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NBA Estimates $93 Million Salary Shortfall

According to a memo, the NBA projects that teams finished the season with a payroll shortfall of $93 million.



According to an NBA memo, the league projects teams finished the season with a payroll shortfall of $93 million.

By the rules of the Collective Bargaining Agreement (CBA), teams are obligated to collectively pay players in the range of 49-51 percent of the NBA’s basketball related income (BRI).

Throughout the season, 10 percent of player salaries are held back in escrow, in case the players are overpaid based on their designated ratio of BRI.

Because the league didn’t reach their mark, the players will get their withheld money back from escrow – plus the estimated $93 million.

In early July, the league will complete a full audit of revenue and expenses to lock in exact figures.

Looking ahead to the 2016-17 season, the NBA now projects the salary cap will climb to $92 million, with a luxury tax threshold of $111 million.

Individual teams will be obligated to pay out 90 percent of the cap, known as the salary floor, which would be $82.8 million of a $92 million cap.

The NBA estimates that teams will fall short of that number by $375 million, or an average of $12.5 million per franchise.  If so, the league will once again pay out wages held in escrow, along with a massive balloon payment of $375 million.

The league also projects a $107 million salary cap for the 2017-18 season, with a $127 million luxury tax threshold, although both the owners and players can opt out of the current CBA after this coming season.

If neither party opts out, the salary cap could dip slightly to $105 million for 2018-19.

Finally, the NBA estimates select teams will pay $121 million in luxury taxes this season, half of which will go into the league’s revenue sharing plan.  The balance, or roughly $2.6 million per team, will go to those franchises under the $84.7 million tax threshold.

Tax teams include the Golden State Warriors, Cleveland Cavaliers, Chicago Bulls, Los Angeles Clippers, San Antonio Spurs, Houston Rockets and Oklahoma City Thunder.


Eric Pincus is a Senior Writer for Basketball Insiders, with a focus on the business side of the game.

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