A peek at the Thunder’s salary cap situation with the roster finalized

A peek at the Thunder’s salary cap situation with the roster finalized

The Thunder roster is set for the start of the regular season. Where is its payroll in regards to the luxury tax? What the heck is a salary cap apron? Get a quick lesson in salary capology with this analysis of the Thunder cap situation.

Jon Hamm

By Jon Hamm

| Oct 24, 2023, 10:00am CDT

Jon Hamm

By Jon Hamm

Oct 24, 2023, 10:00am CDT

The Oklahoma City Thunder made a pair of transactions to trim its roster to 18 players — 15 on standard NBA contracts and 3 on two-way contracts — before the start of the regular season.

OKC opened training camp with 21 players, the most a team is allowed to carry during the offseason. The Thunder began trimming down the roster by trading injured guard Victor Oladipo — along with reserve forward Jeremiah Robinson-Earl — to Houston in exchange for troubled guard Kevin Porter Jr. and a pair of future second-round picks. Porter Jr. was waived about a nanosecond after the deal was completed, as he was nothing more than a financial responsibility that was moved from one place to another. Robinson-Earl was eventually waived by the Rockets.

The final roster decision was made on Sunday when forward Jack White was waived. White signed with OKC in the offseason but his contract was only guaranteed for $600,000. OKC had the financial flexibility to offer White a chance to compete for a roster spot and, at a minimum, earn more than he would on a two-way contract.

For the salary cap fanatics in the crowd, OKC enters the season with a little over $153 million on its cap sheet this season. A few other dribbles of information related to that:

Hard Capped

The new CBA makes it extremely easy to trigger one of the salary cap aprons — a hard spending limit imposed on teams for the rest of the season. The Thunder tripped the hard cap trap in July when it re-routed Patty Mills to Atlanta for Rudy Gay, TyTy Washington, Usman Garuba, and a pair of future second round picks.

That main point of that trade was, you guessed it, all about acquiring the picks. But because OKC made a trade that acquired more than 110 percent of Mills’ salary, the first apron restriction was enacted. That means the Thunder’s salaries can’t exceed $172,346,000 until July 1, 2024.

That’s not a huge issue for the Thunder, which enters the season roughly $19.7 million below that number. It could use that room as a tool to make upgrades during the season or pick up even more future draft picks from teams seeking to dump salary.

Tax Avoidance

OKC has a team loaded with a first-team All-NBA star and a slew of promising prospects aged 22 and younger. A majority of those players are on rookie scale contracts which are typically below market value. After just three seasons of rebuilding, the Thunder has a stacked roster and is still about $12 million under the luxury tax line. 

The day may come when the Thunder needs to tread into luxury tax waters to keep its squad together, but that’s years away. For now it can comfortably add to its payroll if needed to add assets, whether that helps the team immediately or in the future.

Cap Flexibility

OKC’s payroll flexibility is on track to extend into next season and possibly into the 2025-26 season, depending on other moves they make. The Thunder may continue to use its under-the-cap and under-the-tax spending in order to add to its pick collection in the meantime. That may not sound exciting now, but it could all come together in a few years if OKC is able to keep adding inexpensive draftees to the core group that fans are fired up about today.

Trade Flexibility

The new CBA loosened up trade rules for teams in the Thunder’s position. Because of OKC’s position underneath the first apron and distance from the luxury tax line, they have more room to work with when it comes to matching salaries in a trade. 

If it sends out $7.25 million or less, OKC can take back 200 percent of the total amount plus $250,000. If it sends out between $7.26 and $29 million, the Thunder can take back up to $7.5 million more. There’s another tier for trade packages larger than $29 million, but it’s unlikely that the Thunder will have such a scenario this season.

As an example, if the Thunder made a trade that sent out $3 million in total salary, it could take back up to $6.25 million. A larger trade with a hypothetical $18 million in outgoing salary would allow OKC to take back up to $25.5 million.

Again, OKC may not be primarily motivated in trading for expensive role players to boost the rotation. It is more likely to use that salary cushion to absorb another team’s unwanted salary, with draft compensation added. That is how the Thunder has essentially “bought” several picks over the past few seasons.

The Bottom Line

The Thunder find itself at the perfect intersection of “young and upcoming team” and “positioned to be agile”. There are no long-term, bloated contracts to fuss with. OKC can still be agile and make trades if they present themselves. The one thing the team needs most is time, an asset that cannot be traded for.

 

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