Minnesota Timberwolves face a fraught financial future, but it might be worth it

There are plenty of reasons the Minnesota Timberwolves’ ownership drama creates challenges for the franchise. One of the biggest: Minnesota’s finances are about to dramatically increase.

One of the “good problems” front offices can face is when players are in line for deserved paydays, such as Anthony Edwards’ extension that kicks in for the 2024-25 campaign. A jump from $13.5 million to $35 million-plus is always going to change a franchise’s ledger, and Edwards delivering an All-NBA season pushes his deal to the 30 percent max, which would start at $42.3 million based on the league’s current salary cap projection. There is zero doubt everyone involved is happy to pay the rising star that sum, but it comes at an additional cost because of other obligations the Timberwolves already have.

That starts with Karl-Anthony Towns’ extension, which also kicks in next season. Like Edwards, the big man inked his extension last offseason. That deal also pushes to the top of Minnesota’s salary table even if we do not know the exact number until the NBA finalizes the cap numbers.

Teams can handle having two players at significant salaries without getting to any luxury tax burden, but the Timberwolves have far more than that on their books, with Rudy Gobert getting a big chunk as well. The 2024 Defensive Player of the Year was key to Minnesota’s defense and overall team success, which makes his $42.8 million price tag for next season  easier to take than it would have been after his first season in Minnesota. We won’t know the exact figure for another few months, but the trio of Edwards, Towns and Gobert should make approximately $134.5 million combined next season, $6.5 million below the projected salary cap.

It would be hard to fill out a roster and stay all the way below the luxury tax line with three players at that combined wage, but the Timberwolves also have Jaden McDaniels starting his extension at a reasonable $22.6 million and fellow starter Mike Conley on a team-friendly $10 million deal for the upcoming season. That means the Timberwolves’ starting five could make $167 million next season, just short of the luxury tax line.

Should that matter? Not necessarily for a team that led the Western Conference most of the season before dispatching the reigning champions on its way to the conference finals, and the Timberwolves could be even better moving forward if Edwards and McDaniels continue to improve. Of course, that also depends on another variable central to this conversation: Ownership’s willingness to pay both now and later.

Without retaining their pending free agents, the 2024-25 Timberwolves will be approximately $17 million over the projected tax line for an additional $36.4 million payment and a total player-plus-tax outlay of $226 million. That is both a significant and justifiable sum for one of the best teams in the NBA. That is where the ownership drama matters the most.

Whether to pay the tax and how large of a bill to take on is always an ownership-level decision with a ton of variance. We have already seen mudslinging in the Glen Taylor/Marc Lore/Alex Rodriguez dispute, and this may be a question without a clear answer for the time being.

Some front offices know the tax is a hard line for them. Some, such as the Los Angeles Clippers and Phoenix Suns, see it as a smaller bump in the road. Most teams operate between those two extremes, paying when appropriate but generally staying under. The key questions for the Wolves are which camp they end up in and whether their projected level of success justifies that kind of price tag if the decision is up in the air.

The Wolves must also consider the duration of time they spent over the tax threshold. Right now, Minnesota’s books look very similar in 2025-26 to the 2024-25, except that the cap will likely rise a full 10 percent due to the new national TV deal kicking in. All five starters are already under contract for that season unless Gobert decides to decline his player option. He would theoretically do that to secure a longer commitment, even at a lower annual salary, which would lower Minnesota’s total obligation for that season.

As such, it’s fair to expect the Wolves to be similarly expensive for two seasons before more variance kicks in as Gobert’s and Conley’s current contracts expire. A two-year tax bill seems like a reasonable minimum with the Wolves’ current roster, but a softening from that point is entirely possible.

The Wolves must decide whether they can trim salary without sacrificing team quality, and that is a challenging question in this case. As so few players outside of the starters make large amounts, there are not many options for deals there, so the choices get tough pretty quickly.

Undoubtedly, the most fascinating of those is whether Sixth Man of the Year Naz Reid would be able to step into Towns’ shoes as the starting power forward, and there is an argument that he can. In the stretch Towns missed in March and April, Reid averaged 17 points and seven rebounds on respectable efficiency as a starter. Towns’ disappointing help defense makes replacing him on that end much more manageable, especially with Gobert anchoring the defense. Still, theoretically parting with one of the league’s most intriguing 7-footers is a downgrade and even tougher to swallow for the team and fans alike if it is done primarily for financial reasons. Still, it is a path.

The front office could similarly trim costs by offloading Reid, which would be more about reducing a tax bill than eliminating it entirely, but this season has shown the value in having a viable Towns replacement on the roster. The Timberwolves do not have similar replacements for Gobert, Conley or McDaniels. Hypothetical moves involving them are far more complicated in terms of filling out a credible starting and closing five, especially as many trade partners are less interested in trading like-for-like in these circumstances.

One other note to remember: The NBA does not calculate the luxury tax until the end of the season, so it’s possible to reduce salary in-season rather than during the offseason without having to pay a tax bill on the players you had under contract and later traded. That said, the new collective bargaining agreement’s rules on the salary floor are forcing cap space teams to use a much larger portion of their flexibility before the regular season begins, and one of the ripple effects of that change is that it is much harder to shed salary in-season than it was a few years ago. The pathway to seeing how the 2024-25 campaign goes before adjusting at the deadline is still feasible, but keeping this roster intact and then ducking all the way under the tax appears extremely unlikely.

The best news for the Timberwolves is that the second-best regular season in franchise history and second conference finals appearance puts them in a much better place. It remains to be seen how Taylor or Lore/Rodriguez controlling the franchise fundamentally changes the willingness to spend.

No matter how that part shakes out, the ramifications for the Timberwolves are massive because their bill is coming due, and there are no clear paths to avoiding a significant bill without making their roster materially worse at the wrong time. The front office has a spectacularly tough job to do and likely doesn’t even know its constraints just a few months away from the new league year starting.

(Photo: Anthony Edwards, Karl-Anthony Towns and Rudy Gobert: Tim Nwachukwu / Getty Images)

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