What Is the NBA Second Apron and How Does It Work?

These days, it’s hard to hear NBA media that doesn’t mention the NBA second apron. 

That’s because the second apron – a new set of CBA rules that governs finance and contract rules in the NBA – has a huge impact on what how teams structure their rosters going forward. It has completely reshaped what NBA teams are able to do.

Because the second apron affects roster construction, it has a real impact on NBA betting odds and the NBA championship odds market. It’s important for both fans and bettors to understand how it works. 

What Is the Second Apron In the NBA?

The second apron is a new, additional layer of penalties that takes full effect for the first time during the 2024 offseason. 

Teams that spend above the second apron threshold are subject to very harsh penalties that affect their ability to conduct certain kinds of transactions and maintain a competitive team. 

Teams who spend above the second apron threshold in multiple times in the same period accrue additional harsh penalties that affect, among other things, future draft picks. 

To really understand where the second apron came from, let’s review a little recent history on why it was installed in the first place.

NBA Salary Cap History

I can feel your eyes glazing over, but I promise this won’t be super boring. Remember the 2010s, when many of the top contenders were just the ones spending the most money? 

Remember how Golden State, in particular, built a super team that no one really ever had any chance to beat?

That’s mostly how the current NBA got a second apron. The NBA has a soft cap, meaning it’s enforced via a luxury tax. Historically, clubs have been allowed to build super teams by paying their players over the salary limitations. All they have to do is be willing to pay $1 extra for every dollar they’re over the limit. 

Compare that to a hard cap, like the NFL, where teams who violate the cap rules can have contracts canceled and draft picks removed.

In the NBA, the soft cap luxury tax rule is a huge advantage for wealthy teams that can afford to pay tens of millions in luxury tax to afford an anticompetitive team. Nowhere was this more true than the case of the late 2010s Warriors, who were essentially printing money at Oracle Arena in the San Francisco bay area.

In the wake of the Warriors dynasty, the second apron was born. Teams who exceed the soft cap in the first apron suffer mild penalties that are more in line with the traditional penalties for the NBA. 

On top of that, teams that blow through the first apron and enter the second apron are severely punished via a new set of intentionally harsh penalties. 

I outline those penalties below.

How Does the Second Apron Work?

Essentially, a team can now have three financial statuses: good standing, Penalty 1, or Penalty 2. The second penalty status is the new second apron status.

Prior to the second apron CBA adjustments, the relationship was much more binary. 

NBA First Apron Penalties

• Teams can only acquire sign-and-trade players if they move them below the apron.
• Teams who execute a trade must match salaries within 110% of the outgoing obligation. Compare this to teams in good standing, which have a broader match window at 125%.
• Teams cannot sign any players waived during the regular season if their salary is greater than the midlevel exception.

NBA Second Apron Penalties

• Teams do not have level to the taxpayer midlevel exception.
• Teams cannot use trade exceptions created when combining the salaries of multiple players.
• Teams cannot use trade exceptions from any prior year.
• Teams lose the ability to trade first-round picks that are seven years in the future.
• If teams remain in the second apron for any three years in a five-year period, their upcoming first-round draft pick is automatically moved to the end of the first round.