Issue 12 - How Will OKC Manage its Cap?

cash rules everything around me

Hey everyone — I’m back with another issue of Ankit’s Cool OKC Thunder Newsletter as part of my summer renaissance. And this is maybe the edition I’m most excited for yet! If you are unfamiliar with the new CBA or the Second Apron — I would recommend reading my previous issue: The New CBA for Dummies.

Here’s a quick recap of what the Thunder have done the last few weeks:

• Won the NBA Championship 🏆

• Aaron Wiggins gave the speech of a lifetime

• Extended Shai Gilgeous-Alexander to a $285mi/4y deal

• Extended Jalen Williams to a $240mil/5y rookie supermax extension

• Extended Chet Holmgren to a $240mil/5y rookie extension¹

• Declined Jaylin Williams’ team option and extended him to a $24mil/3y extension

• Declined Ajay Mitchell’s team option and extended him to a $8.7mil/3y extension

• Drafted Thomas Sorber (pick #15) and Brooks Barnhizer (pick #44, two-way)

• Traded Dillon Jones to the Wizards. Goodbye to the Permanent Sub

Moving on to the topic du jour: OKC’s Salary Cap management! NBA Cap Management has been one of my guilty pleasures for a number of years now and is actually one of the biggest reasons why I decided to start this newsletter in the first place. It got too annoying trying to describe a somewhat complicated vision for an NBA team over tweets or text messages — so now I’ll have all my thoughts in one nice and tidy newsletter that I can force random people on the internet to read!

What’s crazy about this is that I actually tried to write this 2 years ago in the Summer of 2023 but I ended up scrapping that draft because I didn’t feel like I knew what this team actually needed to do to win a championship. Kinda funny, now that we’re here haha.

In this issue, we’ll focus on questions like:

• “How do we pay Shai, Chet and JDub max contracts?”

• “How do we keep any semblance of depth on the roster?”

• “How do we maximize our championship window?”

• “What is the Second Apron and how will it not eat my face off?”

Constraints

There are a few constraints by which I believe Sam Presti and the Thunder will want to operate under. Some of these will be applicable to other teams! But every team has different philosophies and resources.

1. It’s imperative that OKC stays out of The Second Apron as much as possible — but especially: stay out of the Second Apron for 2 years within a 4 year window. I write about the challenges of the Second Apron here. But the tl;dr is: we can’t jeopardize flexibility around our future draft picks (the other penalties around trades and stuff, doesn’t matter as much to OKC).

2. A nice thing to plan around would be to make sure we avoid the Repeater Tax. A team enters the Repeater Tax by being in the Luxury Tax for 3 years in a 4 year window. I wouldn’t say it’s a deal breaker if we were forced to not abide by this — hence why I call it a “nice to have”.

3. This last point is not quite a necessity, but for the sake of completion we will assume that we will roster 15 players at all times. This just makes it easier for me to visualize the worst case scenario in terms of money spent. Any open roster spots, I’ll replace with a $3,000,000 placeholder to serve as a “vet minimum” and give some wiggle room in my calculations.

I’m going to assume that the cap will increase 10% a year ad nauseam. This does not happen every year (including what happened for 24-25 -> 25-26) but is pretty likely (if not close) to what will happen. It’s just to keep things simple. It doesn’t make that much of a difference in the next few years (less then $2m per year) or change the point that I’m trying to make.

Draft Picks

A quick pit stop before we get to the more interesting stuff. It wouldn’t be a discussion about the OKC Thunder without a nice look at the draft pick war chest!

Here’s what we have at this point:

• OKC owns all of its draft picks from 2026-2031+

• 2026 HOU - top 4 protected (converts to 2nd round pick if it doesn't convey)

• 2026 LAC - unprotected

• 2026 PHI - top 4 protected (rolls over to 2027 if it doesn’t convey)

• 2026 UTA - top 8 protected

• 2027 LAC pick swap

• 2027 DEN - top 5 protected (rolls over to 2028+2029 if it doesn’t convey)

• 2027 SAS - top 16 protected (converts to 2 second round picks if it doesn’t convey)

• 2028 DAL pick swap

• 2029 DEN - top 5 protected (rolls over to 2029+2030 if it doesn’t convey)

• And a bunch of 2nd round picks

The bolded draft picks are the ones that I think have a lot of juice to them, but who knows how lucky we’ll get.

We’ll use these draft picks to do a couple of things:

1. Supplanting and replacing depth pieces.

2. Use draft picks to incentivize other teams to take on contracts we don’t want

3. And lastly, we’ll continue to trade draft picks in the present for draft picks in the future with more upside so that we’re never strapped for roster space. The roster crunch has been a major topic of discussion among non-Thunder circles, and it has never been an issue. These picks will be saved for a later date when we might need to use them.

Current State of OKC contracts

I would encourage you to take a peek at the Multi-Year View of OKC’s Contracts from the good folks at Spotrac. Most (if not all) of the current numbers I pull from there, and I will defer to them in case any of these numbers magically change. ²

Some of the key things to note with OKC’s current contracts are the following:

• Cason Wallace’s rookie deal expires at the end of the 26-27 season.

• Lu Dort’s contract has a guaranteed season for 25-26 and a team option for 26-27

• Isaiah Hartenstein, similar to Dort, has a guaranteed season for 25-26 and a team option for 26-27.

• A bunch of team options in 27-28

The rest of contracts don’t really matter that much for what we’re gonna dive into, but obviously — they exist.

Path Forward

The Spreadsheet

OKC’s cap sheet with my predictions in green.

If you’re interested in messing around with this spreadsheet yourself — here’s a link the spreadsheet shown above. Feel free to make a copy and go crazy. I’d love to see what predictions you guys come up with.

There’s a key for what the colors mean in the top right corner. All penalties are calculated formulaically based on the salaries for each player. Penalties are the negative numbers in the orange cells in the bottom section. Please note that my predictions are denoted in the green cells.

If there’s anything wrong or weird about it — feel free to let me know and I can try to fix the template. I’m not a spreadsheet wizard by any means, but I can try my best. 🙂

Predicted Contracts

• Lu Dort extension starting in 27-28 after his team option in 26-27 is accepted. $75mil over 5y at a flat $15m/year

  • We could decline the 26-27 option to give the Thunder the option to extend Dort earlier. This is similar to what the Thunder already did when signing him to the contract he is currently on. This would basically be a way to provide more security earlier to Dort in exchange for lower annual payments. It’s hard to say if this is a likely possibility, but Presti loves to do this (Dort, Wiggins, Joe, Mitchell and JayWill have all had this happen).

• Cason Wallace extension starting in 27-28 after his rookie deal options are accepted in 25-26 and 26-27. $110mil over 5y at a flat $22m/year

• Ousmane Dieng more than likely will not have his contract renewed with OKC next summer (if not traded sooner). I expect Brooks Barnhizer to have his two-way deal converted to take his roster spot. I’m not sure when that will happen, so the Vet Minimum Placeholder will over-estimate Barnhizer’s wages through 26-27.

These numbers are not meant to be exact predictions, and the point of this exercise is to have a ballpark idea of what the cap sheet might look like and what options the Thunder have at their disposal. With that said, I do believe these are pretty reasonable, roughly fair market value for all of these players.

Second Apron + Constraints and Cap Casualties

So this is where we get into the real meat and bones of what I want to talk about. Everything before this point was to set the groundwork for some of the (somewhat tough) choices that OKC will have to make.

Repeater Tax

I’ll start with the easiest constraint: the Repeater Tax. As I mentioned before, a team enters the Repeater Tax by being in the Luxury Tax for 3 years in a 4 year window. As you’ll notice, OKC will be paying the Luxury Tax 26-27, 27-28 and 28-29 which would mean that that would enter the Repeater Tax penalty in 29-30. Sam Presti alludes to this in his 2025 Offseason Presser.

This coincides with the Current CBA’s opt out clause in the Summer of 2029. Basically, if the teams in the NBA decide that they want to opt out, it’s unclear what the actual penalty becomes since the rules can (and probably will) change here. I’d imagine some kind of repeater penalty to continue, but it’s unclear how punitive (more or less) it will be.

With that said, OKC ownership has shelled out tens of millions of dollars for teams way worse than the current iteration of the Thunder so I have no worries about them paying the tax assuming the team continues to deliver results (strong regular season results and deep playoff runs). The era of penny pinching around James Harden’s contract ended when the ownership group added some very wealthy people to their group in ~2014. The Luxury Tax spending of the Thunder has ballooned since then.

And as a final point, you honestly shouldn’t really care about the Repeater Tax because OKC ownership has a bunch of billionaires making a ton of money hand over fist through the Thunder and their other ventures. There’s always money in the banana stand.

tl;dr: With that said, it seems we aren’t running into trouble with the Repeater Tax, but will pay the normal Luxury Tax for a few years.

The Second Apron

This is the major constraint by which I believe the Thunder have to be judicious about their spending. It sounds very scary and a lot of people online make it out to be a boogeyman of sorts — and yeah it makes things difficult, but with good planning, foresight and a little bit of luck, it seems more than manageable in my eyes.

What immediately sticks out with respect to the Second Apron is that we exceed the 2nd apron for the first time in 26-27 by $22,828,750 and then again in 27-28 by $21,598,218, thus incurring the strictest penalties around future draft picks. These numbers seem pretty big (and they are to normal people with normal jobs) but a $20-25 million dollar contract in today’s NBA is roughly equivalent to a solid NBA starter. This leads me to see a couple paths forward:

Option 1: Keep Hartenstein in 2026-2027 and shed depth in 2027-2028

This option would mean that the Thunder pick up Hartenstein’s team option for 26-27 and bring back every core player of the 24-25 championship-winning squad for a 3rd consecutive season. I believe this team with Hartenstein is likely the best option to win a title again, and we have the fortunate opportunity to bring it back for not just one but two more playoff runs.

However, all good things come to an end, and the second apron will become a problem in 27-28 as we enter it for the 2nd time in 2 years. As a result, we will have to not re-sign Hartenstein and move off an additional ~$24,000,000 in salary. This would mean salary dumping Caruso AND something like not picking up the options of both Jaylin Williams ($7.74 mil) and Kenrich Williams ($7.2 mil).

JayWill and Kenrich are somewhat expendable given that they are effectively 3rd string players on the Thunder — and potentially may be cap casualties anyway.

I tried to see if there was a way to keep Caruso and shed a bunch of tertiary depth — but the numbers didn’t quite work unless you started to consider trading players like Dort (non-negotiable for me) or Topic/Wiggins/Mitchell (doesn’t make sense to move on from a cost controlled contract earlier than needed).

Aside from losing many key depth pieces, we’d also lose the ability to have tradable salaries in 27-28 if we were to go through with some kind of trade. I think this option is the less likely of the two — bordering on impossible.

Hartenstein’s deal naturally expires in Summer 27. We also move off Caruso, Kenrich and JayWill in the example above.

Option 2: Decline Hartenstein’s team option in 2026-27

The most realistic option in my head is to simply not pick up Hartenstein’s $28,500,000 team option in 26-27. The Thunder need to reduce their salary by $23,289,662 and declining Hartenstein’s team option, the Thunder would end up being ~$6,000,000 under the Second Apron.

Hartenstein has been a tremendous player for the Thunder in the lone season he’s played, and it says a lot that I very begrudgingly think this is the best option forward. The Thunder have come to appreciate the physical, bruising style that he brings either as the lone center to back up Chet or alongside Chet in a double big lineup. However, Daigneault has shown time and time again that he is not afraid to switch up lineups based on a matchup and loves to have the added flexibility in lineups.

Sam Presti has very obviously been planning to prepare for a world without Hartenstein. Jaylin Williams has been a pretty reliable backup big for 2 seasons now, and his recent extension through 27-28 gives the Thunder some options to replace some of the things that Hartenstein brought to the table. On top of that, the Thunder just used the #15 pick in the 2025 draft to select Thomas Sorber. I talk about him briefly in my recent Draft Day Issue. It’s awfully convenient that Sorber projected to be a Isaiah Hartenstein type player and the Thunder would be finding an Isaiah Hartenstein sized hole on their roster. Even in an optimistic world, Sorber probably won’t be as good as Isaiah Hartenstein. But if he could give the Thunder 60-70% of that, the added development from the rest of the roster (especially Chet Holmgren) could be enough to offset the missed production and skill from Hartenstein.

This option very simply keeps the entire team together from 2024-2025, through 25-26, 26-27, and 27-28 minus Isaiah Hartenstein.

And for those of you who are curious — this option brings our tax bill from ~$175,668,813 to ~$39,835,133 in 26-27. OKC would have a tax bill of ~$167,340,838 in 27-28 with many options to trim that bill by declining some team options (but again, don’t stress about this lol).

OKC’s cap sheet by simply declining Hartenstein’s team option in 26-27.

Option 3: Decline and sign Isaiah Hartenstein

There is also the option for Presti to decline Hartenstein’s option and extend him on a lower annual value. It’s difficult to predict what the numbers look like — but Sam has done this for a bunch of players in recent years including: Dort, Wiggins, Joe and Mitchell.

If this were to happen, it’s kind of a hybrid of the previous two options and would require letting some depth pieces (like Kenrich or Joe) go alongside reducing the value of Hartenstein’s annual cap hit. Hartenstein has shown that he is a fantastic player with a ton of value, so I imagine his value on the market would be considerable and I’m not sure if he would be willing to take the kind of pay cut necessary to keep him on OKC. I wouldn’t hold your breath, but this is an option!

What Happens Next?

Ok, so let’s say we picked one of the options above (probably option 2). What do we do when we get to the 28-29 season when we find that we’ll only have 8 players under contract while having only $7mil before we’re in the Second Apron again?

At this point, it’s honestly hard to predict what the right thing to do, but one obvious and likely move is to salary dump Alex Caruso and his $22.5mil contract in the summer of 2028. He’ll be 34 years old and in the last year of his deal. It wouldn’t be surprising to see his health and level of play fall off a bit (as is natural for players in their mid 30s) so it could make sense on both a basketball and financial level.

This move would free up ~$30,000,000 in cap space to fill out 6-7 more spots. You’re not gonna get high end role players like we did with Hartenstein and Caruso in 2024, but you’ll get a couple of solid players and hopefully be able to keep the train going. This is also ignoring any re-signings and draft picks we make in 2026 or 2027 who can fill in as depth pieces going forward as well. I would expect a good chunk of these roster spots to be filled by drafted depth going forward.

Last Thoughts on the Second Apron

Very few championship teams are able to run their whole squad back for a second run, and even fewer have the opportunity to do it for a 3rd or even 4th season. Eventually, this team will lose some parts — whether that’s for financial or performance related reasons. That is inevitable with every great team. But the fact that we’re able to delay it for so long and have the opportunity to have so many bites at the apple is unique and difficult to do.

I’ll add that the current CBA has an opt-out in the Summer of 2029. That means that the rules of engagement are once again subject to change, and planning too far beyond that could potentially mean committing to decisions that are no longer beneficial in the new post 2029 CBA world.

I wouldn’t really stress too much about all the question marks on the roster 4 years into the future. A lot can happen in that time. You might even go from being the 4th worst team in the league to winning the championship 🙂

Conclusion

And that, my friends is how I think OKC will manage their cap. I don’t think I said anything too crazy, though there are a lot of mechanics that make this a little convoluted. I expect the Thunder to be able to contend for championships for the next ~2 years (assuming good health) and hopefully a bit longer with some luck before doing some re-shuffling in time for the 2029/2030 CBA.

Let me know what you guys think! You can find me at most places on the internet as @ankitpancakes. Here are links to some of those places: Twitter and Bluesky.

Works Cited

This time, my works cited is pretty short!

• Spotrac

• NBA Luxury Tax Calculator

• The New CBA for Dummies by Me

• My brain 🧠

1. Chet has a ~1% escalator clause if he meets the criteria for the Rose Rule. This is slightly less than what JDub’s 5% if he met the same criteria.

2. Some of their numbers around what the tax level, first apron and second apron are differ because they make more pessimistic assumptions on future cap growth of ~5%. This feels low given recent history.