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What is the NBA collective bargaining agreement? The second apron explained

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We are now into the NBA’s free agency period and things are quiet on the ground. Word around the campfire is that teams are nervous about the second apron and are keeping their hands in their pockets. Let’s take a look at the full CBA picture and how that could affect the restructuring of the league next season.

The NBA’s new collective bargaining agreement has introduced a second apron that has been designed to make penalties more punitive for teams that spend above the luxury tax.

NBA salary cap, luxury tax, first apron and second apron in 2024-25

Salary cap: $140.5 million

Luxury tax: $170.8 million

First apron: $178.1 million

Second apron: $188.9 million

The salary cap is the amount of money that each team has available to spend on their roster. When a team spends below the cap, they create space so they can then spend on free agents.

Teams are trying to avoid the second apron, which is $17.5 million above the luxury tax (currently set at $165 million for next season).

Previously, teams would only have additional fiscal responsibilities owed if they crossed into the luxury tax threshold. However, soon teams will also have on-court consequences for spending more than other teams.

Teams can go over the salary cap but try to stay under the luxury tax line, as that is when the penalties kick in.

Penalties for teams

Financial fines can be handed out. These are given to the non-taxpaying teams at the end of the year. The further teams go into the tax, the get closer to the apron where roster-building penalties are added in.

Penalties for the first apron

The first apron kicks in when a team’s payroll is over $178.1 million, and the following restrictions are triggered:

  • Teams cannot acquire a player in a sign-and-trade if that player keeps them above the apron
  • Salary matching in trades must be within 110 percent, rather than 125 percent for teams not above the apron
  • Teams cannot sign a player waived during the regular season whose salary was over the $12.2 million midlevel exception

Penalties for the second apron

The penalties for the first apron apply to the second apron, which is triggered when a team’s salary is over $188.9 million. In 2024-25 one additional penalty is added when crossing the second apron: teams will have access to the $5 million taxpayer midlevel exception

At the end of the 2023-24 season, more restrictions were added to the second apron.

The new restrictions are as follows:

  • Teams cannot include cash in a trade
  • First-round picks seven years out are frozen (unable to be traded)
  • Teams cannot use a trade exception generated by aggregating the salaries of multiple players
  • Teams cannot use a trade exception generated in a prior year
  • A team’s first-round pick is moved to the end of the first round if they remain in the second apron for three out of five seasons
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