What is the NBA's second apron? Luxury tax rules, restrictions and more explored

The NBA's offseason is upon us after the Boston Celtics' Game 5 win over the Dallas Mavericks on Monday. Although the free agency period doesn't officially start until the afternoon of June 30 at 3 p.m. PT, teams are able to negotiate thanks to a new CBA rule. With negotiations underway, fans and analysts are using terms like the luxury tax and the second apron.

The first and second NBA luxury tax aprons are an effort to influence team spending with the goal of creating parity around the league. Rather than allowing teams to spend freely and small market teams being out-spent in free agency, the NBA has aprons to penalize teams who spend too much.

On April 5, longtime NBA insider Adrian Wojnarowski shared the league's salary cap projections for the 2024-25 season. The figures remained the same as the league's projections back in January, with the salary cap projected to be $141 million and the luxury tax level projected at $172 million.

This is up from a $136 million salary cap for the 2023-24 season with a $165.29 million luxury tax. In addition, for the 2023-24 season, the first apron was set $7 million above the luxury tax line, with the second apron $17.5 million over the tax line.

Teams exceeding the $141 million salary cap will fall under the luxury tax umbrella. Teams who exceed the $172 million luxury tax level will then cross the first apron.

The league's Collective Bargaining Agreement has put the two aprons in place as a way to penalize teams who overspend.

Looking further at the NBA's first and second aprons, as well as the penalties and restrictions imposed on repeat offenders

As reported by Adrian Wojnarowski, the 2024-25 first apron is projected to be at $179 million. When teams cross the first apron, the league imposes restrictions and issues penalties as a way of punishing teams who overspend.

Teams who cross the first apron face several restrictions:

First, they can no longer complete sign-and-trade deals unless those deals bring them below the first apron.

Second, they must adhere to a 110% salary match when making trades rather than 125%.

Third, they are limited when it comes to signing players who have been waived and have a salary over the $12.2 million MLE.

Teams who then cross the second apron, projected to be $190 million for the 2024-25 season, will face additional penalties. Starting with this past 2023-24 season, the league has added several new penalties and restrictions for teams who cross the second apron for three out of five recent seasons.

In addition to all of the penalties mentioned above for crossing the first apron, teams who cross the second apron are banned from using the $5 million taxpayer MLE.

Starting with this past season, teams will face additional penalties. First, they face restrictions on trade exceptions and are barred from including cash in trades. When it comes to the draft, the league will also freeze first-round draft picks seven years down the road, in this case, the 2030-31 season.

Finally, teams who stay above the second apron for three out of five of their most recent seasons will have their first-round pick moved to the end of the first round.

With a new CBA and harsher penalties for teams that cross the second apron, it's clear that Adam Silver and the NBA want to level the playing field between large and small market teams.

Which teams crossed the luxury tax line for the 2023-24 season?

With the offseason underway, it's important to note that eight teams crossed the luxury tax line for the 2023-24 NBA season. While several teams just barely crossed the line, others, such as the Golden State Warriors and the LA Clippers, blew past it.

Below, you can see how much each team exceeded the luxury tax:

• Warriors: $40.3M
• Clippers: $34.8M
• Suns: $26.2M
• Celtics: $18.4M
• Bucks: $16.9M
• Nuggets: $12.6M
• Heat: $9.4M
• Lakers: $2.8M