There’s been so much complaining about the second apron over the past several weeks that as a chronically disagreeable person who’s skeptical of consensus, and particularly internet consensus, I do find myself tempted to zag. Unfortunately, I can’t get there. I’ve been mad at the second apron since the day the CBA was agreed upon in 2023. I remember this vividly. My son had been born the day before and I was in an exhausted fog, parsing the details from the hospital, baffled that people weren’t more upset about what the league had just done. So yes, I hated it then as much as everyone else does now, and three years later I remain resolutely annoyed.
In lieu of a zag, then, let me tell you that some of the Johnny-come-lately apron haters who have emerged this summer seem to be mad for the wrong reasons. The problem isn’t that a few players are taking less money, that owners are spending less, or that fans are being betrayed (that’s been happening for quite some time). The problem with the second apron is that it’s working predictably and effectively to engineer parity that will render the whole league less meaningful over time—and potentially less profitable, too.
Stepping back, for anyone unfamiliar with the particulars of the controversy at issue: over the past three weeks the Knicks were forced to part with Mitchell Robinson, the Thunder traded Lu Dort earlier this week, and most notably, the Celtics traded Jaylen Brown for (maybe) 30 cents on the dollar at the beginning of July. Two years ago, the Wolves traded Karl-Anthony Towns. Last summer the Nuggets traded Michael Porter Jr. Each of those players was a homegrown talent that fans loved (or at least liked, in MPJ’s case).
Conversely, fans hate the collective bargaining agreement that has spurred those cost-conscious moves (and many others) thanks to the introduction of “the second apron,” a spending threshold that will be set at $221,686,000 this year. Any team that spends beyond that number will be met with severe financial penalties, as well as competitive constraints that compound if teams remain above the apron for consecutive seasons. Most teams around the league are now treating it like a hard cap. None of the 30 teams is currently projected to exceed this year’s second apron threshold, and in addition to all the player movement, certain superstars (Jalen Brunson a few years ago, Victor Wembanyama this summer) are taking less money to allow their teams to add and retain talent.
For a sample of how these changes have been received, here is unofficial NBA ombudsman and my one-time Grantland boss, Bill Simmons:
“The second apron that they put in is having so many ramifications for team building, player building. And they did this to basically protect the owners, so everybody could make more money. All of these things are smart financial moves. But I don’t think any of these things have made the NBA better. Because they’re making business decisions and not league decisions. Adam Silver’s job is to elevate the league and make money, has he elevated the league this decade?”
The end of that Simmons digression is spot on and important, but there seems to be a prevailing sense that the second apron is about saving owners money and “smart financial moves.” That’s wrong. This system was put in place because of clumsy basketball instincts, not savvy business instincts. Owners are still paying out 51% of basketball related income (BRI) to players, while the most recent CBA mandated that every team has to hit a salary floor of 90% of the salary cap. There may be less pressure for individual owners to keep up with Steve Ballmer’s luxury tax spending, but on the other hand, the salary floor eliminates the gravy train where bad teams could skimp on their roster and collect luxury payouts from the rest of the league.
For owners as a class, I’d say the new CBA is different, but not necessarily better. For players as a class, the money is mostly the same. Silver, meanwhile, sees a system that has redistributed talent and is working exactly as intended. When asked about apron-conscious player movement last week in Vegas, the commissioner was defiant:
“It’s certainly not an unintended consequence. When you have a salary system in place as we do, every general manager is going to need to make mixed basketball and business decisions. Frankly, they make them regardless of whether you have a cap. You see that in other sports. People manage budgets. People recognize that you can’t — at some point, you can’t have unlimited resources, whether it’s for a team or any business….
“The purpose of the system is ultimately to create competition throughout the league, and from that standpoint, I think the system is working incredibly well. The goal isn’t necessarily to have a different champion every year, but we’ve had eight different champions over the last eight years. As I’ve said previously, one of the things we were hoping to accomplish in this latest collective bargaining agreement was to dispel this notion that only certain markets were in a position to truly compete. We just saw a Finals between, essentially, the largest market in the league in New York and one of the smallest markets in San Antonio.”
Indeed, the new system is an effort to create the hard cap parity that Silver has craved since the 2011 lockout. It’s not a bailout to owners who hate spending, and while the middle class among the players may be squeezed and one or two superstars may take less to compete, Wemby is still guaranteed $252 million and players overall are still getting the exact same share of the BRI pie.
What interests me is the future of that pie. If you’ll forgive one more excerpt, a bit of news that got less attention than the Jaylen Brown trade this summer was the NBA’s reduced forecast for next year’s salary cap, and further confirmation that the league’s growth is slowing. From the Entertainment Strategy Guy:
Two years ago, I poured cold water on the massive headlines that the NBA TRIPLED!!!!!! ITS MEDIA RIGHTS DEAL!!!!!!! pointing out that they had to add years, games, a third media partner, and global rights to get those headlines, and even with all of that, this deal’s annual increases were actually smaller than the last deal. …
Since then, many, many NBA pundits and fans pointed to this deal as a sign of the NBA’s league-wide health, and many/most people expected that the salary cap would go up by the max allowed in the collective bargaining agreement of 10% for several years in a row.
Just two weeks ago, the NBA announced the [salary cap] projections for the 2027-2028 season: 5.5%. Last summer, they projected that the 2026-2027 [salary cap] would grow by 7%, but actually came in at 6.7%. The league’s growth is actually slowing down. …
[W]hat matters is why. As much as the national media rights deal went up, it’s being offset by losses in local media rights, something I was very worried about two years ago. Making it worse, the new media rights deal didn’t actually increase, in percentage terms, as much as the previous media rights deal—the 2025 deal increases by 10% per year versus 11.7% for the 2016 deal—something almost no one mentioned at the time. If you factor in the extra packages, then the league only increased media rights around 5.5 to 6.7% per year.
The cap isn’t contracting, but local TV revenue sure is, and growth targets are getting more modest every year. The league’s already heavily reliant on national TV deals, and as the RSN ecosystem continues its slow march to extinction, that dependence will only become more profound. The current rights deal runs until 2036 so this is not an urgent problem, but it’s nevertheless the question that will decide the league’s financial future: what will grow the game at a national level over the next 10 years, preserving the league’s value to national TV partners?
It’s way too early to speculate on the market for a new TV deal in 2036, but this is where I think Silver erred with the new CBA in a way that was both obvious and maddening to me back when I was sitting in the maternity ward next to my sleeping son. With a system designed to “create competition throughout the league” and “dispel this notion that only certain markets were in a position to truly compete,” the league has imposed a structure that makes it incredibly difficult for its best, most memorable teams to retain talent and thrive across multiple years.
Yes, there’s increased player movement and parity, but more often than not that looks like the Celtics-Sixers trade this summer: A decent team in Philadelphia got marginally better and way more expensive, but still isn’t good enough to contend. A potentially great team in Boston lost a franchise cornerstone, forfeited some playoff upside, and is probably worse next season. What’s actually being achieved there?
Or go beyond Philly and Boston this summer: How many 50-win teams from last year actually got better going into next season? I’m willing to give my Wolves a TBD, but they had to bet the remainder of the decade on LaMelo Ball and his degenerative ankles just for the mere possibility of improving. Beyond that, I got nothing.
Silver’s bet, meanwhile, is that a world in which every market feels like it has a chance at a title is a world that creates more national interest in the league, generally. And look: I’ve liked Silver as a person the few times we’ve interacted, but I’ve been critical of him as a commissioner, and I think one of the biggest problems he has is that he doesn’t quite understand basketball fandom or what has traditionally made the league successful. The push for parity is a good example of those blindspots.
I see three problems. First, fans are smart enough to realize that you generally need superstars to have a chance at winning a title in the NBA. In any given year, there are maybe 10 players who fit that bill. For fans of teams that don’t have one of those players, the chance at winning 45 games and losing in the first round of the playoffs is not going to drive much additional interest during the season. Are the Atlanta Hawks setting the city on fire with Jalen Johnson and CJ McCollum? No they are not, and they’re certainly not drawing additional fans nationally. The teams that actually move the needle across a six month regular season either bring massive big-market fanbases, or once-in-a-lifetime superstars that every basketball fan wants to see. No amount of cap engineering is going to create a league with 20 teams that check those boxes.
Second, the teams that do check those boxes are frequently handicapped by the obligation to pay massive salaries to their best players and then fill out their rosters with spare parts. For every Shai or Wemby, two players who have lucked into great situations with stable foundations, there are twice as many examples of superstars marooned on good-but-not-great teams without a clear path to improve. Consider Steph Curry in Golden State, Nikola Jokic in Denver, Giannis Antetokounmpo in Milwaukee for most of this decade, Anthony Edwards in Minnesota with Julius Randle while KAT wins a title in New York, or Luka Doncic in L.A., now betting on Austin Reaves, Walker Kessler and Colin Sexton. Jayson Tatum and the Celtics should be very good next year, but depending on how many games Paul George misses, he may belong in this category too. It’s not that you can’t build around max players, but there’s almost no margin for error and contending with the same core year after year looks increasingly impossible. For the NBA, this looks like pretty bad business: the current system takes the most marketable players the league has and makes it twice as difficult to build sustainable, title contending teams around them.
Third, basketball is not football. The season is eight months long and the games all blend together. Even this year, apart from the Western Conference Finals and the Finals, the playoffs were pretty underwhelming. So what do we remember and what will we always watch? Great teams and great players; Wemby vs. the Knicks in the Finals was so good that no one even cares that most of the playoffs sucked. That’s what resonates with the entire country. The league should be leaning into that formula by making it easier for big markets to spend and succeed and drive everyone crazy, and making it easier for small markets to draft well, keep their players, and dominate for years that way. No one wants to argue against NFL-style parity, but for the NBA, it’s the wrong model.
Silver’s regime has created a league where 15-20 teams are pretty good, a few are really good, and almost none of them are differentiated from one another or historically distinct in any meaningful way. The Knicks and Spurs captivated the whole world, yes, but last year’s Pacers-Thunder Finals very much did not.
For people who love basketball, this status quo is not necessarily a deal-breaker. But I also enjoy it when normie friends pay attention and want to talk basketball with me, and for a league that’s looking to remain a cultural tentpole, all of this is suboptimal. The Players Association’s complaints about the current environment are not terribly coherent, but if I were repping the players, the concern I’d express (privately) is that systematically handicapping the best players and teams will ultimately make basketball less culturally resonant and less essential for network partners, and everyone will make less money in the long run.
Again, we have no idea what the rights landscape will look like in 10 years, but I’d suggest we all leave room for the possibility that the second apron is bad for basketball reasons and business reasons alike. It’s easy to imagine there will be fewer rights bidders by the 2030s and less leverage for the league when it’s time to renegotiate its current deals. In that moment, it would be really nice to point to a rock star dynasty like 90s Bulls or the 2010s Warriors, or a superstar like LeBron James who’s in the Finals every single year. The current system is designed to prevent those outcomes, and as Silver said, “the system is working incredibly well.”
The NBA would surely call any of that hand-wringing crazy on the heels of the best Finals ratings in 28 years (and a delightful two weeks that I had a great time writing about), so fine, let’s stick with this year’s success: tens of millions of fans fell in love with the Knicks during the Finals. Why create a system that makes it financially and competitively insane for them to bring back Mitchell Robinson? Is the league any better off with Robinson in Boston? Should the Knicks be permanently hamstrung if they pay Jalen Brunson every last dollar when he opts out in 2028? And what does it say about the second apron era that its greatest success story was only possible because of a superstar like Brunson who took less money? How often can the league count on that sort of aberrant behavior working in its favor?
Last year’s outcomes aside, this is a foolish way to run the league. Silver is following the wrong north star. The NFL is a powerhouse that benefits from scarcity (one game a week, five months a year) and a flawless television product that’s deeply ingrained in American culture. That league sells itself, and I think it’s a mistake to point to parity as the explanation for its popularity. And either way, what’s germane here is that the NBA doesn’t sell itself. Self-described basketball fans tune out for the entire regular season.
If the goal is to retain attention, great stories matter more than equal opportunity for 30 markets. Iconic teams, great players, and familiar characters provide an entry point for the whole world. Rather than aping the formula of a business with completely different strengths, the NBA should be leaning into strengths of its own and betting on the kind of superstars and dynasties that only pro basketball can produce. As it stands now, the league’s structure guarantees that its best teams will look meaningfully disfigured within a year or two of achieving any real playoff success, while more than half the generation’s best players look desperate for just one single role player who can play defense and hit threes and happens to be available for the taxpayer midlevel exception.
Maybe the NBA will continue to draw big national audiences despite those constraints. Fans will learn to root for chaos and fall in love with brand new stories every year. That’s Silver’s bet, and while there’s a chance all this will be overhauled when the CBA is up for renegotiation in three years, the league sounds pretty happy with the system as it’s working today. It may take 10 years to determine whether any of this costs them.
July Reading Recommendations
I’m going to be out the next two Fridays because of personal travel next week and then work travel the following week. Before I go, here are a few recs and stories I’ve found interesting over the past week or so. As always, thank you for reading and subscribing. I’ll see you in August.
- Following up on the end of last week’s Sharp Tech, I thoroughly enjoyed this: Permanent Daylight Saving Time Is the Perfect Stupid Idea for Our Stupid Time.
- At the very end of this week’s Sharp Tech, Ben had a long soliloquy about the dangers of credentialism and the loss of a frontier mentality throughout American life, and I was reminded that Tom Wolfe writing on the life of Bob Noyce is one of my favorite pieces of journalism ever (that I discovered thanks to a Sharp Tech listener a few years ago).
- The World Cup is over, and while I have no deep thoughts to share after three weeks of me mostly enjoying soccer, my former podcast partner Ben Golliver sent me a story last week on the history of the England-Argentina rivalry. From ESPN, this was a great ride from start to finish.
- Speaking of Argentina, after their disgraceful performance against Spain in the final, I came across Martin Amis writing about Diego Maradona in the Guardian 20 years ago. Amis clearly has a soft spot for Maradona, as all sports fans should. Also, the fourth paragraph in that essay is a delight.
- We mentioned G42 in passing on Sharp China a few weeks ago, and a few days later the Wall Street Journal dropped this fantastic story on the company and its journey into the good graces of the United States government. So: Did the U.S. use CIA station chief Johnny Gannon to get the U.A.E.’s AI national champion onsides with respect to China, or did the U.A.E. use favors, lobbying and various forms of geopolitical leverage to coerce the U.S. into a more cooperative stance despite ongoing concerns about the U.A.E., G42 and their China vulnerabilities? The Journal provides no definitive answer, but it’s a good window into the stakes of these questions. I’m also curious whether there have been any other security and China-related commitments from the U.A.E. in exchange for chip access, treasury relief and the U.S.-led efforts to throttle Iran and stabilize the region—a question that looms over the story and remains murky.
- Xi Jinping made global headlines last week as he exhorted the world to “adhere to the principle of openness” in the age of AI. The treatment of New York Times reporter Vivian Wang, as well as many other foreign journalists, is a useful data point to keep in mind alongside that messaging (the Party is also, predictably, considering locking down AI openness).
- Mercedes has been getting crushed all week for its brazen attempts to water down U.S. legislation on Chinese software and hardware in cars. I didn’t realize until this whole affair that Mercedes is nearly 20% Chinese owned, and to be fair to Mercedes and its lobbying team, the legislation that advanced in the Senate this week would force the company to restructure its ownership or risk a ban in the U.S. Regardless, between its ownership and its dependence on the China’s export market, that company’s lobbying against EU-China measures now makes a bit more sense. I’ll revisit the Europe-China question sometime in the near future; while not much has changed since I wrote about the situation in June, the problems are not going away. Deeply compromised actors like Mercedes and Volkswagen are very much part of the story.
- Greatest of All Talk received an offseason question about dinosaurs that we will be answering after vacation, but in the meantime I’ll point to this New York Times news brief on the $50 million auction of a T Rex fossil. “Try a bigger bite,” said Phyllis Kao, an auctioneer at Sotheby’s. “It’s a T. rex after all.” First of all, I had no idea that T-Rex fossils were available for purchase on the private market. Second, $50 million is actually a more reasonable price tag than I would have guessed. By comparison, Steve Ballmer spent about $500 million paying Kawhi Leonard and Paul George since 2019; a 12-foot tall Tyrannosaurus Rex fossil is much bigger and at least as healthy as either of them.
Sharp Text is an extension of the Stratechery Plus podcasts Sharp Tech, Greatest of All Talk, and Sharp China. We’ll publish once a week, on Fridays. To subscribe and receive weekly posts via email, click here.