The NBA salary cap is somewhat malleable, with various exceptions allowing every team to surpass the $101.869MM threshold when that room is used up. In some cases, teams blow past not only the cap limit, but the luxury-tax limit as well, with clubs like the Thunder, Warriors, and Nuggets projected to go well beyond that tax line this year.
The NBA doesn’t have a “hard cap” by default, which allows those clubs to build significant payrolls without violating CBA rules. However, there are certain scenarios in which teams can be hard-capped. When a club uses the bi-annual exception, acquires a player via sign-and-trade, or uses more than the taxpayer portion of the mid-level exception, that club will face a hard cap for the remainder of the league year.
When a club becomes hard-capped, its team salary cannot exceed the tax “apron” at any point during the rest of the league year. For the 2018/19 league year, the apron is $129.817MM, approximately $6MM above the $123.733MM tax line.
Based on the agreements reported so far in free agency, it appears that five teams are set to hard-cap themselves for the 2018/19 league year. Here are the details on those teams:
New Orleans Pelicans
When the Pelicans agreed to sign Elfrid Payton to a one-year, $2.7MM deal, we assumed they’d use a portion of their mid-level exception rather than their bi-annual exception, to avoid creating a hard cap. However, the team then reached a two-year agreement worth a reported $18MM with Julius Randle.
It now appears that the Pelicans will sign Randle using their full ($8.641MM) mid-level exception. With Rajon Rondo headed to the Lakers, it’s possible the two teams will arrange some sort of sign-and-trade agreement to allow New Orleans to preserve its MLE, but there’s been no indication so far that that’s in the works. And either way, the Pelicans would become hard-capped.
The projected salaries for Randle and Payton bring the Pelicans’ total team salary to about $112MM. With Rondo and DeMarcus Cousins headed elsewhere, New Orleans likely doesn’t have any other big-money investments coming, so the hard cap shouldn’t be a major issue.
Milwaukee Bucks
The Bucks agreed to a deal with Ersan Ilyasova worth a reported $21MM over three years. The taxpayer mid-level exception would only allow for about $16.8MM over three seasons, so Milwaukee figures to exceed that amount and create a hard cap.
Taking into account Ilyasova’s projected salary, the Bucks are up to almost $108MM in guaranteed team salary. Keeping Brandon Jennings and Tyler Zeller, who have non-guaranteed deals, would increase that number to nearly $112MM. That would leave less than $18MM in breathing room under the hard cap as Milwaukee considers what to do with restricted free agent Jabari Parker.
Minnesota Timberwolves
When word of the Timberwolves‘ agreement with Anthony Tolliver initially surfaced, the one-year deal was said to be worth about $5-6MM. That amount lined up with the taxpayer mid-level exception ($5.337MM), so it made sense that Tolliver would receive that taxpayer MLE. However, subsequent reports said the forward will actually earn $5.75MM, meaning Minnesota will be using the full MLE and will become hard-capped.
Tolliver’s signing isn’t yet official, so it’s possible that final number will look a little different, but if the Wolves’ flexibility this season ends up limited by paying Tolliver an extra $400K, that move will be questioned. For now, Minnesota projects to have a team salary of about $118MM for 11 players, assuming they stretch Cole Aldrich‘s partial guarantee. That should give the Wolves enough room to fill out their roster and stay well below the apron, perhaps even avoiding the tax too.
San Antonio Spurs
Like the Timberwolves, the Spurs appear to have imposed a hard cap on themselves by barely exceeding the taxpayer mid-level exception. A two-year deal using the tax MLE would end up just shy of $11MM, but San Antonio’s reported agreement with Marco Belinelli is for $12MM, suggesting the team will be using its full MLE.
Taking into account new deals for Belinelli and Rudy Gay, the Spurs appear to have a team salary of approximately $108MM. That puts them more than $20MM below the tax apron, so as long as they don’t have to break the bank for restricted free agents Kyle Anderson, Davis Bertans, and Bryn Forbes, they should be fine.
New York Knicks
In order to secure a commitment from Mario Hezonja, the Knicks had to go over the taxpayer mid-level, agreeing to sign the veteran forward for $6.5MM. New York will be using the full MLE, dedicating most or all of the remaining portion to second-rounder Mitchell Robinson.
The hard cap shouldn’t be a factor for the Knicks, who are currently at about $109MM in team salary, and don’t have any other major expenditures planned.
Salary information from Basketball Insiders was used in the creation of this post.
