Bucks’ cap situation explained: Unlikely bonuses, exceptions, second apron and more

On Thursday, the Bucks finished their fourth Summer League game in Las Vegas, a 91-72 loss to the Heat, dropping their 2023 NBA Summer League record to 2-2. Their two losses kept them out of tournament play, and now the Bucks will wrap up their Summer League schedule with a game on Saturday against the Kings at 3:30 p.m. CT.

While the team’s summer league play now has a clear end date, it remains unclear when Bucks general manager Jon Horst will fill the final spot on the team’s 15-man roster. For now, the Bucks’ NBA roster is 14 players with the current depth chart looking like this:

Earlier this week, Horst sat down Athletics to discuss the Bucks’ offseason moves, as well as the current shape of the Bucks’ roster. In that interview, he revealed that he is “pleased” with how the team is currently handling the point guard position, which would mean Horst could use the final roster spot to bring back Thanasis Antetokounmpo for a fifth straight season.

Current salary cap projections, depending on the source, put the Bucks’ 14-player payroll somewhere between $179.5 and $180 million. With the second luxury tax apron at $182,794,000 for the 2023-24 season, that should mean the Bucks can easily fit a minimum contract ($2,019,395) onto their salary cap and stay under the second apron. In a recent interview with the Milwaukee Journal-SentinelHowever, Horst said the Bucks “are over the other apron this season.”

Knowing what we already know about the Bucks’ salary cap table and where the second luxury tax apron has been placed, how is that possible?

To help me understand the situation, I lost Athletics‘s former NBA executive John Hollinger and asked him to explain the situation to me (slowly) so I could understand one of the quirks of the NBA’s new collective bargaining agreement.

Hollinger: The NBA’s new collective bargaining agreement (CBA) provided some new terms, including a new tier above the luxury tax called the second tier. That level is especially important for the Bucks as they threaten to be above it this year, and it would limit some of the moves the Bucks could make. However, these restrictions will become more severe and punitive next season, as the league has decided to use this season as a kind of transition between the last CBA and the new CBA.

So while there is considerable anxiety about the second berth around the league, the only limit placed on the Bucks this season to go above the second berth was not being able to use the taxpayers’ mid-level exception. They also won’t be able to sign a player on the “buyout market” if that player had a pre-waiver salary greater than this year’s non-taxpayer mid-level exception ($12.4 million), but that was actually true when the Bucks (or any) other team) crossed the threshold for the first luxury tax apron ($172,294,000).

However, the quick description of the second luxury tax apron does not answer your first question. And “are the Bucks over the other apron?” is a more complicated question than it first appears.

Let’s start from the top. Each player has a “cap number” that is usually, but not always, the same as the player’s salary plus any “likely earned” incentives for that year.

Among the things not included in the salary cap figure are players’ incentive bonuses for the year, which are considered unlikely. However, these bonuses count towards the apron.

As a result, most online cap sheets show the Bucks with a combined salary of $179,681,789 for their 14 players under contract. That would leave them about $3 million short of the second place finish of $182.7 million. While the league doesn’t explicitly state its rationale for the salary cap rules, there is logic in counting all improbable bonuses for the bullpen. The berth is actually a hard cap for teams taking certain actions (such as using non-taxpayer MLE for first berth or taxpayer MLE for second berth), so the league’s logic is that there must be no option at all of a team exceeding the hard cap. Thus, the league would count any improbable bonuses into the calculation because the possibility of those bonuses hitting — however remote — could result in a team’s salary exceeding the hard limit.

For a team like the Bucks, who have multiple contracts with large incentive bonuses, that distinction is important. Most notably, Jrue Holiday has $4,401,040 in incentives for this year that are considered “unlikely” and therefore do not count toward his $36,801,707 cap number. Since these incentives do counts for the purpose of the apron, but he goes on the books for that calculation at $41,202,747.

Holiday is not the only one. Khris Middleton’s new contract has $2,345,679 in non-probable incentives for this season, while Grayson Allen has $850,000.

Finally, there is the somewhat unusual case of AJ Green. For an undrafted player with less than two years of experience, his salary counts toward the frontcourt as the two-year minimum of $2,019,763. However, Green is on the cap sheet at $1,901,769, which means an additional $119,793 must be paid to their calculation for the apron for Green.

In reality, they have already blown past the second apron and would have to get back under it before they could engage in any of the prohibited activities listed above. The unlikely incentives for Holiday, Allen and Middleton, plus what the league calls “cap-tax variance” for Green, add $7,714,656 to Milwaukee’s books for this year. That puts the Bucks’ total payroll for apron purposes at $187,406,535 — nearly $5 million past the frontcourt.

Simple, right?

(Photo of Jrue Holiday and Khris Middleton: Patrick McDermott/Getty Images)

Leave a Comment