What's Going On in Cleveland?

New speculation has raised some old antennas. Plus, one final salary cap deep dive before free agency begins.

Good morning! Can you smell the madness around the corner?

🗣️ News & Notes ✍️

🏀 Well, well, well…here we go again.

Watch the clip, because when the hosts press Windy at the end, he implores them to check out social media from the last week and they’ll see what he’s talking about.

Could Windhorst possibly be referring to the constant shots of Donovan Mitchell in and around the New York area, including Monday night at a Mets game with several familiar faces?

Maybe, maybe not, but not since Marilyn Monroe sang “Happy Birthday” to Jack Kennedy has someone so openly flaunted their love for an object of desire (in this case, the city of New York).

The speculation is a tad too, well…speculative for me to spitball fake trades at the present juncture, but perhaps we should all brace ourselves for what might be coming.

🏀 Donte DiVincenzo cleared the last impediment towards his unrestricted free agency yesterday, opting out of his $4.7 million player option with Golden State as has long been expected. As Bobby Marks noted, the Warriors, cannot offer DiVincenzo more than $5.4 million next season because they only have non-Bird rights.

And wouldn’t you know it, Jake Fischer had a report earlier in the day in which he noted that “there’s been growing noise among league personnel about DiVincenzo joining former Villanova teammates Jalen Brunson and Josh Hart in New York.”

My one word of caution for anyone rooting for the Knicks to sign DiVincenzo but also not to shake up the rotation elsewhere: you may not be able to have your cake and eat it, too. There are 192 minutes to be distributed at the non-center positions in an NBA game. Assuming the most conservative minutes averages for Jalen Brunson, Julius Randle, RJ Barrett, Quentin Grimes, Josh Hart and Immanuel Quickley, there’s only 12-14 rotation minutes left…and I haven’t even factored in the backup power forward spot, whether that’s Obi Toppin or someone else.

I don’t know what’s going to happen with DiVincenzo, but I can promise that neither he nor the Knicks have any interest in him coming here to play a dozen minutes a game, and the same goes for anyone else who they might sign for the full non-taxpayer midlevel.

🏀 Fischer also reported that Atlanta’s De’Andre Hunter could be on the move, possibly into the cap space of Detroit or Indiana. What the Hawks fetch in return will give us another key piece of evidence about the changing valuations for mid-tier players in the current NBA landscape.

Speaking of middling valuations, Marc Stein reported that the Suns and Mavs nearly completed a deal sending Deandre Ayton to Dallas for Richaun Holmes, Tim Hardaway Jr and JaVale McGee, but Phoenix backed off because they didn’t want McGee’s bad contract. Other than that though, they seemed ready to jettison Ayton for a return that included no draft pick compensation. Not a great sign for the former No. 1 overall pick.

🏀 One last little note at the end of that Fischer column: the Wizard are expected to buy out Danilo Gallinari so he can join a contender. Might the Knicks be a possible destination? Gallo seems perfectly suited for a dozen minutes a night off the bench as a floor-spacing four, and would only cost the vet minimum.

Alternatively, as Jeremy pointed out on Twitter, buying out Gallo might make the Wizards a possible destination for Obi Toppin.

💰 Breaking the Bank 💰

Today’s question comes from Kennth Koch, who asks specifically about the financial ramifications of acquiring Paul George, but I’m going to use as a jumping off point for a more general deep dive into the finances that await New York:

The request is a deep dive on the impact of a George acquisition on the second apron, depending on various combinations of players traded for him.  I think you have suggested that the second apron only becomes a big issue in the 2025-2026 season after Randle/Brunson opt out and get their max. Reports seem to indicate that George's desire to get an extension was the big sticking point, which I assume is somewhat of a health issue and somewhat of second apron issue.  So I am trying to get a handle on whether there are creative ways to handle it and exactly how much room, if any, we might have left under the second apron (or alternatively, how much over it we would be). 

Thanks for the question Kenneth. Before I answer, I’ll first refer back to my initial CBA deep dive from about a month ago for anyone who needs a more general primer. Now, as for Kenneth’s question…

For all the handwringing over the new, harsher penalties imposed by the new CBA, the good news is that the NBA seems to be in a very healthy place financially. A good reminder of this was seen just recently, when the final salary cap number for the 2023-24 season came in $2 million ahead of projections, at $136 million. This made the luxury tax $165 million, the first apron $172 million and the second apron $182.5 million.

(As a reminder, the first apron is a hard cap that is triggered when a team uses either the non-taxpayer mid-level exception or the bi-annual exception, or when a team acquires a player through a sign-and-trade. In other words, if the Knicks sign Donte DiVincenzo to the full mid-level, at no point this season can their total salaries exceed $172 million. This isn’t likely to be an issue this season because they’re going to do everything possible to avoid the tax anyway, but moving forward, this will definitely be something to watch.)

It’s not uncommon for the final cap total to come in higher than the projected amount, so moving forward, we should anticipate the following numbers to get a bit higher:

• 2024-25: $142.8M cap, $173.3M tax, $180.3M 1st apron, $190.8M 2nd apron

• 2025-26: $149.9M cap, $181.9M tax, $188.9M 1st apron, $199.4M 2nd apron

• 2026-27: $157.4M cap, $191M tax, $198M 1st apron, $208M 2nd apron

With the obvious caveat that we don’t yet know what moves the Knicks will make in the coming days, let alone the coming years, let’s see what we can figure out:

2024-25

$142.8M cap, $173.3M tax, $180.3M 1st apron, $190.8M 2nd apron

If things stay as they are, the Knicks will be shelling out $99.7 million to the five players whose contract figures we know for certain: Jalen Brunson, Julius Randle, RJ Barrett, Mitchell Robinson and Quentin Grimes. I think we should also pencil in $18.14 million for Josh Hart, which is the maximum amount he’d get on the first year of his next contract assuming he opts into his $12.96 million player option for next season. Lastly, Jericho Sims has a team option for just over $2 million that I’d assume they’ll pick up.

That brings us just shy of $120 million. After that, we’re met with several uncertainties. What will Immanuel Quickley’s next contract look like, assuming he’s still on the team? Will there be new contracts waiting for Isaiah Hartenstein, Deuce McBride, and while it seems highly unlikely at the moment, Obi Toppin?

Since the goal of this exercise is to forecast a worst case scenario, let’s assume new contracts starting at $22 million for Quickley, $12.9 million for Hartenstein (the most he can extend for prior to free agency) and $5 million for Deuce. I’m also plugging in $13 million for someone that we’ll have signed to the mid-level this summer, assuming a max raise of five percent. Lastly, I’ll assume that the Dallas pick conveys next season and that New York rosters both the player taken with that selection and their own pick. We don’t know where those picks will land, but figuring on the 18th and 19th picks, that adds another $6 million.

That brings the total salaries to $178.9 million, which we’ll bring up to an even $180 million with a league minimum salary hold because they need to get to 14 roster spots. This is right at the first apron, which won’t matter unless they trigger it. More importantly, it’s about $11 million away from the second apron.

Realistically, is there any way they could trigger the second apron with a trade that takes place over the next 12 months? Easily! To use Kenneth’s Paul George scenario, if they ship RJ Barrett (or Julius Randle, for that matter) and Evan Fournier to LA for George this summer and then re-sign PG13 on a new deal starting at his max, that’s a $50 million salary on the books for the 2024-25 season. That’s about $20 million more than Randle and $24 million more than Barrett.

If you’re keeping track, Randle for PG13 would put them $9 million over the second apron, while RJ for PG13 would put them $13 million over the second apron.

Are there ways to mitigate this? Absolutely. They could send out Deuce for a future draft asset. They could trade one or both of the first rounders due to them in the 2024 Draft. Alternatively, they could keep one of the picks, draft a quality center, let Hartenstein walk, and trust Sims with the backup center duties while that rookie gets his feet wet.

But by far the easiest way to skirt the second apron in this scenario would be to include Immanuel Quickley in any star trade, as adding his 2024-25 salary to either RJ or Randle would essentially make the trade a wash from a financial perspective. In addition, sending Quickley out also means retaining more draft capital, which could then be used to restock the coffers with cheap talent, as we’ve seen Denver do recently.

Any way slice it though, there’s more than enough optionality at New York’s disposal to be confident they won’t get above the second apron in either of the next two seasons. After that though…