Where the Knicks’ cap situation sits two days into free agency

Barring a trade, most of the action is behind the Knicks.

NBA free agency is unique.

In the MLB, it’s very rare to see the top players on the market make a decision in the first month of free agency, with several notable cases of players dragging their decisions deep into spring training in February and March.

In the NFL, while a lot of action happens early, many players take the process slowly. In the 2025 free agent class, to name two recent examples, the decisions of Russell Wilson and Aaron Rodgers dragged out for weeks.

In the NHL, whose free agency runs concurrently with the NBA’s, there’s also a ton of early action, but not serious urgency.

NBA free agency, however, has a reputation for being immediate and a legitimate spectacle. The minute that 6 p.m. strikes on June 30 every year, millions of NBA fans turn on post notifications from Adrian Wojnarowski then, and Shams Charania now. Players usually begin signing in the first few minutes, stars agree to massive deals within hours, and the vast majority of talent available is off the board within two days. Deals aren’t even official until the 6th, and the board looks like this:

Some teams have been super aggressive, while others have been passive. The Knicks, while not super aggressive, seem to have already completed a big chunk of their business. On paper, this could’ve unfolded disastrously.

Several Knicks’ targets signed for more than what the team could’ve offered. Luke Kennard got $11 million for one year, Tyus Jones signed for $7 million, and several dream targets like Caris LeVert and Dennis Schroder, who were anticipated to sign for more but could’ve fallen through, got $14 million per year. The guys signing in the Knicks’ realistic range? Paul Reed and Jake LaRavia. Not great!

But when news came out Monday afternoon of Jordan Clarkson being bought out by the Utah Jazz, the Knicks were immediately linked as a fit. While his erratic play had drawn the ire of Mike Breen in the past, he fills a big need as a ball handler who can provide scoring off the bench. While not official yet, it’s anticipated he clears waivers on Wednesday and signs a veteran minimum with the Knicks.

Signing Clarkson to a veteran minimum kept the taxpayer mid-level exception open, but it was questionable what the Knicks could manage to afford it, as guys like Tre Mann and Tre Jones inked deals over the TPMLE.

Fortunately for the Knicks, they managed to agree to terms with a guy that fits them perfectly in Guerschon Yabusele, sniping him from Philadelphia on a two-year deal worth just under $12 million.

Yabusele adds size, shooting, and rebounding. He takes Precious Achiuwa’s roster spot and is a tremendous offensive upgrade despite being a worse defender. With his addition, the Knicks had a bonafide nine-man rotation set up that does not include relying on any unproven young players and has a lot of flexibility.

Ultimately, at the surface, the Knicks hit a home run. Yabusele and Clarkson will run a cap hit of just under $8 million in 2025-26, which is less than the cap hits of guys like Sam Merrill, the aforementioned Tre Mann and Tre Jones, Luke Kennard, Brook Lopez, and… Duncan Robinson? Really Detroit?

To get two bonafide rotation players who can not only contribute but be key pieces on a contender with less money to spend than almost everyone is an incredible job by Leon Rose. And, to do it without a head coach (though that may be solved soon)? Incredible work.

Now, what’s next for the Knicks? Well, after a look at SalarySwish, the Knicks don’t have much room left.

SalaySwish counts Dink Pate’s Exhibit-10 contract against the cap, which won’t factor into the current cap calculus. Taking that off, the Knicks figure to have $3.53 million left beneath the second apron, assuming both signings have accurate monetary estimates. While the Knicks probably did not want to encroach on the dreaded second apron, they physically cannot anymore. The signing of Yabusele with the TPMLE officially hard-caps them at the second apron for the second consecutive season.

$3.53 million is technically less than what Clarkson will make in 2025-26, but the NBA sets all vet min cap hits at about $2.3 million to not discourage teams from signing season veterans.

The important number for the Knicks is 14. That’s how many players need to be on the active roster on Opening Night. After their signings, they sit at 12. With two spots to go and not enough room for two vet mins, are they in trouble?

Not precisely. The Knicks may have backed themselves into a corner, but they do have a safety valve in the form of the second-round exception. A new feature in the 2023 CBA, the second round exception, incentivizes teams to ink second-rounders to standard contracts by incentivizing them with smaller cap hits. While Pate cannot be signed with one, the Knicks are able to give them out to No. 51 pick Mohamed Diawara, restricted free agent Kevin McCullar Jr., and Eurostash James Nnaji. A three-year deal for one of those three permits the Knicks to roster them with a Year 1 salary of a measly $1.27 million, just over half of the vet min.

Now, the Knicks could still sign a player to the veteran minimum, but they’d need something unforeseen. Yabusele’s contract is not official until July 6, so the exact terms are unknown and unrevealed. If Yabusele signed to the full TPMLE, the Knicks would not be able to sign another vet min without triggering the hard cap. However, if Yabusele’s 2025-26 salary was about $50,000 less, they’d be able to squeeze one more veteran with a rookie on the second round exception.

The most likely outcome for filling the last two roster spots, however, is through a pair of second-round exceptions. I’m not totally convinced that Diawara will get a standard contract right away, so that leaves McCullar Jr. and Nnaji. Nnaji could provide emergency depth at center with the injuries that are likely to come about with Karl-Anthony Towns, Mitchell Robinson, and Ariel Hukporti. McCullar being tendered a qualifying offer implies that he will be one of the players rostered.

Going this path would give the Knicks flexibility as the season begins. It would leave them with about $1.08 million in space below the hard cap. Like last season, the Knicks would be able to add a 15th player to their roster midseason, but would be able to sign him as early as January 15th, firmly before the buyout market begins.

There’s also the possibility of a trade to open up more flexibility to add more veteran depth, but the Knicks would not be able to sign any player for over the vet min, so it would not be worth it for the sake of current flexibility. However, if certain players don’t extend, they might make a move for future flexibility.