Karl-Anthony Towns (KAT) has been at the center of trade buzz again this NBA season, and it’s not just backboard chatter, league sources report the New York Knicks have discussed potential Towns deals with the Grizzlies, Magic, and Hornets as the deadline looms, fueled by under-performance, cap constraints, and strategic reset whispers.
With New York’s roster carrying multiple max contracts and strict apron considerations, the payoff of a move and the cost of sticking, is at the forefront of front office calculus.
KAT has been a star forward in both Minnesota and New York, but has failed to help either team get over their championship hopes hill.
New York has reportedly stated that they are not shopping Towns, however if the right comes in that they cannot refuse, its likely KAT will be joining a new team by the end of the deadline, if not for sure in free agency this upcoming summer.
Contract Breakdown
(Current Deal: 2024–2028)
- Total Value: ≈ $220.4M (fully guaranteed)
- Length: 4 years (2024–28)
- Guaranteed Money: 100% ($220.4 million)
- Signing Bonus: Included in total guarantee (standard for NBA DV deals)
- Base Salary (2025–26): $53.1 million
- AAV: ~$55.1 million
- Player Option: $61.0 million (2027–28)
- Incentives: No incentives publicly disclosed
This is supermax territory, the type of deal that locks in a franchise centerpiece, or becomes a trade headache for years until the conclusion of the deal.
Residency & Market Factors
- Home State: New Jersey (birthplace)
- Current Team Location: New York, NY
- Primary Residence State: Likely NY/NJ
- State Income Tax Impact: New York has some of the highest state/local income taxes in the U.S., cutting deeply into take-home pay compared with lower-tax locales like Florida or Texas. This matters for stars weighing free agency or long-term roots.
Tax difference example:
NY/NJ combined state/local can approach ~10%+, while Florida/Texas = 0%. This can shave millions off yearly net income on a contract like KAT’s.
Taxes, Fees & Expenses
- Federal Tax: ~37% (top bracket)
- NY State Tax: ~6.85% (max)
- NYC Local Tax: ~3.88% (if resident)
- Agent Fees: ~3% (CAA Sports standard fee)
- Estimated Jock Tax: Applies for away states (varies per market)
- Estimated Total Deductions: ~47–50%+ of gross
Even before luxury tax, a $53 million salary can end up closer to $25–27 million net after deductions, another reason contract literacy matters.
Trade Landscape + Landing Spot Possibilities
While nothing is imminent, league executives have repeatedly connected Karl-Anthony Towns to the Grizzlies, Magic, and Hornets as exploratory or framework-level discussions.
These fits aren’t just about basketball, they’re about cap structure, tax positioning, asset inventory, and future window alignment.
Memphis Grizzlies
- Logic: scoring insurance alongside Ja Morant
- Finance logic: Memphis has matching-salary pathways and assets.
- Tax edge: Tennessee has 0% state income tax, meaning if Towns relocates to Memphis, he’s instantly netting more on base salary and incentive triggers, particularly given a ~$55M annual salary slot.
Orlando Magic
- Logic: Orlando’s timeline syncs with Paolo + Franz + Suggs entering prime breakout years.
- Financially: Large cap sheet flexibility + draft capital allows them to absorb elite salary without gutting depth.
- Tax edge: Florida is another 0% state income tax environment, boosting net take-home vs. NY and minimizing jock tax exposure on home dates.
Charlotte Hornets
- Basketball logic: clean fit next to LaMelo as a lead scoring big in a system with space.
- Finance logic: Charlotte has creative cap maneuverability + movable mid-salaries.
- Tax edge: North Carolina has a flat 4.50% state income tax, substantially lower than NY’s ~10.9% top marginal for high earners.
Other Potential Fits
Rumor mills have floated teams like the Bucks, Heat, and Mavericks as opportunistic trade candidates. These typically depend on:
- whether Milwaukee retools and trades Giannis
- whether Miami goes on another star hunt
- whether Dallas wants to add another big alongside Anthony Davis and Kyrie Irving.
None are firm, but financially they matter, Milwaukee/Florida/Texas are low/no income tax environments, which would further amplify net contract value and endorsement leverage.
Cap Context
The Knicks are navigating the upper tax apron and spending constraints, meaning a $53 million+ AAV exit isn’t just a roster swap, it rewires their luxury tax obligations, apron triggers, and the sequencing of 2026-28 flexibility windows.
If Towns Moves:
- The acquiring team inherits a near-max slot through 2027.
- Knicks relieve substantial luxury and repeater tax pressure.
- A multi-team structure becomes more viable, as contenders lack clean matching-salary bandwidth.
Residency & Net Income Implications
If Towns shifts from NY residency to TX/FL residency, the contract’s effective value jumps sharply. At a $55 million salary line:
- NY residency: taxed at ~10.9% state + federal + jock taxes
- TX/FL residency: state tax drops to 0%, and jock taxes primarily hit only away dates
Even with identical gross dollars, that differential can yield multi-million dollar annual net swings, especially when layering in:
- escrow + agent fees
- relocation/tax domicile elections
- endorsement structure (state residency matters for image + NIL/licensing income)
Charlotte is smaller but still meaningful, NC’s ~4.50% flat income tax represents a net upgrade but not a full no-tax uplift.
This is why a Towns move is both a cap story and a geography-based net earnings story, which has become increasingly normal in the NBA star economy (Kyrie to Dallas, Harden to Houston).
Estimated Net Contract Value
- Gross Total (4 years): $220.4 million
- Estimated Net (post tax & fees): ~$110–120 million depending on tax residency, escrow, and state brackets
This is why a contract’s headline value ≠ real money
Financial Outcome
KAT’s situation is the clearest modern example of what elite NBA stars actually navigate beneath the headlines.
The league is no longer just about “$50 million salary” numbers, it’s about the economics behind where those dollars land, who takes a slice, and what that means for mobility and timeline leverage.
- Astronomical Salaries: Towns’ ~$55M AAV isn’t unusual anymore, max money is standardized at the superstar tier. But once salaries cross $45M+, the financial variables multiply. Differences in tax, escrow, and relocation now move real dollars in the seven-to-eight figure range annually.
- State Tax Burden: A max contract in New York is fundamentally different from the same contract in Florida or Texas. For players without legacy wealth or long-term corporate assets, that gap compounds into multi-year millions. Teams now pitch this implicitly during star acquisition windows and have benefited.
- Control vs. Extensions: Extensions give financial security but reduce trade leverage. Towns holds guaranteed years but limited veto mechanisms, meaning he can be moved to environments that boost or erode his net take-home without choosing the destination. That tension is becoming normalized in the post-Supermax era.
- Nominal Dollars vs. Net Economic Value:
“$220M guaranteed” does not equal $220M realized. By the time a contract clears:
- federal tax
- state income tax
- jock tax
- escrow
- agent + union fees
- and relocation/endorsement structuring
the player’s net can compress by 45–60%, depending on jurisdiction. That delta is wide enough to reshape how stars view markets, contenders, and extension logic.
Towns is one of the first max-level cases where the financial geography of the NBA feels as relevant as fit or scheme.
If New York trades him, it won’t just be a basketball story, it’ll be a contract geography and net-economics story that could quietly define the next phase of the NBA star market.
That’s exactly why we wrote the APSM Net Contract Report, to break down:
🔥How taxes erode headline figures
📉Why “$100 million” is actually $35-$55 million
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📊How free agency destinations shape wealth
Want to know what KAT will actually net on his max contract and potential extension?
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Everything you need to understand how multi-million dollar contracts translate into actual wealth and how to avoid financial pitfalls yourself.
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Credits
Author: Aidan Anderson
Research & Analysis: Apostle Sports Media LLC
Sources: ESPN, The Athletic, Spotrac, Sports Business Journal, APSM Proprietary Analysis
Featured Image: Public Domain / Instagram
Disclaimer: This article contains general financial information for educational purposes and does not constitute professional advice.
Apostle Sports Media 