This is a graphic shared by Bobby Marks from ESPN outlining the rules of the Apron.

 

Following the trade where the Nets sent Mikal Bridges to the Knicks for Bojan Bogdanovic and draft picks, the Knicks find themselves hard capped at the first apron because they violated the rule saying that they are not allowed to take back more money in a trade. Including cap holds, the Knicks are on track to be a second apron team. In the offseason, cap holds are included when calculating a team's total salary to determine if they are over the apron.  Teams above the apron cannot sign free agents unless to minimum contracts (first apron teams can sign free agents using the taxpayer midlevel exception). Using bird rights however, a team can sign their own pending free agents even if the team is hard capped. They are limited in what they can offer them. Using the Knicks as an example, if they want to bring back Isaiah Hartenstein (early bird rights), the maximum they can offer right now is structured as follows:

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Year 1: $14 million (175% of his previous salary of $8 million)

Year 2: $14 million + 8% of $14 million = $15.12 million

Year 3: $15.12 million + $1.12 million = $16.24 million

Year 4: $16.24 million + $1.12 million = $17.36 million

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​Total value over four years: $62.72 million

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The Knicks also just signed OG Anunoby today to a 5 year $212.5 million contract.​​