The Knicks revealed on Friday that all contract extension discussions have been paused until the regular season gets underway, shelving urgent negotiations regarding potential new agreements for key figures like Karl-Anthony Towns and Josh Hart.
A primary hurdle in bringing back the identical roster that snapped New York’s 53-year title drought this past summer is navigating around the harsh consequences associated with surpassing the NBA’s spending limits.
Currently, the Knicks alongside the Warriors, Suns, Magic, Timberwolves, and Thunder exceed the initial apron threshold, which imposes distinct limitations. Meanwhile, the Nuggets stand alone as the only franchise above the second apron.
New York Knicks big man Karl-Anthony Towns (32) celebrates a made three-pointer alongside Washington Wizards center Deandre Ayton. AP Photo/Adam Hunger
When a franchise’s team salary surpasses the first apron—set at slightly more than $209 million for 2026-27—they are restricted to adding players through sign-and-trades only if the transaction drops their total payroll beneath that mark. Furthermore, they must balance outgoing and incoming salaries within a 110 percent window rather than the standard 125 percent, and are prohibited from signing buyout candidates during the season whose salaries exceed the midlevel exception.
Positioned at roughly $221.6 million this year, the second apron introduces even more stringent regulations that hamper a franchise’s capability to execute trades, lure marquee free agents, or secure top prospects during the opening round of the draft.
Knicks team owner James Dolan revels in victory following Game 5 of the NBA Finals against the San Antonio Spurs, clinching the championship at San Antonio’s Frost Bank Center on Saturday, June 13, 2026. Charles Wenzelberg / New York Post
Under the terms outlined in the NBA’s collective bargaining agreement, crossing into the second apron results in the following:
● Franchises are forbidden from aggregation, meaning they cannot bundle multiple players’ salaries together to absorb a higher-earning incoming player in a trade.
● Clubs forfeit access to the non-taxpayer midlevel exception, removing a key tool for luxury-tax-paying teams to recruit free agents.
● Their upcoming first-round draft selection becomes frozen and ineligible for trade, while cash inclusions in trades are entirely barred. Additionally, if an organization breaches the second apron in two out of four consecutive years, that locked draft pick automatically falls to the bottom of the first round, irrespective of the team’s record.
In essence, exceeding this second threshold creates immense friction for organizations trying to maintain competitive momentum or sustain powerhouse rosters; while this structure promotes competitive balance across the league, it frequently frustrates players as front offices are compelled to make tough calls on high-earning talent.
This very dilemma is precisely what New York is contending with at present.
Towns holds a player option valued at $61 million for the upcoming season and qualifies for a four-year maximum extension totaling up to $276 million. New York’s proposal stands near $200 million, and although Towns has expressed a willingness to accept less money—following the example set by fellow teammates—he emphasized that a significant gap remains between both parties.
For contract negotiations to continue past October 19, Towns would need to turn down his 2027-28 player option. If he decides to exercise that option alongside Hart’s, the Knicks would find themselves merely $21 million below the second apron mark with only eight roster spots filled—even assuming they opt out of team options for Tyler Kolek and Pacôme Dadiet—leaving six additional spots to fill to reach the mandatory 14-player minimum.
During the offseason, Knicks governor James Dolan publicly stated his unwillingness to cross the second apron threshold, even if doing so meant missing out on keeping the championship squad entirely intact.
Big man Mitchell Robinson departed for Boston on a three-year agreement, and a number of remaining key players are now eligible to negotiate extensions. Attending Knicks training camp on a tryout, Bruce Brown recently voiced frustration over how the second apron limits organizations from properly compensating mid-level athletes.
“This updated agreement benefits max-contract stars, top free agents, and players signing rookie extensions. But for guys in the middle class, it’s really tough. Hardly anyone is securing the full mid-level option anymore,” he noted.
In response to such criticisms, the league issued a statement countering those arguments, asserting that “overall yearly payrolls have expanded by close to $1.3 billion, yielding salary growth of roughly 30% across every tier of players.”
While the second apron incentivizes ownership to keep payrolls manageable, it negatively impacts athletes who discover their clubs are financially constrained from offering desired or deserved compensation, ultimately forcing them to pursue opportunities with other franchises.
