In Minnesota, Mike Conley’s latest deal is worth the cost of a possible luxury tax payment.
After everyone had departed Indianapolis on Monday, the most significant long-term development of NBA All-Star Weekend occurred when ESPN’s Adrian Wojnarowski revealed that point guard Mike Conley and the Minnesota Timberwolves had reached an agreement on a two-year, $21 million contract extension. A long-term worry accompanied the Timberwolves’ thrilling ascent to the top of the Western Conference: would Minnesota be able to pay to hold this core together?
After finishing 11th in the NBA this season, the Timberwolves’ payroll is expected to rise sharply with the extensions for Anthony Edwards, Jaden McDaniels, and Karl-Anthony Towns, which will increase their salary starting in the next season. Minnesota’s proximity to the NBA’s second luxury tax area, along with Conley, makes it a challenge to navigate the tax and the CBA’s constraints on high-spending clubs. However, Minnesota has won big by signing a veteran leader for less money than other teams could have paid by utilizing the non-taxpayer midlevel exemption.
Conley’s potential to become an unrestricted free agent was one of the biggest variables for the Timberwolves. Now, Minnesota can realistically hope to keep the group that has fit together so well this season for another run in 2024-25.
With both Edwards and Towns signing extensions that pay those two All-Stars a percentage of the 2024-25 salary cap, we don’t yet know Minnesota’s exact salary figures. Based on the current projection of a $141 million cap, Towns’ contract will start at $49.35 million (35% of the cap) and Edwards at $35.25 million (25%).
Including Conley’s extension, that would give the Timberwolves $184.2 million in guaranteed salary for 2024-25 with just nine players under contract, a figure that’s already approaching the projected second apron of $190 million.
There’s still one crucial wild card for Minnesota: whether Edwards makes All-NBA, in which case he’d qualify to increase his starting salary to 30% of the cap ($42.3 million). In that scenario, the Timberwolves would exceed the second apron before even filling out their roster.
To some extent, the new restrictions may not affect Minnesota as much as other teams. With their starting five under contract, the Timberwolves won’t necessarily look to aggregate salaries via trade and aren’t a frequent destination for buyout candidates.
In an older arena in a midsize market, the bigger issue for Minnesota will likely be the tax itself. Let’s say that Edwards misses All-NBA and the Timberwolves keep their first-round pick before filling out the roster with minimum-salary players in place of their current free agents. In that case, Minnesota would be looking at a projected tax bill of about $60 million. Any additional salary would increase that at a rate of 3.25 times the salary.
The Timberwolves have paid the tax just once since 2006-07. In 2019-20, when Minnesota was unable to reach a buyout after adding payroll by dealing for D’Angelo Russell at the deadline, the team ended up paying about $500,000 in tax. The Timberwolves last paid more than $1 million in 2003-04 — the only time in franchise history they’ve won a playoff series.
