The Hero of New York: Breaking Down Jalen Brunson’s Contract

Image via @jalenbrunson1

It’s no secret: Jalen Brunson is currently the most loved man in New York. He’s currently leading a New York Knicks franchise that hasn’t reached the Eastern Conference Finals since 2000. Not only does he have the opportunity to become New York City's Batman by dealing vengeance to the Indiana Pacers, who eliminated them in the conference finals in 2000––but also by leading the team to its first modern-day NBA Finals appearance since 1973. His on-court heroic presence and play have propelled this team to a contending level, but some could argue his most heroic action for this team came off the court. 

For those not familiar or for those who need a refresher: In July 2022, Jalen Brunson signed a four-year, $104 million contract, followed by a four-year, $156.5 million extension in July 2024. The breakdown of this extension (starting in the 2025-2026 season) is as follows: 

• $34.9 million in the first year

• $37.7 million in the second

• $40 million in the third

• With a player option for the fourth year at $43.3 million.

At first glance, Brunson is being paid handsomely, but he had the option to wait until he became a free agent in 2025 and resign with the Knicks for a much more lucrative deal. If he had waited––as most stars do––he would have been eligible for a five-year max contract that would have been estimated around $269.5 million. This figure is based on the NBA’s Collective Bargaining Agreement (CBA) which states that a 7-9 year tenured player is eligible for a contract worth 35% of a team’s salary cap if they meet certain performance requirements (in Brunson’s case, making All-NBA twice). Other factors that influence this figure are the 8% annual contract raises that would most likely be instated in his contract, as well as expected salary cap growth.

Jalen Brunson is well-regarded as a solidified top 5 point guard in the entire NBA. Without a doubt, he is a superstar, but his salary shows one more reflective of a key role player. For reference, the 5 point guards with the highest annual salaries––Steph Curry, Damian Lillard, Luka Doncic, Trae Young, and Fred VanVleet––make on average $46.7 million; almost double of what Brunson makes at $24.9 million. Brunson currently ranks 65th on the list of highest player salaries, between Johnathan Isaac and Terry Rozier (both respected players but not superstars like Brunson). This goes to show you how significant of a pay cut the New York star opted into.

Essentially, Jalen Brunson gave up about $113 million to provide the Knicks' front office with more roster flexibility and financial savings. In a league where players tend to be more money-oriented and player-first minded, Brunson made a heroic move that allowed himself and the Knicks organization to truly prioritize winning. From this action, the Knicks were able to extend OG Anunoby and trade for former Villanova teammate Mikal Bridges––who has played quite well throughout this playoff run, including two major stops to help win in games 1 and 2 against the defending champs: the Boston Celtics. Brunson’s pay cut didn’t directly lead to the acquisition of star Karl Anthony-Towns but it certainly has an overall cumulative effect on building and financially sustaining a championship roster that will more than likely include Anthony-Towns.

To dive deeper into this ability to sustain a winning roster it ties into the NBA’s Salary Cap System. The NBA uses a “soft cap” system, allowing teams to exceed the salary cap through exceptions granted in the CBA, but with increasing penalties and restrictions as spending increases.

Currently for the 2025-2026 season the NBA salary cap is set at $154.6 million. Teams that exceed the salary cap using exceptions can spend without penalties up until the luxury tax line which is set at $187.9 million. Spending past the luxury tax line results in a $1.50 penalty for every dollar over the line spent (and harsher multipliers for repeat offenders).

Once teams spend around $6 million above the luxury tax line, they enter the “first apron”—set at $195.9 million for the 2025–2026 season. Teams in this category face limited trade flexibility and cannot use standard exceptions to sign players without triggering a hard cap at the first apron.

One of the most impactful changes to the Salary Cap system is the CBA’s introduction of another luxury tax line in the 2023-2024 season––the “second apron”––which is set at $207.8 million for the 2025-2026 season. This is another soft cap, where teams can spend over this figure but not without painful restrictions including: no sign-and-trades, no access to mid-level exception, no aggregating salaries in trades, no trading for players making more money than you send out, and future first round picks become frozen and moved to the end of the round.

As you can see, it is crucial for NBA front offices to effectively spend to avoid the penalties and restrictions that come with exceeding the salary cap. The Knicks are currently in the first apron, and if Brunson had pursued the payday, it likely would have pushed the organization into the second apron depending on how the rest of the roster was structured. He made a choice that allowed the team to balance its financial structure and team success to its best ability. Truly noble.

If the New York Knicks win the championship, a number of storylines around Jalen Brunson, KAT, the “Villanova Knicks”, and the franchise as a whole will be birthed but a striking question remains: will Jalen Brunson start a movement around the NBA for stars to take major pay cuts to build stronger teams? Aside from the admirable character qualities it shows on players as individuals, it creates a better NBA environment that fosters winning mentality, reduces financial stresses in front offices, and gives fans a greater feeling of excitement seeing their squads being bolstered because of the additional cap space to bring in key pieces. Not to mention, if a star takes a pay cut and wins a championship as a result of a stronger roster, their marketability would likely soar––leading to increased endorsement opportunities and, ultimately, more income to offset the salary sacrifice. In the bigger picture, strategic pay cuts by stars could set a precedent that benefits the entire league—promoting competitive balance, deepening team rosters, and enhancing the overall quality and excitement of the NBA.