5 changes to the NBA’s CBA the Orlando Magic need to watch

5 changes to the NBA’s CBA the Orlando Magic need to watch

Salary Cap and the second apron restrictions

In previous years when a team has crossed the NBA salary cap by a certain amount, they would have to pay the luxury tax — a dollar-for-dollar tax every amount over that certain amount that could become more if a team is repeatedly over that luxury tax line.

After the luxury tax amount, there was an apron a team could hit that would restrict how that team can operate moving forward under its current financial obligations.

Under the new CBA effective this year, there is now a second apron that restricts the teams who hit it even further. In the 2024 season, the benchmarks are as follows:

• Salary Cap = $136 million
• Luxury Tax = $165 million
• First Apron = $172 million
• Second Apron – $182.5 million

Teams under the second apron will not be able to include cash in trades as an asset, their first-round picks will be placed at the end of the draft order if they are above the second-apron in three of the previous five seasons, they cannot use a trade exception from the previous year, they cannot trade first-round picks seven years out and beyond and they cannot create a trade exception by aggregating multiple players’ salaries.

To the average NBA fan, this is probably a lot to digest. So for some real-world context, Keith Smith of Spotrac explains it well:

Trades will be different because of teams being above the second apron now.

Additionally, signings last summer such as the Jon Wall or Joe Ingles signings with teh LA Clippers or Milwaukee Bucks would not have been possible under the new rules. These examples show how handcuffed second-apron teams will be compared to previous years.

While at the moment the Orlando Magic are far away from being a second-apron team, it is still very important for their front office to familiarize themself with the new landscape.

According to Spotrac.com, with Orlando’s roster as currently situated, they are at a cap number of $139.4 million (About $3 million over the new cap). They do have about $7 million cap room available for a mid-leve exception contract but it remains to be seen whether or not the Magic will use it (not likely considering the roster is full).

Orlando’s roster momentarily is pretty flexible and relatively cheap and you can expect it to remain that way over the next couple of seasons. But if the Magic are ever going to be buyers or big movers for multiple stars, they need to make sure that money is spent wisely because the second apron will not be an easy place for front offices to maneuver if they do indeed land there.

Only time will tell how these new rules will ultimately shape the league through the 2030 season and beyond.

In some ways, it seems the players benefited from a base pay and benefits point of view. But in other ways, it feels they sacrificed a good amount of power they have taken from the teams and league over the past several years.

How do the players feel about the new rules now? How will they feel after a few seasons playing under them? Will it be as easy for a disgruntled superstar to force his way out of a bad situation?

What about load management? Is that a thing of the past or will superstars sacrifice the accolades and money in order to keep that trend alive?

Are teams in the second apron effectively handcuffed to their roster for the year?

These are some of the questions that should have been asked before the NBAPA and the owners agreed to the deal. But whether they did or not, both sides signed, and the new CBA is officially live.

Now everyone is just anticipating the new TV rights deal in a few years that could double or triple the money coming to the NBA — do not worry, one more change to the CBA: the salary cap cannot spike by more than 10 percent in any year.

Just like every other team in the league, Orlando’s front office has the responsibility of learning and deciphering how to best use and navigate these new rules. Factors like a new CBA and contractual changes to a multi-billion dollar league are one of the things that make professional sports truly unique and fascinating.

Building a future championship contender under these rules will be difficult, but it will not be Magic — it’s just business.