TL;DR; the cost of the Timberwolves' top four of KAT, Gobert, Ant, and McDaniels alone will put the Timberwolves over the cap in 2024. To sign their draft 2024 FRP, extensions for players like Naz Reid and NAW, and simply filling out the rest of the roster with vet minimum contracts, they will trigger the CBA's new second luxury tax apron. This apron is so punitive and restrictive that it will make breaching that threshold cost-prohibitively expensive to do so, unless you are a team with a surefire championship contending roster, which the Timberwolves are not. As a result, a KAT or Gobert trade in the next year is almost impossible to avoid.
I know we are about to enter the finals, but this feels like an underrated headline coming out of the new CBA agreement, especially with the headlines the Timberwolves generated last summer in acquiring this current team.
In 2023, as of right now, the Timberwolves will be under the luxury tax level. They can run it back with the guys currently signed next season (Conley, Ant, McDaniels, KAT, Gobert, Anderson, Prince, Moore Jr., McLaughlin, and Minott) and could conceivably even have the money for Naz and NAW extensions.
In 2024, things get extremely ugly extremely quickly.
KAT and Gobert will be making 35% and 31% of the cap, respectively. Additionally, with Ant's upcoming extension, the combined cost of KAT, Gobert, and Ant could be as high as 96% if Ant were to make all-NBA next season, which I don't think is that difficult to imagine being within the realm of possibility.
In 2024, assuming a max contract for Ant and a $20-25 mil extension for Jaden McDaniels, the Timberwolves will be over the cap with JUST their top four of KAT, Gobert, Ant, and McDaniels. This doesn’t include possible extensions for NAW or Naz, the money for signing their 2024 first round pick, a Mike Conley starting PG replacement, and filling out the rest of their roster.
Assuming they went with exclusively with minimum contract guys to fill out the rest of the roster, they would have a luxury tax of $40 million and would be over the second tax apron of the new CBA agreement.
The tax aprons are a pretty confusing/vague without reading the fine print. As a primer, the first apron triggers when a team is $7 million above the luxury tax. Penalties for hitting this threshold include:
- 125% to 110% salary matching in a trade.
- Can’t sign buy-out players.
- Can’t take back more salary in a trade than you send out.
These restrictions are not ideal, but are not catastrophic. The second apron, which triggers at $17.5 million above the luxury tax, is much more punitive. Teams that meet that second tax apron threshold:
- Can’t aggregate players to acquire a player making more money.
- I.e. you can’t cobble together a couple of role players on 10-15 mil salaries for a max player.
- Can’t use cash in trades.
- Can’t use the mid-level exception.
- Can’t trade a pick more than 6 drafts away.
- If you go over the second apron again in a three-year span, that pick becomes the 30th pick in the draft.
- Increasing per-dollar tax for over-the-tax repeater teams.
- The mechanics from a financial standpoint of this are not worth getting into, but for context, the existing over-the-tax repeater punishment is what is costing Ballmer and the Clippers $140 mil in luxury tax penalties this season, and that is before the increased punitive scale of the new over-the-tax penalty scale.
So, just to keep this core intact, you are looking at a $40 million luxury tax and all of these additional punitive measures that makes trades and roster improvements on the margins incredibly restrictive, while making the financial cost of hitting these thresholds even greater.
For a team that-- while they showed some really small but extremely promising flashes and, I would argue, drastically increased their stock in the western conference next season as these playoffs played out—won 42 games and didn’t make it out of the first round of the playoffs, and also have brand new owners that are not flush with cash the way multi-billionaire owners are.
So what do the Timberwolves do? Something about the composition of those top 4 players has to change.
- No sane team would willingly part ways with Ant and/or Jaden.
- After an underwhelming and injury-plagued season, Gobert's value is low, and-- sunk costs notwithstanding-- trading him for pennies on the dollar a year after making one of the most expensive trades of all time to acquire him would just be a disaster from a PR/perception stand point.
- That leaves KAT as the only realistic option for trade.
- While injuries derailed his season and an underwhelming close to the season have hurt his value, he is a two-time all-NBA player just entering his prime.
- An elite playmaking big, one of the best high-volume 3-pt shooters in the league, and 3 level-scorer, he's a matchup nightmare.
- He's also improved his defense to the point that he is not a liability and can in fact sometimes be a positive on that end. A low bar, but a farcry from where he was in 2020-2021 and before.
- Despite his value being low relative to where it once was, there would absolutely be an appetite for KAT around the league, even if the return for the Timberwolves isn't as good as most trades involving all-NBA players on the right side of 30.
It has nothing to do with KAT as a player, but purely from a practical standpoint, it might make the most sense that he is the odd man out. It will be extremely interesting to see how things play out for the Timberwolves over the next year.
Shoutout to all of the great Timberwolves podcasters, beatwriters, and journalists that have been pumping out content in recent weeks about the latest CBA’s implications for the Timberwolves. No shot I would have fully grasped how precarious the franchise's position is without all of the work they do.