The NBA’s luxury tax and financial limitations have not been concerns of the Memphis Grizzlies in recent years, but that’s not the case this summer.

Memphis has to be much more mindful of its financial situation due to changes in the NBA’s collective bargaining agreement last summer that were made to punish teams for going too far into the luxury tax.

The Grizzlies have a major decision to make on 3-point sharpshooter Luke Kennard’s pending $14.8 million team option by Saturday, but before that, the Grizzlies must decide how they’ll use their three picks in the 2024 NBA draft starting on Wednesday.

The option deadline and draft appear to be two different things to address, but there is overlap. Picking up Kennard’s option puts the Grizzlies in the NBA’s first apron and limits their flexibility. If Kennard’s option is expected to be declined, Memphis has more roster space and could be more aggressive during the draft.

ESPN front office insider Bobby Marks pointed out that even though the Grizzlies technically won’t be in the apron during the draft, the league will probably view them that way ahead of July 1 unless Kennard’s option is declined.

"If Memphis is an apron team, they won't be able to go out and buy a pick in the second round,” Marks told The Commercial Appeal. “They won't be able to do some of the other restrictions they would be able to do here unless that team option is declined here."

Kennard’s contract option is a point of conversation because of his ability as a 3-pointer. In theory, Memphis could go the cheaper route by declining the option and adding shooters through the draft, but Kennard has been one of the NBA’s best. He's shot 43.9% on 3-pointers for his seven-year career.

Shooting just happens to be one of the Grizzlies’ biggest needs, so the Grizzlies must weigh if Kennard’s contract is worth going into the penalty. When in the first apron, the Grizzlies won’t be allowed to acquire a player via sign-and-trade, which is something they did last offseason to facilitate the Dillon Brooks deal. They’ll also lose access to the non-taxpayer mid-level exception of $12.4 million and be reduced to having access to the $5.2 million MLE in free agency.

“There's also the value of the player that you could maybe use in a trade," Marks said. "So, I think we get caught up in the financial aspect of it when we hear apron and luxury tax, it's the bugaboo. But you still have a good player.”

Can the Grizzlies realistically draft Donovan Clingan?

ESPN’s Jeremy Woo has the Grizzlies selecting Cody Williams in his most recent mock draft. Williams is a tantalizing prospect with upside, but Woo also has Donovan Clingan falling to seventh. If Clingan is available at seven, Memphis will likely make a strong attempt to move up in the draft.

“I think that would be attractive,” Woo told the CA. "But I think also they have to know, there are a lot of teams calling, I believe, about No. 3, No. 4. Teams are trying to trade up.”

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If Clingan isn’t available, Memphis will have its options of players to choose from at nine, but Woo doesn’t have centers in his mock draft coming off the board in that range. Zach Edey is his next drafted center all the way down at No. 15, followed by Yves Missi at 21st overall.

In other words, it may be Clingan or addressing the need in free agency.

“With where they are, you're finding a rookie and expecting that rookie to play a lot of minutes on a playoff-caliber team in this draft might be a stretch,” Woo said. “If they can't get Clingan I think they'll be thrifty and look at other means of doing that.”

Damichael Cole is the Memphis Grizzlies beat writer for The Commercial Appeal. Contact Damichael at damichael.cole@commercialappeal.com. Follow Damichael on X, formerly known as Twitter, @DamichaelC.

This article originally appeared on Memphis Commercial Appeal: Memphis Grizzlies in NBA draft: Luke Kennard contract has impact