With the completion of significant transactions during the 2024 NBA offseason, the landscape for the summer of 2025 and beyond has become increasingly clear.
Last month, the NBA unveiled new 11-year television agreements with ESPN, NBC, and Amazon Prime Video. These deals, totaling $77 billion, will commence with the 2025-26 season and ensure a full 10 percent increase in the salary cap as permitted by the collective bargaining agreement. This translates to a projected salary cap of $154.6 million and a luxury tax threshold of $187.9 million.
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Currently, only four teams appear capable of having substantial cap space next summer, with just two of them (the Brooklyn Nets and Washington Wizards) projected to possess enough to extend a 30 percent max contract without needing to remove additional salary. This scenario could influence how 2025 free agents approach their extensions. Although circumstances may change, the pool of potential suitors for players desiring more than a $15 million starting salary seems limited and unappealing.
While extensions, trades, and other signings will undoubtedly alter dynamics over the next year, this is an opportune moment to analyze what the upcoming offseason might entail, team by team.
Atlantic Division
Boston Celtics
The Celtics find themselves over the second apron without any commitments to Al Horford or for roster completion, so it would necessitate a considerable change to impact their overall circumstances. A vital consideration is when ownership—whoever that may be—will feel the pressure from the CBA’s second apron limitations, prompting them to dip below it. However, given their current and future quality, the reigning champions are likely to sustain this burden longer than others. Nevertheless, this issue is bound to emerge eventually.
Brooklyn Nets
The trade involving Mikal Bridges has evidently ushered the Nets into a new phase. This likely includes utilizing cap space during the summer of 2025, with current projections estimating between $44 million and $65 million available. They could further enhance this by trading players like Cam Johnson and Dorian Finney-Smith after reclaiming their 2025 and 2026 first-round draft picks from the Houston Rockets this summer. Nevertheless, GM Sean Marks may choose to reduce the projected cap space by acquiring multi-year salaries in trades that involve veterans, should that lead to a more substantial asset return. In any case, expect the Nets to be among the few teams with significant cap space in 2025.
New York Knicks
The team-friendly extension of Jalen Brunson greatly simplifies matters for the 2025-26 season. The Knicks are currently about $5 million below the expected tax threshold if
Julius Randle has opted into his player option. For now, it appears the team will manage to stay below the second apron, but this could change in the 2026-27 season when Bridges is expected to receive a salary increase through an extension or a new contract.
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Philadelphia 76ers
Having executed the unique strategy of utilizing maximum cap space while also incurring luxury tax for the 2024-25 season due to Tyrese Maxey’s minimal cap hold, the Sixers are poised to remain in the tax for the foreseeable future unless they make some marginal cutbacks. A key question for next summer is whether they will have enough flexibility under the second apron to access the anticipated $5.7 million taxpayer midlevel exception (MLE) or if they will be limited to Bird rights and minimum contracts.
Toronto Raptors
The Raptors are currently $29 million below the tax threshold, which may or may not suffice to secure Bruce Brown and utilize the $14.1 million nontaxpayer MLE. Depending on the season’s performance, their options could include both retaining him and re-signing restricted free agent Davion Mitchell.
Central Division
Chicago Bulls
Despite losing DeMar DeRozan and Alex Caruso, the Bulls will remain an over-the-cap team, especially with the retention of Josh Giddey, unless they manage to trade Zach LaVine or Nikola Vučević without assuming long-term financial commitments. They should still be able to access the full $14.1 million nontaxpayer MLE while avoiding luxury tax implications, allowing them some financial flexibility.
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Cleveland Cavaliers
Assuming Evan Mobley receives the 25 percent max salary instead of qualifying for the 30 percent variation (which would cost Cleveland an additional $7.7 million in 2025-26), the Cavaliers will end up approximately $8 million below the tax, excluding costs for Isaac Okoro or completing the roster. Consequently, utilizing the nontaxpayer MLE will prove challenging without making further trades. If Dan Gilbert is prepared to invest a reasonable amount into luxury tax, they might retain Okoro and access the $5.7 million taxpayer MLE.
Detroit Pistons
After offering Cade Cunningham an extension and committing to Tobias Harris for two seasons, the Pistons are looking at around $20 million in cap space, plus the projected $8.8 million room exception, which factors in the waiving of Paul Reed to clear his $8.1 million non-guaranteed salary. Depending on the outcome of their draft pick, the Pistons could maintain their over-the-cap status, potentially prompting them to trade Tim Hardaway Jr. in exchange for a longer contract, should another team wish to unload multi-season salaries during the trade deadline.
Indiana Pacers
By extending Andrew Nembhard and changing his minimum salary to an $18.1 million contract, the Pacers have significantly reduced their available spending. They will find themselves about $29 million under the tax, without factoring in any commitments for their draft pick or pending free agents Myles Turner and Isaiah Jackson. Is this sufficient for retaining Turner? Will ownership finally be willing to incur the luxury tax? The 2025-
The questions surrounding the 26 season are likely to be addressed, but significant decisions loom for the franchise, even with Tyrese Haliburton and Pascal Siakam having long-term contracts in place.
Milwaukee Bucks
Should Khris Middleton exercise his player option, the Bucks would find themselves approximately $7 million under the anticipated tax threshold, with no financial room to retain Brook Lopez. To keep Lopez while remaining beneath the second apron, it might require getting Middleton to opt out and accept a reduced salary in a multi-year deal. Given the increasing penalties for exceeding the second apron, this scenario seems probable at the moment.
Southeast Division
Atlanta Hawks
Following the trade of Dejounte Murray to the New Orleans Pelicans, the Hawks appear set to avoid the luxury tax for this season and the 2025-26 season, even without eliminating any additional long-term salary. The central issue now is whether $59 million will suffice to keep Jalen Johnson through either an extension or restricted free agency while also utilizing the full projected $14.1 million non-taxpayer MLE.
Charlotte Hornets
Few franchises find themselves in a position to choose between maintaining cap space or going over, and the Hornets are among them due to a team option on Vasilije Micić, Tre Mann’s restricted free agency, and the non-guaranteed contracts of Cody Martin and Nick Richards. The deciding factor may hinge on their 2025 draft pick, but currently, they are faced with a choice between approximately $21 million in cap space plus the $8.8 million room exception or opting to remain over, which would enable them to retain players utilizing Bird rights alongside the $14.1 million non-taxpayer MLE and the $5.1 million biannual exception for new signings.
Miami Heat
Their future is entirely contingent on Jimmy Butler. He has the potential to become a free agent next offseason, and should he return, the Heat are likely to be a tax team, even with the possible waiver of Duncan Robinson, who holds an early termination option that is partially guaranteed. If Butler decides to leave, the Heat might open up a modest amount of cap space (approximately $22 million), but in that case, they could seek to shed more salary to radically overhaul their roster.
Orlando Magic
Having already secured his extension, Franz Wagner leaves the Magic right up against the luxury tax line, particularly with Jalen Suggs carrying a $27.6 million cap hold. Thus, any additional cost for Suggs…
Adjustments may be necessary for financial flexibility. The team holds options for both Moritz Wagner and Gary Harris, which might provide the space needed if ownership chooses not to pay the tax for one of the NBA’s most thrilling young teams.
Washington Wizards
The tenure of Michael Winger, president of Monumental Basketball, has been eventful, leading the Wizards to clearly embrace a rebuilding phase. Despite having Kyle Kuzma and Jordan Poole on the roster, the team anticipates around $44 million in cap space next summer. While this offseason may not be ideal for a major move, the Wizards possess financial flexibility until approximately 2029, when their current rookies will start new contracts, giving them multiple opportunities to add talent.
Southwest Division
Dallas Mavericks
The Western Conference champions find themselves just $17 million under the anticipated tax line, not accounting for pending restricted free agents Jaden Hardy and Quentin Grimes. This figure also includes Kyrie Irving opting into his player option instead of declining it for a longer-term raise. My intuition suggests that the Mavericks will surpass the tax threshold in 2025-26, albeit with a manageable bill.
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Houston Rockets
The Rockets currently stand out as a fascinating franchise heading into the 2025 offseason. General Manager Rafael Stone must decide whether to maintain the current roster or create up to $69 million in cap space, which would likely entail parting ways with Fred VanVleet and Jalen Green, while hoping Alperen Şengün exercises patience akin to Maxey. (Pursuing the cap-space route also relies on utilizing Şengün’s low cap hold, meaning he wouldn’t be able to sign an extension this offseason.) While significant moves seem improbable at this juncture, it’s a situation to monitor closely as the rookie-scale-extension deadline approaches, given that Green is eligible for an extension.
Memphis Grizzlies
Currently, the Grizzlies are over the cap but $31 million below the luxury tax, which should be sufficient to utilize the $14.1 million nontaxpayer mid-level exception (MLE) and possibly retain one or both of Santi Aldama and Luke Kennard.
New Orleans Pelicans
The Pelicans find themselves $63 million under the anticipated tax. Although this appears substantial, it does not account for Brandon Ingram or restricted free agent Trey Murphy III, so the financial landscape could become complex in New Orleans. This holds true whether or not Ingram is traded, as the front office likely seeks assets that contribute beyond this season.
San Antonio Spurs
Surprisingly, the Spurs for the 2025-26 season have less than a maximum salary slot. They project around $28 million in cap space before factoring in potential draft picks, likely leaving them with approximately $15 million to $20 million (plus the $8.8 million room exception), as their own draft pick combined with the Hawks’ unprotected selection could come with a significant price tag. While they could create additional spending capacity in 2025, I am intrigued to see how their front office strategizes for 2026 because they could have substantial space available before Victor Wembanyama’s expected extension begins in 2027.
How might the Spurs continue building around Victor Wembanyama next summer? (Trevor Ruszkowski / USA Today)
Northwest Division
Denver Nuggets
Having allowed Kentavious Caldwell-Pope to depart this summer, the Nuggets are positioned to remain beneath the second apron again in the 2025-26 season, even if Jamal Murray receives the 30 percent max through either an extension or a new contract, and Aaron Gordon opts out for a pay increase. Should Gordon secure a deal exceeding expectations, the second apron could become a concern, compelling ownership to choose between paying it or shedding other contracts.
Minnesota Timberwolves
The Timberwolves are sitting right at the second apron, depending on whether Rudy Gobert and Naz Reid exercise their player options. While it’s likely Reid, the reigning Sixth Man of the Year, will opt out in search of a larger contract either in Minnesota or elsewhere, it would not be surprising if Gobert also opts out to pursue a longer deal at a lighter annual salary. By the summer of 2025, the ownership situation for the Wolves should be clarified, giving insight into how much ownership is willing to invest in both the short and long term.
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Oklahoma City Thunder
Despite the recent spending spree, the Thunder find themselves slightly over the cap for the following season, with no players ready for a new contract after swiftly finalizing deals with Isaiah Joe and Aaron Wiggins. General Manager Sam Presti has substantial flexibility to utilize the $14.1 million nontaxpayer mid-level exception but may prefer to allocate these funds toward a one-year deal, considering that both Chet Holmgren and Jalen Williams will be due significant raises in 2026-27.
Portland Trail Blazers
The acquisition of substantial long-term salary through the trades of Damian Lillard and Jrue Holiday indicates that the Blazers are unlikely to manage cap space before 2026, even if they trade away veterans such as Jerami Grant. They are expected to avoid the luxury tax, which might limit their ability to use the nontaxpayer mid-level exception depending on the roster composition next summer. Currently, the Blazers stand $15.8 million below the expected tax threshold, not accounting for what will likely be a valuable lottery pick, which will diminish that flexibility.
Utah Jazz
The renegotiation and extension of Lauri Markkanen have clarified the Jazz’s trajectory, and they are likely to operate as an over-the-cap team next summer, assuming John Collins opts into his player option. However, if Collins chooses to opt out and depart, Utah could potentially create approximately $30 million in cap space. CEO Danny Ainge may opt to withhold action until 2026, when the Jazz could have the capacity for a maximum contract and clearer insights regarding their young core.
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Pacific Division
Golden State Warriors
This offseason has been eventful for the Warriors, resulting in their position outside the second apron for the first time in years. This scenario is likely to persist through the 2025-26 season. Currently, they sit approximately $49 million beneath the projected tax, not accounting for restricted free agents Jonathan Kuminga and Moses Moody. Is this sufficient to retain both players and utilize the $14.1 million nontaxpayer MLE or keep 2024 signing De’Anthony Melton? Unlikely.
LA Clippers
While there’s a theoretical possibility for the Clippers to create a minor amount of cap space (which could increase if James Harden decides to opt out), it’s more plausible they remain over the cap by maintaining Ivica Zubac and/or Terance Mann through extensions or new contracts next summer. However, as long as their combined expenditures match expectations, team president Lawrence Frank might be able to use the $14.1 million nontaxpayer MLE to acquire another rotation player or a starter/closer for the first time in quite a while.
Los Angeles Lakers
With Anthony Davis’ extension going into effect for the 2025-26 season, the Lakers find themselves only $7 million shy of the projected tax line. This situation holds true even if LeBron James opts in instead of pursuing higher pay for the 2025-26 season, and there are no arrangements yet for D’Angelo Russell or the rest of the roster. Consequently, it is anticipated that the Lakers will be a tax team. Russell’s status will significantly influence whether they edge towards the second apron or can make use of the $5.7 million taxpayer MLE.
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Phoenix Suns
The Suns find themselves in a challenging position, with only Bird rights and minimum deals to offer, as they are an eye-watering $18 million over the second apron without even completing their roster.
Sacramento Kings
Despite acquiring DeRozan this summer, the Kings maintain a strong financial situation. They remain well below the tax, allowing them to utilize the full $14.1 million nontaxpayer MLE to complete their roster. However, the financial outlook will become more complicated for the 2026-27 season when new contracts for both De’Aaron Fox and Keegan Murray will come into play.
(Illustration: Dan Goldfarb / The Athletic; photos: David Berding, David Dow / Getty Images)
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Looking Ahead: How the 2024 NBA Offseason Sets the Stage for Financial Strategy in 2025 and Beyond
Understanding the 2024 NBA Offseason
The 2024 NBA offseason promises to be a pivotal moment for teams across the league, influencing not only their on-court performance but also their financial strategies for 2025 and beyond. As franchises navigate player contracts, trades, and the evolving dynamics of the salary cap, understanding the implications of this offseason is crucial for fans, analysts, and investors alike.
Key Factors Influencing Financial Decisions
Several key factors will shape the financial landscape of the NBA in 2024 and beyond:
- Salary Cap Dynamics: The projected salary cap for the 2024-2025 season is expected to increase, providing teams with more financial flexibility.
- Player Contracts: High-profile free agents will be available, which will impact how teams allocate their resources.
- Market Trends: The NBA’s growing international reach and digital revenue streams continue to create new financial opportunities.
The Role of Free Agency
Top Free Agents of 2024
The 2024 free agency class includes several star players whose decisions could dramatically alter the financial trajectory of their teams. Here are some notable free agents to watch:
| Player | Current Team | Position | 2023 Salary (in millions) |
|---|---|---|---|
| LeBron James | Los Angeles Lakers | SF | $44.5 |
| Kyrie Irving | Dallas Mavericks | PG | $40.0 |
| Joel Embiid | Philadelphia 76ers | C | $48.0 |
Implications of Free Agency Choices
When these top players enter free agency, their decisions will not only impact their own financial futures but also the financial strategies of the teams involved. For example:
- A team acquiring a superstar may need to make sacrifices elsewhere, affecting their depth and long-term financial health.
- Conversely, retaining a key player can bolster a team’s competitive edge, potentially leading to increased revenue from ticket sales and merchandise.
Trade Considerations
Strategic Trades
In addition to free agency, trades will play a crucial role in shaping financial strategies. Teams must evaluate:
- Contract Length: Long-term contracts can be burdensome, impacting cap space and flexibility.
- Player Performance: Assessing a player’s market value versus their on-court contribution is essential for making smart trades.
Case Study: The Brooklyn Nets
The Brooklyn Nets serve as a prime example of how trades can influence financial strategy. After acquiring several high-profile players, they faced challenges with their salary structure, which ultimately led to significant roster changes. Their moves highlight the importance of balancing star power with financial sustainability.
Benefits of a Proactive Financial Strategy
Teams that take a proactive approach to their financial strategy during the 2024 offseason may reap several benefits:
- Long-Term Success: Building a well-rounded team while managing financial risk can lead to sustained success.
- Increased Fan Engagement: Competitive teams tend to draw larger crowds, enhancing overall revenue.
- Flexibility for Future Seasons: Maintaining cap space allows for strategic additions in subsequent offseasons.
Practical Tips for Teams
To successfully navigate the 2024 NBA offseason, teams should consider the following practical tips:
- Conduct Thorough Market Research: Understanding the market value of potential signings or trades is crucial.
- Evaluate Team Needs: Prioritize filling gaps in the roster while maintaining flexibility.
- Monitor Financial Trends: Staying informed on salary cap changes and league-wide financial shifts can guide decision-making.
Looking Beyond 2024: The Bigger Picture
As teams look ahead to the 2025 season and beyond, several larger trends will influence their financial strategies:
- Global Expansion: The NBA’s international growth provides new revenue opportunities, impacting financial strategies.
- Diversity in Revenue Streams: Teams need to explore varied income sources beyond ticket sales, including sponsorships and merchandise sales.
- Player Empowerment: Understanding the evolving landscape of player agency and its effects on team dynamics is essential.
Conclusion
The decisions made during the 2024 NBA offseason will resonate far beyond the immediate effects on team rosters. By understanding the complex interplay of player contracts, strategic trades, and financial planning, franchises can position themselves for success in 2025 and beyond. Engaging in proactive financial strategies will not only enhance competitive viability but also pave the way for sustained growth in an ever-evolving league.
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