The NBA's salary cap for 2026 is an unmitigated disaster we'll quickly feel
I hate to divert any attention from all the 2025 NBA free agency fun, but I have some bad news, dearest readers.
Remember the NBA's still relatively new second-apron tax rules? You know, the ones that threaten to break apart your favorite teams and force contenders to make shrewd, difficult decisions? Yes, those very same rules! You got it!
Advertisement
Well, according to the league's projected salary cap increase for the 2026-2027 season (so, starting next summer), the second apron is likely about to wreak even more havoc on NBA squads who are already tight up against the cap. It's just an unfortunate reality.
As ESPN's Bobby Marks reported on Monday, the NBA's salary cap will only go up seven percent in 2026-2027. For posterity, players receiving extensions and new contracts are entitled to an eight percent raise on their contracts. All power to players for being in one of the only professions where wages actually rise with inflation, but that's obviously quite problematic for team building, especially for squads who already have a bunch of big-money player contracts on their books.
This is also an issue because the assumption around the league was that it would generally go up 10 percent every summer. This meant that many teams, like, say, the Minnesota Timberwolves, were already operating with that level of increase in mind and structuring contracts around the idea they would soon have more breathing room.
Instead, they will not, and the second apron is likened to create even more of a cap squeeze:
Suffice it to say, with a lower-than-expected salary cap a summer from now, we may now only be scratching the surface of problems the second apron may create for NBA teams.
Advertisement
Given the extremely stringent penalties inherent in possible trades and the (lack of) available offseason resources, the second apron is something that most franchises around the league do everything in their power to avoid. And if they're already in the second apron or in danger of broaching it, they may consider a shocking trade to break up their roster that otherwise wouldn't have come to mind to get some cap relief. That or they approach internal extensions for players differently — either by lowballing them or not offering an extension in the first place.
This is nothing to say of free agency, which figures to be more of a barren wasteland. There are many competent NBA veterans who are certainly worth than minimums. But with teams trying to avoid the second apron, these sorts of veterans may find it increasingly harder to find any higher offers than minimums. And if you think it won't affect this year's open market period, boy, do I have the worst news for you. The mere hint that there will be less flexibility down the road means NBA squads will likely be even more cautious about committing to anything that isn't firmly bolted down.
Following this disastrous news about the salary cap, either the NBA takes action to provide some relief for teams (such as a grandfather clause or a lessening of penalties), or this problem is almost certainly about to get worse.
This article originally appeared on For The Win: NBA's projected salary cap for 2026 will hurt free agency, make second apron worse
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
28 minutes ago
- Yahoo
Grade The Trade: Nuggets Swap Porter Jr. For Cam Johnson In Shocking Deal
Grade The Trade: Nuggets Swap Porter Jr. For Cam Johnson In Shocking Deal originally appeared on Fadeaway World. The Denver Nuggets have moved Michael Porter Jr., after months of being involved in trade rumors. Porter Jr. averaged 18.2 points per game this season, nailing 39.5% from three in the regular season, but those numbers dipped to 9.1 points per game on 34.3% from deep in the postseason. Advertisement The Nuggets must go all-in to surround Nikola Jokic with the right pieces to win an NBA championship, especially with a new head coach, David Adelma,n coming on board. The Nuggets have decided to move Porter Jr and a first-round pick for Cam Johnson, a move that essentially swaps shooters but also involves some risk. Let's grade the trade to see who won and lost this deal. Denver Nuggets: C+ The Denver Nuggets are taking a risk, losing 27-year-old Michael Porter Jr for 29-year-old Cam Johnson. This move signals Denver's willingness to pivot from potential to consistency, aiming for a floor-spacing 3-and-D wing with Johnson. Advertisement Financially, the swap also lightens the long-term luxury-tax hit: Porter is owed around $79 million over the next two seasons, whereas Johnson comes in at roughly $44.4 million total. The risk: Johnson lacks Porter's ceiling and interior mismatch potential, and Denver gave up a future first-rounder. This deal tilts toward structural stability, but it's not without a gamble. Denver fans will be watching to see if Johnson can replicate his efficiency in a championship chase. Brooklyn Nets: B+ Brooklyn acquires Michael Porter Jr. and a 2032 first-round pick, a move that aligns with their rebuild and asset collection strategy. Porter gives them a 6'10" forward who has shown heavy scoring upside, once part of Denver's 2023 title run, and still has two years left on his deal. Advertisement The added pick is valuable upside on a talented Nuggets team coming off major postseason disappointments. The Nets' coach and front office will hope that under a refreshed role in Brooklyn, Porter can return to 18-20 PPG form consistently. That said, Porter's dip in playoff production and concerns over his playoff mental makeup (compared to Murray or earlier playoff struggles) remain. But if Porter rediscovers his rhythm, the pick makes this an extremely high-upside haul for the Nets. Michael Porter Jr: C+ Porter gets a fresh start as the primary offensive option in Brooklyn, shedding the pressure of dominating shots alongside Jokic and Murray. He retains two years on an expensive contract, but now has a clearer path to showcase his scoring ability. Advertisement Success hinges on him rediscovering his 18+ PPG production and translating it into postseason impact, something that evaded him in Denver. However, this move is also a signal: Denver gave up on Porter's playoff development, which could weigh on his confidence. If he rebounds, it could validate the suitability of the contract and justify Brooklyn's gamble. But failure to progress further could anchor him as a well-paid "what-if" in Brooklyn's timeline. Bruce Brown: A Though not part of the swap, Bruce Brown's one-year deal with Denver adds immediate value. He's a proven two-way wing who fits seamlessly into Adelman's system, adding depth, playmaking, and championship experience. Advertisement Brown is the unsung gear in this offseason's engine, valued even higher in the wake of Porter's departure. His deal may well be the anchor that stabilizes Denver amid a reshuffle. This story was originally reported by Fadeaway World on Jun 30, 2025, where it first appeared.
Yahoo
29 minutes ago
- Yahoo
Minnesota Lynx Coach Issues Strong Statement Before Championship Game Against Fever
Minnesota Lynx Coach Issues Strong Statement Before Championship Game Against Fever originally appeared on Athlon Sports. There's a lot of hype surrounding the much-anticipated matchup between the Minnesota Lynx and the Indiana Fever on Tuesday night. These two teams will go head-to-head in a winner-take-all clash for the right to become the 2025 Commissioner's Cup champions. Advertisement Lynx head coach Cheryl Reeve has added to the buzz by sending a strong message ahead of her team's quest to defend their Commissioner's Cup title. The veteran shot-caller revealed how much her players are looking forward to this game. "I'm really happy for the players," Reeve said. "They are excited to play in this game, as I'm sure Indy is as well. "We've said this before winning the Cup, it's hardware. And money, right? So when there's money on the line and, they've talked about they're going to make more money in a Commissioner's Cup game than what they will in a deep playoff run. "And so this is really meaningful to them, especially some of our younger players. And the veterans are very aware of the meaning of that." Cheryl Reeve hopes to lead the Minnesota Lynx to another WNBA Commissioner's Cup title. © Kirby Lee-USA TODAY Sports The Lynx clearly have no shortage of motivation in this one. As Reeve touched on in her statement, the $500,000 prize money is something that has inspired her players. At the same time, winning a championship means everything to them as well. Advertisement "What's it mean? You want it," she continued. "You want it whatever the name of the championship, whatever it is, call it whatever kind of cup, whatever its championship, you want the hardware. This would be a feather in the cap for this team." There is no doubt that the Fever are pretty much in the same boat in terms of their desire to bring home the trophy. The big question, however, is whether Caitlin Clark will be able to play. The 23-year-old, who has missed Indiana's last two games due to a groin injury, has officially been listed as questionable for Tuesday's clash. Related: Indiana Fever's Exciting Message Sparks Caitlin Clark Speculation Related: Controversy Follows Caitlin Clark's All-Star Voting Result Related: Indiana Fever Guard Angered by WNBA's Expansion Decision This story was originally reported by Athlon Sports on Jul 1, 2025, where it first appeared.
Yahoo
31 minutes ago
- Yahoo
This Defense Stock Could Be the Next Palantir. Should You Buy It Now?
The host of the popular CNBC show 'Mad Money,' Jim Cramer, has turned cheerleader for a defense stock that has slipped under the radar of many. Touting it as the 'Palantir of Hardware,' Cramer believes that following stellar earnings, this company has the potential to be a massive wealth creator for investors, just like the Alex Karp-led company. What is this high-potential company? AeroVironment (AVAV). Jeff Bezos Unloads $5.4B in Amazon Shares: Should You Buy or Sell AMZN Stock Now? Options Flow Alert: Bulls Making Their Move in GOOGL Stock Elon Musk's Tesla Makes History With 'First Time That a Car Has Delivered Itself to Its Owner' Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Founded in 1971, AeroVironment initially focused on lightweight human-powered and solar-powered aircraft. Virginia-based AeroVironment (AVAV) has since evolved to focus on unmanned aerial vehicles (UAVs) and advanced defense technologies. With a market cap of nearly $7.7 billion, AVAV stock has rallied 85.4% on a year-to-date basis. The near term has been spectacular, with shares up more than 120% over the past three months and more than 45% in just the past five days. Is Jim Cramer right? And if so, how much farther can AeroVironment fly? A key aspect of the recent bullishness around the stock has been its blowout numbers for its fiscal Q4. AeroVironment reported a beat on both revenue and earnings. Revenues for Q4 were at $275.1 million, up 40% year over year and a new record for the company. Earnings moved up by almost 4 times in the same period to come in at $1.61 per share, compared to just $0.43 per share in the prior year and much ahead of the consensus estimate of $1.44 per share. Order backlog, a key indicator of both the demand for the company's products and services as well as revenue visibility, was at $726.6 million as of April 30, 2025. This marked a significant yearly uptick of 81.6% from the prior-year period. Although the company reported a net cash outflow from operating activities of $1.3 million in fiscal 2025, AeroVironment's liquidity position remained solid with a cash balance of $40.9 million and with no short-term debt on its books. In fact, the long-term debt of $30 million was also less than the cash balance, an impressive feat for a company in such a capital-intensive industry. For fiscal 2026, the company said it expects revenue to range between $1.9 billion and $2 billion and earnings to be between $2.80 and $3.00 per share. Drones front and center in modern warfare. As defense spending rises across the world, drones are going to play an even larger role. And this is where Cramer's 'Palantir of Hardware' stance for AeroVironment kicks in as the company's expertise in UAVs makes it a compelling contender to serve this rapidly growing and critical market. Evidence of this is AeroVironment's Switchblade 600 loitering munition being one of just three platforms selected for the initial tranche of the U.S. Department of Defense's Replicator program. Replicator Tranche 1 represents the program's inaugural phase, targeting the rapid deployment (within 18 to 24 months) of mass-produced, expendable autonomous platforms such as drones, loitering munitions, and unmanned maritime assets. The objective is clear: strengthen America's defensive capabilities through speed and scale to deter adversarial threats more effectively. Then, another critical piece of AeroVironment's value proposition is its Autonomy Retrofit Kit, powered by the AVACORE framework. This system equips legacy Puma airframes and future models with plug-and-play computer vision capabilities, enabling them to search, identify, and strike targets independently of radio commands. The advanced 600L variant exemplifies this leap in autonomy, as it features automatic armored-vehicle recognition, selectable approach vectors, and onboard target classification systems that drastically shorten the engagement timeline. Complementing these technical advancements is the firm's innovation arm, MacCready Works, which is integrating swarm-enabling code with Nvidia (NVDA) Jetson-class GPUs. This collaboration lays the groundwork for munitions capable of operating cooperatively in real time, allowing for dynamic in-mission retasking and coordinated strikes. Notably, AeroVironment is also no longer positioning itself as merely a drone manufacturer. With its acquisition of BlueHalo and the expansion of its Utah facility, the company is evolving into a more broadly diversified defense-technology player. BlueHalo's emphasis on software-defined systems is expected to accelerate margin expansion and free cash flow, supporting AeroVironment's ambitions for long-term double-digit growth. Crucially, AeroVironment's current portfolio is primed for the growing wave of AI-driven robotics. From its lightweight Raven reconnaissance drones to the Switchblade line of loitering weapons, its systems are naturally aligned for next-gen autonomous enhancements. Looking ahead, a new slate of products signals where AeroVironment is headed. The P550 eVTOL, for example, boasts a five-hour electric flight capability, supports payloads up to 15 pounds, and can deploy precision-guided munitions, potentially aligning with the Army's Long-Range Reconnaissance platform needs. Meanwhile, the JUMP 20-X modifies the firm's Group 3 VTOL for shipboard applications, featuring autonomous launch and recovery even in sea state-5 conditions, a bar few competitors can clear. Then there's Red Dragon, a strike drone designed for contested environments where GPS access is compromised. Its onboard vision-based targeting system makes it highly relevant for the kind of autonomous lethality envisioned by the Pentagon's Replicator strategy. Taken together, these developments reinforce AeroVironment's transformation from a niche player into a leading-edge defense innovator deeply aligned with the future of autonomous warfare. Thus, analysts have deemed AVAV stock to be a 'Strong Buy.' Both the mean target price as well as the high target price have already been surpassed, a testament to the stock's recent sharp rally. Out of 7 analysts covering the stock, six have a 'Strong Buy' rating and one has a 'Moderate Buy' rating. On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
