The recent blockbuster trade sending Karl-Anthony Towns to the New York Knicks is a prime example of how the new CBA shapes team-building strategies in the NBA. In a three-team deal involving the Minnesota Timberwolves and the Charlotte Hornets, New York acquired Towns while navigating strict salary cap rules that make high-profile trades such as this one increasingly complex.

 

New York’s Salary Cap Maneuvering

 

The Knicks are a first apron team and are hard-capped at the second apron due to their earlier acquisition of Mikal Bridges. They can not take back more money in a trade. Towns' cap hit is $49.2 million for the 2024-25 season; the Knicks sent out Julius Randle’s $33.07 million cap hit (after his trade bonus), along with Donte DiVincenzo’s $11.45 million and Keita Bates-Diop’s $2.65 million. The Knicks were still short of the required outgoing salary and therefore executed sign-and-trade deals with DaQuan Jeffries, Charlie Brown Jr., and Duane Washington Jr. The salaries of these players were slightly elevated above the minimum salary to match salary and be CBA compliant (as little as $1 above minimum according to The Atheltic’s Fred Katz). There is a rule in the CBA prohibiting the aggregation of multiple minimum-salary players in trades when that team is acquiring fewer players than they are sending out (Article VII, Section 6(j)(4)(ii)).

 

Second Apron Limitations for Minnesota

 

The Timberwolves are a second apron team, and are not hard-capped because they did not violate any of the rules of the apron (see “Apron Restrictions + Knicks”). They cannot aggregate contracts in trades, nor can they take back more salary than they send out. The Timberwolves had to part with Towns while ensuring that their incoming contracts did not exceed Towns’ salary. They acquire Julius Randle, Donte Divincenzo and Keita Bates-Diop. Randle has a player option for the 2025-2026 season for around $30.94 million and is eligible to sign a 3 year extension, or 4 years (for $181 million) if he waits 6 months post-trade. They also receive the Detroit Pistons’ 2025 first-round pick, which is top-13 protected, from the Knicks.

 

The Role of the Hornets and the Knicks' Creative Solutions

 

The Hornets used their room exception to absorb the contracts of DaQuan Jeffries, Charlie Brown Jr. and Duane Washington Jr. The room exception is available for teams to use that started the league year under the salary cap, and subsequently use up their cap space and go over the cap. The room exception for the 2024-2025 NBA season is $7.98 millionCharlotte also acquires a 2025 second-round pick (either from the Nuggets or Sixers, whichever is least favourable), a 2026 second-round pick (from the Warriors, via the Knicks), a 2031 second-round pick (from the Knicks), and $7.2 million in cash considerationsEach team is allowed to send or receive up to a certain amount of cash considerations per league year. For the 2024-25 season, the maximum amount a team can send or receive in cash considerations is $7.2 million. This amount covered the cost of the three players the Hornets acquired and gave them $400,000 profit.

 

Bottom Line

 

The Knicks strengthened their core by acquiring Karl-Anthony Towns, adding to a roster built for immediate contention while maintaining long-term flexibility. For the Timberwolves, the trade provides salary relief and adds key assets in Julius Randle, and Donte DiVincenzo which improves their depth. The trade reshapes both franchises, with the Knicks enhancing their title aspirations by adding Towns, while the Timberwolves gain financial flexibility and give their squad a new look.

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Published October 12, 2024.