June 06, 2023
Seemingly every other day, a new news drop comes out about the NBA's newest collective bargaining agreement that sounds punishing for teams pushing into the luxury tax zone. Unsurprisingly, that has created a lot of speculation about what could end up being a crazy summer, as teams try to get out ahead of a new set of rules for transactions.
The Sixers may end up being one of the more fascinating teams to watch as the offseason unfolds. There are a few major variables for Philadelphia's summer:
It's the third bullet point we're going to focus on today. Harris' deal has been problematic for the Sixers since the moment the pen was put to paper, tying a huge chunk of their salary cap to a role player who has been an awkward fit around different cores and unable to produce when the lights are brightest. He is set to make $39 million and change this season, putting him in the league's top-20 in salary for 2023-24 before free agency opens this summer. However, there is a world where Harris' contract ends up being a major asset this summer if they're willing to take a somewhat sizable risk over the long term.
In the upcoming CBA, the league has created a second apron above the luxury tax threshold that could be described as a hard cap in everything but name. Let's go through a few projected thresholds real quick:
Salary cap: Expected to be set around $134 million
Luxury tax: Projected at $162 million
First apron: $7 million above tax line (projected $169 million)
Second apron: $17.5 million above tax line (projected $179.5 million)
A team that crosses that second apron line will be subjected to a series of penalties and restrictions. They will lose access to the taxpayer mid-level exception, for example, one of the few methods tax teams have to sign impactful veteran players. Second-apron teams will be unable to use cash in trades, which has the potential to impact draft-day trades for second-round picks (which have been a source of important role players in recent seasons). A team that crosses either apron line will be unable to sign bought-out players if that player was making more money than the non-tax MLE prior to being waived, restricting expensive contenders from making late-season additions.
Over the long-term, it gets even more punitive, as teams above the second apron will no longer be able to aggregate salaries in trades starting in 2024, eliminating a team's ability to flip multiple role players for a bigger name/bigger contract. Teams over the second apron at season's end will be unable to trade first-round pick seven years into the future, and if a team is a repeat offender in two of the following four seasons, that pick will be automatically moved to the back of the first round regardless of how the team fared that season.
And then there's this new wrinkle:
That's on the first apron. And we have some future changes after the last day of the 2023-24 regular season, but dont' want to muddy the waters at this time
— Eric Pincus (@EricPincus) June 5, 2023
All of these things sound bad for a team like the Sixers, expected to be expensive in the short term if they're going to push to win a title in the immediate future. So is there any upside?
Where they could strike is by using that $39 million Harris contract in exchange for players making long-term money on apron teams. If that sounds like an overly specific scenario, it is. The Clippers and Warriors are the only two teams that are near-locks to be in that second apron zone, with the Mavericks, Suns, Lakers, Bucks, and Celtics all threatening to push there in the right scenarios. There won't be a huge group of teams to pull from, and then you have to consider whether they'd be interested in trading for Harris the player.
But as a thought exercise, let's look at a team like the Warriors. Jordan Poole and Andrew Wiggins are on track to make a combined $51 million next season, which will rise to $59 million combined in 2025-26. For a Golden State team figuring out what to pay and what to do with Draymond Green moving forward, that's a tremendous problem. And if the Warriors wait until the summer of 2024 to try to solve it, their options to make a sizable move dwindle because of the elimination of trade aggregation for second-apron teams.
In this way, a big expiring contract like Harris' becomes an interesting chip to dangle in front of Golden State. Maybe he doesn't fit their team as well as Wiggins, for example, but swapping pieces before the more damaging apron penalties set in would allow the Warriors to create some breathing room and perhaps re-tool for a final run at titles with the Steph Curry/Klay Thompson/Green core. These sorts of swaps would require other ancillary pieces, and both teams would be taking on some form of risk — the Sixers would be the team with longterm apron concerns post-trade, and the Warriors would be moving players who fit into a title team for a guy who has proven tough to make work on a team with contention goals.
The Clippers are a trickier example here, as most of their role players are in the $10-20 million range with little in the way of long-term money (Norm Powell is an exception, though he's not breaking the bank at an AAV of about $19 million over the next three seasons). Making any sort of deal with L.A. would be dependent on the Clippers wanting a quicker escape plan if things go haywire and the Paul George/Kawhi Leonard combo walks next offseason. That doesn't strike one as a Steve Ballmer move, as he has a new arena being built and butts to put in the seats.
However, this summer feels like the start of a reckoning. Stars are going to continue to be paid like stars moving forward, but teams are going to have to more closely examine how much and for how long they're willing to pay their role players. The big question for expensive teams to answer is no longer "Is our owner willing to pay a big luxury tax bill?" but rather "Can we build the best version of our team with additional restrictions in trades and free agency?" And that will rattle in the brains of executives around the league this summer.
The short version — this could end up being a one-shot scenario to hunt for longterm upside if you're the Sixers, in possession of a big contract like Harris'.
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