Salary Cap

The NBA’s latest salary cap projection for the 2017/18 season is now $101MM, sources told Adrian Wojnarowski of The Vertical. That’s an increase of nearly $7MM over this season’s cap of $94.1MM but lower than previous projections. The tax level is projected to rise $8MM to $121MM next season, Wojnarowski adds. (Twitter links).

This is a slight drop from the projections that Eric Pincus of Basketball Insiders reported in February. Pincus’ report projected a 2017/18 cap of $102MM with a tax threshold of $122MM. Previous projections had the cap for 2017/18 as high as $108MM, according to RealGM.com.

The somewhat modest increase in the projected cap means that teams will have a little less freedom to throw money around, compared to the free agent spending spree last summer. Players will still make substantial more money than just a couple of seasons ago. The cap was $70MM last season and hovered between $53.1MM in 2006/07 to $63MM in 2014/15.

The National Basketball Players’ Association has informed agents that the league salary cap is projected to increase to $120MM in 2020, sources tell Shams Charania of The Vertical. The NBA’s most recent evaluation of the 2020 cap suggested a rise to $118MM is likely, per Charania.

NBA salary cap projections can fluctuate significantly, particularly when figures are being calculated for several years in the future. Still, the most recent estimates from the league and the players’ union – in the wake of a tentative agreement on a new CBA – suggest that the cap is on track to increase substantially over the next several years. The 2016/17 cap is just over $94MM, with a $103MM figure projected for 2017/18.

When the NBA projected its cap for future seasons back in July, its estimate for the 2020/21 campaign was more modest. At the time, the league anticipated a $114MM cap, with a $139MM luxury tax threshold. According to Charania, the projected tax line for a $120MM cap in ’20/21 would be about $143MM.

As Charania details, a $120MM cap would result in maximum salaries of $42MM for top-tier players (35% of the cap), $36MM for the second tier (30%), and $30MM for the third tier (25%). Additionally, under the new CBA, minimum salaries, rookie salaries, and mid-level exceptions will be tied to the salary cap – rather than getting fixed annual increases – so those figures are all on track to increase significantly as well.

While it’s too far away to know exactly which teams will benefit from the increasing cap projections, it’s safe to say that teams with multiple stars, such as the Warriors, will have a better chance to keep their rosters together and avoid going deep into the luxury tax if the cap continues to grow rapidly.

A cap increase of more than $24MM+ this offseason has led to unprecedented spending around the NBA. However, that spending spree has contributed to lowering the league’s salary cap projection for the 2017/18 season. According to Eric Pincus of Basketball Insiders, the ’17/18 cap, previously projected to be in the $107MM range, is now expected to be closer to $102MM.

As Pincus explains, the cap had originally been projected to reach $107MM due to an expectation that the league would fall short of its required obligation to the players next year by about $375MM. However, after a week-long free agency frenzy, that projected shortfall has been reduced to $200MM. Because the league is no longer expected to owe the players so much money, the projected salary cap figure has been reduced along with the projected shortfall.

Plenty can change between now and next summer, so that $102MM projection is hardly set in stone. At this time a year ago, the NBA didn’t anticipate a $94MM+ salary cap for 2016/17. Still, it’s a somewhat worrisome development for teams hoping to create maximum-salary slots next summer, and players hoping to land huge deals.

Here are the NBA’s current salary cap projections for the next several seasons, via Pincus:

• 2017/18:
  • Cap: $102MM
  • Tax: $122MM
• 2018/19:
  • Cap: $108MM
  • Tax: $130MM
• 2019/20:
  • Cap: $109MM
  • Tax: $132MM
• 2020/21:
  • Cap: $114MM
  • Tax: $139MM

As Pincus outlines, the starting maximum salaries on a $102MM cap would work out to about $24MM for players with less than seven years of experience, $28.8MM for players with seven to nine years of experience, and $33.5MM for those with 10+ years of experience.

Of course, the opt-out date for the NBA’s current Collective Bargaining Agreement is looming — either the league or the players’ union can opt out of the agreement by December 15. If the CBA is renegotiated significantly before the summer of 2017, it’s possible the ’17/18 cap will look quite different than what today’s projections suggest.

The NBA has set the salary cap for the 2016/17 season at $94.143MM, as announced in a press release.

The luxury tax line is at $113.287MM. The salary cap for the 2015/16 season was set at $70MM, making this the biggest single-year jump in league history, as noted by Real GM. It’s nearly a 35% increase over last year’s cap, which is worth considering when evaluating this summer’s free agent contracts.

The minimum team salary – or the “salary floor” – is set at 90% of the cap, which amounts to $84.729MM. The non-taxpayer mid-level is set for $5.628MM, the taxpayer mid-level is set at $3.477MM and the room mid-level is set at $2.898MM.

According to Eric Pincus of Basketball Insiders (Twitter link), the starting salaries for maximum-salary contracts will look like this:

• Players with 0-6 years of experience: $22,116,750
• Players with 7-9 years of experience: $26,540,100
• Players with 10+ years of experience: $30,963,450

For the past few months, we’ve been operating under the assumption that the NBA’s salary cap will increase to about $92MM for the 2016/17 season. However, it appears the cap will end up making an even larger jump from this year’s $70MM. According to Shams Charania of The Vertical, the NBA has informed teams that the projected salary cap will rise to $94MM, with the projected tax cutoff increasing to $113MM.

The actual salary cap for 2016/17 won’t be officially confirmed until July, so the latest projected figure remains just that — a projection. Still, the fact that the league is already informing teams of that $94MM figure suggests that the cap should end up in that neighborhood.

A difference of $2MM for the projected ’16/17 cap won’t make a major difference for most teams, but it could benefit clubs looking to carve out cap room for a max salary. Getting an extra couple million dollars in breathing room could allow clubs to keep a low-priced player and still land a coveted free agent, rather than having to jettison that incumbent player to make room.

Of course, with the cap increasing, projected max salaries will increase as well. The max salary projections for a $92MM cap were $21.6MM for players with six or fewer years of experience, $25.9MM for players with between seven and nine years of experience, and $30.3MM for veterans of 10 or more seasons.

A $94MM cap would increase those figures by a few hundred thousand dollars apiece, to $22MM, $26.4MM, and $30.8MM, respectively, according to Charania. Larry Coon’s max salary projections (via Twitter) are each $200K higher ($22.2MM, $26.6MM, and $31MM).