How do second-apron penalties limit Celtics? Here's one tangible example
Back in March, when current Boston Celtics lead owner Wyc Grousbeck was asked about the dreaded 'second apron' in the NBA's new collective bargaining agreement, he noted that its biggest impact related to roster building, not money.
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'It's not the luxury tax bill, it's the basketball penalties,' Grousbeck told WEEI at the time. '… The basketball penalties mean that it's even more of a premium now to have your basketball general manager be brilliant and lucky.
' … I predict, for the next 40 years of the CBA, no one is going to stay in the second apron more than two years.'
So, what exactly are these penalties that led Grousbeck to make such a bold prediction? Here's a list of the restrictions on teams that exceed the second apron of the luxury tax:
Teams cannot sign a waived player who had a salary of at least $14.1 million
Teams cannot use a trade exception generated by aggregating the salaries of multiple players
Teams cannot include cash in a trade
Teams cannot use a trade exception generated in a prior year
First-round picks seven years out are frozen (unable to be traded)
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
If your eyes glazed over there, we don't blame you. That's a lot to digest. But the latest Celtics-related report provides a tangible example of how the second apron limits teams like Boston, which is currently $20 million over that threshold entering the offseason.
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Longtime NBA journalist Marc Stein reported earlier this week that Boston may explore trading Jrue Holiday this offseason in its quest to trim salary and get under the second apron. On Wednesday, Stein's colleague Jake Fischer noted that 'multiple rival executives' believe the Celtics would need to include 'some form of incentive (such as draft compensation)' in such a deal to convince a team to take on the $104 million remaining on Holiday's contract.
For starters, second-apron restrictions prevent the Celtics from including cash in a hypothetical Holiday trade, which means they'd need to go the draft pick route. But the second apron also prevents Boston from trading its 2032 first-round pick, which would create a ripple effect that would leave Brad Stevens and Co. with very limited draft resources to trade, as CLNS Media's Bobby Manning lays out here:
Even if the Celtics can complete a trade of Holiday using one of the picks above, their lack of future selections complicates their ability to make other deals that may require draft picks as sweeteners, such as potentially moving big man Kristaps Porzingis and his expiring contract.
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The draft pick restriction of the second apron is a big reason why the Los Angeles Clippers and Denver Nuggets were forced to let Paul George and Kentavious Caldwell-Pope, respectively, walk in free agency for no return, and it's possible the Celtics could meet the same fate with Porzingis if they can't find a trade partner with their current assets.
The Holiday example underscores the importance of Boston at the very least shedding $20 million in salary this summer to ensure the team isn't subject to the same second-apron penalties next offseason. That may require some hard decisions, but with Jayson Tatum already expected to miss most or all of the 2025-26 season as he recovers from Achilles surgery, the short-term pain may be worth the long-term gain.
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