The NBA has lowered its salary cap projections for the next two seasons.
In a January memo attained by Basketball Insiders, the league informed teams that the 2017-18 cap is expected to be $102 million with a luxury tax threshold of $122 million. For 2018-19, the NBA estimates a cap of $103 million with the tax line at $125 million.
The NBA had originally projected a cap of $102 million in July, briefly raising that estimate to $103 million in October. The 2018-19 projection holds greater significance, dropping five million from the league’s July number of $108 million.
The decrease for next season is tied to an increase in player benefits, as dictated by the new Collective Bargaining Agreement (CBA) signed by the NBA and NBPA last month. The league now expects higher salaries and benefits for 2017-18, which in turn will eliminate an expected $100 million shortfall in player salaries that had inflated the 2018-19 projection.
Instead, the league now projects that players will earn $25 million more than their designated share of Basketball Related Income for the 2017-18 season.
Projections are subject to change, but teams planning for significant cap room in July of 2018 should adjust their expectations.
With a $102 million cap, the three salary tiers would be $25.5 million for players with up to six years of experience, $30.6 million for those with seven to nine and $35.7 million for those with 10 or more. Those figures climb slightly for 2018-19, with a $103 million cap ($25.8 mil, $30.9 mil and $36.1 mil, respectively).
Maximum salaries will be higher under the new rules of the CBA, at a true 25 percent, 30 percent and 35 percent of cap — an increase from the current formulae that would have resulted in max salaries at $24 million, $28.8 million and $33.5 million (with a $102 million cap).
While the cap is only expected to increase by 0.98 percent from 2017-18 to 2018-19, a second-tier player signing for a maximum salary starting at $30.6 million for next season will earn an eight percent raise to $33 million for 2018-19 — $2.1 million more than the expected maximum.
Empty roster charges have also increased to $815,615 million for next season, up from the $562,493 previously dictated by the outgoing 2011 CBA. That’s a decrease of $253,122 in space for each of a team’s open roster spots through 12.
Additionally, not only will first-round picks get larger salaries, their cap holds while unsigned has climbed from 100 percent to 120 percent of scale.
Roughly 90 percent of the NBA started this past summer under the cap. That number will reduce to roughly half the league this July. As the new CBA rules take hold, spending power is likely to trend downward for 2018-19.
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