City trade will limit Knicks’ flexibility under hard cap

Exactly one year after the Bucks, Trail Blazers and Suns completed a blockbuster trade involving Damien Lillard, Jrue VacationsAnd Deandre AytonTHE Knicks And Timber wolves – with the help of Hornets – were set to finalize their own blockbuster on Friday.

According to reports, Cities of Karl-Anthony travels to New York in exchange for a package including Julius Randle, Donte DiVincenzo, Keita Batès-Diopand a protected first-round pick.

Our full story includes more details and analysis on the pending trade, but I want to focus here on what the deal will mean for the Knicks from a cap perspective in 2024/25.

Remember, the Knicks are already operating above the first tax apron and capping themselves second apron in July by aggregating salaries in order to acquire Mikal Bridges from Brooklyn. A team that consolidates salaries into a trade is not allowed to exceed the second apron line of $188,931,000 for the remainder of the 2024/25 league year.

Meanwhile, a club operating on the first apron cannot take back more salary than it sends in a trade, meaning the Knicks must reach at least $49,205,800 in outgoing salary – that’s the ceiling reached by Towns for ’24/25.

So far, we know New York is sending Randle ($28,939,680), DiVincenzo ($11,445,000) and Bates-Diop ($2,654,644) to Minnesota. That works out to $43,039,324, meaning the Knicks must add another $6,166,476 to the deal.

They will get halfway by signing and trading DaQuan Jeffries in Charlotte. His new contract would start around $3 million, leaving the Knicks with another $3 million to send for matching purposes.

ESPN’s Bobby Marks reported Friday night (via Twitter) that Miles McBride is not included in the Knicks package. The club also cannot add minimum salary players to its package due to a rule that prevents teams from bundling multiple minimum salary contracts into larger contracts during the offseason. And it seems relatively safe to assume that key rotation players like Josh Hart And Mitchell Robinson are not included, otherwise this would have already been reported.

That leaves the Knicks with two options. They can reach the necessary salary adequacy threshold by also sending recruits Tyler Kolek ($2.09 million) and Pacôme Dadiét ($1.81 million). But the preferred solution would be to draft and trade another player to the Hornets or another team, giving that player a salary in the $3 million range.

The Knicks still have cap space on their books for Charlie Brown And Duane Washingtonboth of whom finished last season on two-way contracts with the team. Washington plays for KK Partizan in Serbia, so Brown is the most logical sign-and-trade candidate.

Using his non-Bird rights, the Knicks could give Brown a starting salary worth up to $2,685,229, meaning Jeffries’ starting salary would have to be $3,481,247 for the club reaches the required outgoing salary total. In theory, it’s doable, since New York owns Jeffries’ Early Bird rights. However, base year compensation rules would apply to Jeffries in this scenario, meaning his entire salary would not count for matching purposes.

In order to reach the match threshold using Jeffries and Brown, the Knicks would have to increase Jeffries’ first-year salary up to $6,962,494 – under BYC rules, his outgoing salary would count for 50% of that amount (3 $481,247).

But since Jeffries’ first-year salary was in the $3 million range, the plan might be to sign and trade him at that lower figure ($2,910,484 would work without triggering the BYC rules) and to add an additional player to the package. . Maybe it will be Kolek or Dadiet, or maybe the Knicks will find a way to extricate Washington from his Partizan contract in order to sign and trade him as well. We’ll see.

The Hornets, meanwhile, are able to play Jeffries — and maybe Brown, too — without returning salary using their $8 million room exception. They would be the first team to take advantage of the new rules allowing teams to use certain exceptions (the non-taxpaying mid-tier, the room and the bi-annual) to acquire a salary in a trade.

If we assume the trade is made using Randle, DiVincenzo, Bates-Diop and signed-and-traded players, the Knicks would end up with $185,351,521 in total salary for just 12 players. Their hard cap hit for the season is $188,931,000. That only leaves $3,579,479 of wiggle room, which is a bit of a problem.

The cap hit for any veteran free agent signing, including camp invitees like Marcus Morris, Landry ShametAnd Chuma Okekeis $2,087,519. Rookies or players with just one year of experience may have smaller minimum salary caps, but they still count for tax and apron purposes as players of $2,087,519. This “tax variance” rule is intended to prevent teams from passing up veteran free agents in favor of younger ones solely for financial reasons.

Carrying two minimum-salary free agents into the regular season would cost more than $4 million on apron ends, pushing the Knicks over their hard cap. So that won’t be possible unless the team makes another salary-loss trade that would cost them a rotation player. There is no indication that this is the plan.

The Knicks could start the season with just 13 players on standard contracts, but they would only be allowed to do so for two weeks before having to add a 14th man.

So, what are their options for this 14th place? Again, assuming they don’t make another cost-cutting trade, the only real possibility for the Knicks would be to sign or convert a former second-round pick to a standard contract. Since the tax gap rule only applies to free agentsa Knicks second-round pick signing a minimum salary deal would count for $1,157,153 toward cap, taxes, And for apron purposes.

New York has draft rights to a ton of non-NBA players, but the most viable NBA options on this list include Mathias Lesort And Rokas Jokubaitisare already under contract with teams in other professional leagues.

That means the most likely path for the Knicks, as ESPN’s Bobby Marks tweets, is to convert one of their current two-way players to a standard contract. Kevin McCullar And Ariel Hukporti both signed their two-way deals after being drafted by New York, so either player would be a candidate for a promotion. Jacob Toppin wouldn’t be, since he signed his two-way contract as a free agent, meaning the tax gap rule would apply to him.

Let’s say the Knicks finalize the Towns trade as we noted above, retain Morris, Shamet, or Okeke to start the season, then promote McCullar or Hukporti to a standard contract 14 days into the season. In this scenario, the team’s salary would be about $188.5 million for 14 players, giving them about $428,000 of wiggle room below their hard cap for the remainder of the season.

The Knicks’ ability to make moves during the season, including adding a 15th man, would be severely limited in this scenario. But their listing would be legal, which is the main concern at this point.

New York could generate a little more wiggle room below the apron’s second hard cap by including Kolek or Dadiet in their package for Towns, then promoting both McCullar and Hukporti to the standard list on minimum bids.

As was the case with the Bridges trade earlier this summer, early reports have let us know the most important elements of this deal, but there are still some intriguing details that need to be ironed out to make it work.