rumors. In addition to his salary, the Timberwolves would receive the highest return in Towns, as he is a superstar still in the prime of his career. This season, he is averaging 22.6 points per game, with 8.5 rebounds and 2.9 assists. Either way, the Wolves will have some heavy lifting to do this offseason.

1 Boston Celtics

The Celtics will have luxury tax issues as they already feature two supermax contracts

There is no denying that the Boston Celtics are far and away the best team in the NBA this season. They possess the best record in the league at 45-12 and feature the pieces, dynamics, and chemistry necessary to win a championship. Whether or not they do this year remains to be seen, but what is known is that there will be massive financial shakeups for them in the offseason.

With all the winning they have been doing this season comes a massive payroll, and Boston definitely features that. The Celtics are currently $51,398,467 over the salary cap, which definitely will not fly come the offseason. Therefore, they will have to shed a contract or two to get under the luxury tax threshold, and many NBA executives believe that Jaylen Brown will be the odd man out.

Brown signed a supermax contract with the Celtics this past offseason, which set records as the largest contract in NBA history. Brown is set to make a whopping $286.2 million over the next five years, with his salary increasing from $28,508,929 this season (the fourth-highest on the team) to $49,350,000 next season (the highest).

“I think [a trade is] realistic. Can you get 80 percent of Jaylen by keeping Derrick White and replacing Jaylen with a $20 million player instead of a $40 million player?”-A Western Conference executive regarding a Jaylen Brown trade

Despite Jayson Tatum being the star of the Celtics, he is only the third-highest-paid player on the team this season. He is making $32,600,060, while Kristaps Porzingis is making $36,016,200, and Jrue Holiday is at the top at $36,016,200. Brown is having a decent year, averaging 22.1 points per game, 5.5 rebounds and 3.8 assists. But with the Celtics sporting all of these high-figure contracts, something will have to give.

It is important to note that executives are not necessarily predicting that Brown will be moved, according to Beck, but the reality is that Boston will have to make moves, and they can see this move as making the most sense. They will command a hefty return for Brown, however, with it most likely taking multiple first-round picks and swaps, as well as established players to get the deal done. Whatever it costs, the Celtics will have to retool substantially.