The Timberwolves last went into the luxury tax in the 2019-20 season. Owner Glen Taylor approved then-President of Basketball Operations Gersson Rosas' request to move slightly into the tax to complete the trade for D'Angelo Russell.
Taylor ended up paying a few million to make that trade happen. That will be a pittance compared to what the NBA's final tax bill will be once the Wolves are done in free agency this season.
The Wolves have made the decision organizationally to go for it. For this season and perhaps a few more, they will push all their chips into the center of the table, and maybe even go back to the cashier for more.
Or as President Tim Connelly put it on Wednesday: "We think we have a chance. We're at the big table, so it's not time to get scared now."
Sunday marks the start of NBA free agency, and the Wolves already made what is likely to be their most significant move of the offseason in picking up Kentucky guard Rob Dillingham at No. 8 in the first round of Wednesday's NBA draft. They secured Dillingham by sending a 2030 pick swap and a 2031 unprotected first-round pick to the Spurs.
The same motivation the Wolves had in making that deal is the same one that will prevent them from signing any free agents beyond their own for more than a minimum contract once free agency begins: the second apron. This is the second year this new quirk of the collective bargaining agreement is affecting teams, and the Wolves are entering that territory for the first time after not paying the luxury tax this past season.
The second apron was set at $190 million — $11 million past the first apron and $18 million above the luxury tax line. The Wolves are zooming past that thanks to large extensions coming on the books for Anthony Edwards (five years, $245 million), Jaden McDaniels (five years, $131 million) and Karl-Anthony Towns (four years, $221 million).
The Wolves' payroll already exceeds $190 million even before factoring in the rookie-scale salaries for Dillingham and 27th overall pick Terrence Shannon Jr. ESPN's Bobby Marks estimated the luxury tax bill could be around $84 million next season.
That could go higher as the Wolves attempt to fill out the rest of the roster in free agency, which begins at 5 p.m. Sunday. The second apron limits their options.
Here are the things the second apron restricts:
• Teams that exceed it have no access to the midlevel exception, which is a common way for teams over the salary cap and luxury tax to add free agents who make more than minimum salaries.
• It restricts their ability to make trades — salaries in trades must match almost dollar for dollar, and they can't take on any additional money in those deals, and teams can't aggregate salaries to send out. They can't use cash in trades and can't buy second-round draft picks.
• Teams can't use trade exceptions or use their own free agents in sign-and-trade deals.
• Once they finish the 2024-25 season over the second apron, their 2032 first-round pick will be frozen from being included in potential trades. To unfreeze it, the Wolves would have to dip under the second apron in three of the next four seasons. That would continue each year they are over the second apron. In the Wolves' case, they can't trade their 2032 pick anyway, because they just traded 2031, and under the league's Stepien Rule, teams can't trade first-round picks in consecutive years.
The first point is most significant for free agency purposes because it means the only recourse the Wolves have to rounding out their roster (which stands at 11 on the main roster, not counting two-way contracts) is to sign minimum-contract free agents or pay as much money as they want to re-sign their own free agents using their Bird Rights. Connelly has expressed a desire to run this team back as much as possible, and so he would like to bring back Kyle Anderson, Monte Morris and Jordan McLaughlin, each of whom are unrestricted free agents. The team would also like to retain Luka Garza, who is a restricted free agent.
"We want to retain our guys," Connelly said. "That's our goal. We want to retain our guys. Now, the market will impact that, but I'm a believer that if you have a good thing, you keep a good thing. We'd like to come back largely looking the same, maybe a little variance at the end of the roster with these new draft faces. But we really like what we have and we like what we're building, so I think the more guys we can get to come back, the better."
Beyond free agency, there are trades, but the second apron makes that a harder needle to thread as well. This was why what the Wolves did in trading for Dillingham was so significant. They made one of the only moves they could that were there for them outside the constraints of the second apron: trading draft capital for someone they think can be an impact player without having to worry about any of those rules.
"I would opine that Tim kind of laid the foundation for teams that are in our position going forward with the aprons and tax exposure and the cap exposure," Wolves Senior Vice President Matt Lloyd said this past week. "We had to address needs on the roster with limited resources, so we just utilized the draft as opposed to utilizing free agency or trades."
But free agency still carries a significant impact, especially related to Anderson, one of the team's most important pieces the past few years. Anderson said his son, who is on the autism spectrum, is thriving in Minnesota school systems, and that could be a consideration for him as he enters free agency.
But it's the NBA. Money talks. The Wolves have spent most of what they will spend next season, and then some. How much more will they end up doling out to keep this team together?
