The NBA salary cap is somewhat malleable, with various exceptions allowing every team to surpass the $109,140,000 threshold once their room is used up. In some cases, teams blow past not only the cap limit, but the luxury-tax limit of $132,627,000 as well — the Warriors project to have a nine-figure tax bill this season as a result of their spending.
The NBA doesn’t have a “hard cap” by default, which allows a club like Golden State to build a significant payroll without violating CBA rules. However, there are certain scenarios in which teams can be hard-capped, as we explain in a glossary entry.
When a club uses the bi-annual exception, acquires a player via sign-and-trade, or uses more than the taxpayer portion ($5,718,000) of the mid-level exception, that club will face a hard cap for the remainder of the league year.
When a team becomes hard-capped, it cannot exceed the “tax apron” at any point during the rest of the league year. The tax apron was set $6MM above the luxury tax line in 2017/18 (the first year of the current Collective Bargaining Agreement) and creeps up a little higher each time the cap increases. For the 2020/21 league year, the tax apron – and hard cap for certain clubs – is set at $138,928,000.
More than half the teams in the NBA have been willing to hard-cap themselves this offseason, and in some cases, it will significantly impact a team’s ability to add further reinforcements later in the league year. The Bucks and Lakers are among the teams right up against the hard cap, which may prevent them from being players in free agency during the season unless they can shed salary.
For other clubs, the hard cap is just a technicality that won’t affect their plans. The Hawks and Thunder are among the hard-capped clubs that will have zero practical concerns about reaching that threshold in 2020/21.
Listed below are the hard-capped teams for the 2020/21 league year, along with how they created a hard cap.
Atlanta Hawks
- Acquired Danilo Gallinari from the Thunder via sign-and-trade.
Boston Celtics
- Using non-taxpayer mid-level exception on Tristan Thompson.
Charlotte Hornets
- Acquired Gordon Hayward from the Celtics via sign-and-trade.
Dallas Mavericks
- Using non-taxpayer mid-level exception on Willie Cauley-Stein and Trey Burke.
Denver Nuggets
- Using non-taxpayer mid-level exception on JaMychal Green and Bol Bol.
- Using bi-annual exception on Facundo Campazzo.
Detroit Pistons
- Acquired Jerami Grant from the Nuggets via sign-and-trade.
Houston Rockets
- Acquired Christian Wood from the Pistons via sign-and-trade.
Los Angeles Clippers
- Using non-taxpayer mid-level exception on Serge Ibaka.
Los Angeles Lakers
- Using non-taxpayer mid-level exception on Montrezl Harrell.
- Using bi-annual exception on Wesley Matthews.
Miami Heat
- Using non-taxpayer mid-level exception on Avery Bradley and Maurice Harkless.
Milwaukee Bucks
- Using non-taxpayer mid-level exception on D.J. Augustin and Bryn Forbes.
- Using bi-annual exception on Bobby Portis.
New York Knicks
- Acquired Austin Rivers from the Rockets via sign-and-trade.
Oklahoma City Thunder
- Acquired Kenrich Williams, Josh Gray, and Zylan Cheatham from the Pelicans via sign-and-trade.
Phoenix Suns
- Using non-taxpayer mid-level exception on Jae Crowder.
Portland Trail Blazers
- Using non-taxpayer mid-level exception on Derrick Jones.
Toronto Raptors
- Using non-taxpayer mid-level exception on Aron Baynes and Alex Len.
Utah Jazz
- Using non-taxpayer mid-level exception on Derrick Favors.
Washington Wizards
- Using non-taxpayer mid-level exception on Robin Lopez.
This list could continue to grow during the offseason if other teams acquire a player via sign-and-trade, use more than the taxpayer portion of their mid-level exception, or use their bi-annual exception.
The Warriors are paying nine figures toward their tax bill? That has to be an error. They will pay more than $99,999,999 in tax?
100,000,000. More than 100 million in tax. It’s correct.
I think I read somewhere 300 million dollars in total salary and tax for 2021. Never-before-seen commitment to winning and building a roster in professional sports.
Joe lacob is one-of-a-kind. And this is done with no guarantee of fans in attendance $$.
There’s only 3 things I can think of to justify this for the one season. Curry’s 32 years old so this has to be done now. 2) Lacob bought the Warriors for 450 million and now they’re worth 3 billion plus. And number 3, his other businesses must be doing very well so even if he loses a truckload on the Warriors he’ll be okay and the losses May provide tax breaks on his other businesses?
Yeah, the exact amount is still up in the air based on where their team salary lands and how much of a break they get at the end of the year (since tax penalties will be reduced by the same percentage that the NBA falls short of its projected revenue). But at the time of the Oubre trade, Bobby Marks was projecting a $134MM tax bill (before the end-of-season reduction).
Spending more on tax on salary than most any team is spending on salary. That is some major financial flexing.
Makes the injury to Thompson sting a little extra, or any setback. When you know your organization is going all in on a season like that, I wonder how it affects mentality. Probably some good and bad to it, but it seems hard to fathom generally. I get reinvesting the growth of franchise value, but are they looking at getting out of the tax anywhere in near future?
That’s a good question. They can’t possibly afford to keep paying ginormous tax bills like this. Maybe they will be forced to do exactly what OKC has done and blow up the team in a couple of years.
OKC wasn’t forced to blow that team up. If they offer Harden just 2 MILLION more per, they likely become the Dynasty that the Warriors became. Westbrook/Harden/KD/Serge/Adams?
That’s…ridiculous. But they didn’t, so…
neo, it is a loop hole that allows ‘financially strong (big city)’ teams to keep on keeping on and the enormous tax bill they pay is kicked back into the pockets of the ‘lesser financially strong (small market)’ teams that in essence essentially just ‘make up’ the numbers in the league.
I suppose they are going to try hard to resign Oubre, given their constraints next year over the cap I believe they can’t sign players over the league minimum? That pretty much leaves them locked in to the talent they have except through trade, draft and developing guys on minimum deals. I knew they were spending heavily, but didn’t think it was that extreme and now more curious how they navigate future years.
Players who will be using their contract earnings to provide Spelling Lessons for their parents:
Jerami Grant
Bryn Forbes
Jae Crowder
Aron Baynes
Pretty sure spelling died a long time ago now too…remember shorthand…couldn’t get an office job without it…my kids write everything in abbreviation and I cannot for the life of me decipher it at all.
Trust me. It’s more a matter of trying to be cutesy rather than anything else. My mom ACCIDENTALLY misspelled Lamont on my birth certificate!
Rumors out of the Oklahoma City Thunder is that contracts have been offered to players in an attempt to build around Zylan Cheatham. Those players are speculated to be Dudley Dewey, and Henry Howe; which would create the threesome of:
Dewey, Cheatham and Howe !!
are you ok?
Cute. From a very old 3 Stooges episode.
Players who will once again be asking their parents, “Whatever possessed you to give me THAT First Name?”
Danilo Gallinari
Tristian Thompson
Willie Cauley-Stein
Trey Burke
JaMychal Green
Bol Bol
Facundo Carpazzo
Serge Ibake
Montrezl Harrell
Avery Bradley
Maurice Harkless
Kenrich Williams
Zylan Cheatham
Dude you need to get a hobby.
Wow he really does
GOT ONE !!
This is it !!
Yeah, like half of those names are just normal names. Trey Burke? Willie? Maurice?
And then some are just European. Not everyone just uses biblical names like John, Paul, Mike and…whatever else.