What does the Knicks’ cap outlook look like after the KAT trade?

The trade is done. Did the Knicks just exhaust every last bit of flexibility that they had left?

The new CBA has made everyone who covers basketball’s life a living hell. It used to be extremely simple to consider cap implications for trades and signings, but now it’s like solving a Rubik’s Cube. Many organizations around the NBA seem to struggle with these rules and I personally can’t blame them. One organization that’s mastered it, however, is the New York Knicks. When you go to bed tonight, make sure you thank the heavens for Brock Aller for the cap wizardry he conducted to maximize this roster.

Ok, what’s the trade? What does it mean for us? How does the average fan process this?

The tall and the short of it is this.

Add Karl-Anthony Towns + draft rights to James Nnaji

Subtract Julius Randle, Donte DiVincenzo, Keita Bates-Diop + DET 1st-Rd pick + two 2nd-Rd picks

The three sign-and-traded Knicks, Duane Washington, Da’Quan Jeffries, and Charlie Brown Jr, were merely Knick cap holds. To weave around the CBA’s rule about not aggregating minimums, the cap wizards in our front office gave those three deals that gave them $1 over the minimum. Yes, you heard that right.

Before we move on to Knicks’ matters, I want to touch on some hidden language in Donte and Julius’ deals. Donte has some extremely unlikely incentives that pay him $750,000 if he achieves some insane things like MVP or All-NBA. Randle had unlikely (and likely) incentives. The nature of the unlikely incentive will likely die with the new CBA’s cap gymnastics. Randle was due to receive one of those incentives this year for being an all-star but has a $1.3 million unlikely incentive because of the missed time from shoulder surgery. Julius also had a 15% trade kicker that was triggered. He will now have a cap hit of over $33 million and an apron hit of $34.45 million. I’m sure $4 million is good compensation for a trade.

Ok. Onto our side.

Karl-Anthony Towns signed a supermax extension two years ago with the Minnesota Timberwolves that would pay him a maximum of $221 million over four years. That extension starts now. I’ll level with y’all, I wasn’t a fan of the trade when it was announced and I still have reservations. That contract is partially why. He becomes the highest-paid Knick by a good chunk, making $49.4 million in 2024-25. When he gets to his 2027-28 player option? $61.2 million. Those numbers make me faint.

However, we have to remember that the NBA is a booming business with a spiking salary cap. We have to remember that we got Mikal Bridges for relatively cheap these next two years. We also have to remember that our captain, the King of New York Jalen Brunson, signed the most team-friendly contract extension imaginable to give the Knicks the flexibility to make these upgrades. How would things look if the Knicks did this and Brunson waited for his $270 million payday? It would be very, very ugly.

Let’s look at the cap table, shall we?

The Knicks have no room under the second apron, which they are not allowed to exceed this season because they aggregated salaries in a trade. With only 12 rostered players, it’s going to be interesting to see what they do. Landry Shamet appears like a lock to be #13, but is the fourteenth man just going to have to be a converted two-way like Jacob Toppin? Based on the tea leaves from reporters, it seems so. Two guys to watch, however, are Chuma Okeke and TJ Warren, who are joining camp in Charleston. I do not believe the Knicks can roster two of these three vets.

But, we knew this already. What does this mean for the future outlook? As most know, Julius Randle was likely hitting unrestricted free agency next offseason with a $31 million player option likely being declined. Now? Karl-Anthony Towns will make a team-high $53.3 million next year. Ultimately, the Knicks have nine rostered players making a combined $194.5 million for the 2025-26 season. That will be already over the projected luxury tax for next season with five vacant roster spots.

That’s not good. However, the Knicks are focusing on the second apron for these purposes. The luxury tax is a given. Per SalarySwish, the projected second apron for 2025-26 is $207.8 million. That’s just over $13 million. The Knicks will likely have one pick (a second) next year and you could likely fill the other four with the remaining money. The only players you would lose of importance are Precious Achiuwa and Jericho Sims.

This is where it gets hairy. By the time we get to the 2026-27 season, Anunoby and Towns will make a combined $99.75 million. With just seven guaranteed players, the Knicks would already be over the cap with a current commitment of over $167 million. The problem? Mikal Bridges and Mitchell Robinson are free agents.

All signs point towards Bridges extending for the long haul, but not quite yet. He became eligible for an extension on Tuesday and after Brunson signed his, it looked like he would ink the two-year, $61 million deal. However, he seems more likely to wait a year now, when he’ll be eligible to extend through 2029-30 on a four-year, $146 million pact. This would be a considerable discount from what his services will fetch in free agency, so we’ll see if he follows his Villanova brethren in taking a paycut. It would put his Year 1 salary at around $33 million if it was the 4/146 on a typical ascending deal.

That already throws the Knicks up to $200 million and just $24 million in space below the second apron with six open roster spots. I personally don’t see Robinson making it through the next two seasons, but if he turns things around and makes himself worth it, he would command a decent amount (and the Knicks would be able to re-sign him, or whoever he would be dealt for, because of Bird Rights). All in all, it feels like the Knicks are going to go into the second apron here. It’s bad, but if you play it right, you can avoid the worst punishments.

The two hardest punishments with the second apron are as follows: if you are above the second apron, your draft pick seven years out is frozen and unable to be traded, and if you are above the second apron three times in five years, that frozen pick is permanently pinned to 30th overall.

You can get out of the first punishment by dipping underneath the apron for three of the next four years. You can’t get out of the second one. So, let’s apply it to the Knicks:

Knicks exceed the second apron in 2026-27, their 2034 1st Round Pick is frozen.

Knicks stay above the second apron for 2027-28, their 2035 1st Round Pick is frozen.

After 2028, KAT and Brunson are likely free agents, OG has a player option for 28-29 as well. If the Knicks stagnate and don’t make a move in these four years, they could opt to pivot organizationally. Does it mean blowing it up? Maybe. Could just be a retool.

Knicks dip below the second apron in 2028-29. They do this to avoid their 2034 pick dropping to 30. Also by this time, the contention window is closing. The current core is all in their 30s. If titles don’t result in the next four years, it’s very possible the Knicks cut payroll and retool/rebuild to try again. If the Knicks stay below the second apron in 29-30 as well, the 2034 pick unfreezes, and if they’re also below it in 30-31? They avoid it dropping to 30.

Look, if Brock Aller is still around (I’d be shocked if he wasn’t running his own franchise by 2026), he’ll figure out a way. This is a guy who has perfectly maneuvered the modern-day NBA.

Did this all sound like complicated nerd math to you? That’s okay, it’s normal. Here’s a TLDR:

The KAT trade pushes the Knicks up against the vaunted second apron, but they should still be good to stay below it for the 2025-26 season. However, assuming Bridges extends, the Knicks likely go over in the next two seasons to optimize this contention window. Because of the predatory rules surrounding the second apron and the way the Knicks’ contracts line up, this may be a four-to-five-year window. The Knicks are win-now and if winning hasn’t happened by 2028-29? They could blow it up or have another extremely active offseason like this to avoid penalties.

Got it? No? Oh well, I tried.

Go Knicks.