The Days of an Insane Salary Cap Are Over

Over the past decade, the NBA, and sports in general, has been marked by unprecedented rises in the cost of paying players. In fact, it’s gotten to the point where many observers think it’s ridiculous how much players are being paid, and many people roll their eyes at the idea of basketball players making $30 million/year. It’s not for me to say whether they deserve all that money or not, but it looks like the days of super expensive, $30 million/year contracts are over.

ESPN’s Bobby Marks reported that the current salary cap, which stands at just over $109 million and was projected to jump to $115 million next season, will instead decrease, and it might be a decrease of as much as $25-$30 million. If this happened, the NBA’s salary cap would be set at between $89 and $94 million.

Let me explain what this means: under the salary cap, teams are required to construct their players’ contracts so that, when added together, their total yearly value comes in at or under the cap number. Additionally, the NBA has what’s called a “soft cap,” which means that teams can go over the cap, but they’re required to pay a 50% luxury tax to the league. This usually dissuades teams from going over the cap. For example, if a team went $5 million over the cap, that would mean that in addition to paying out all the money for their players, they’d have to pay an additional $2.5 million to the NBA just because they’re paid too much.

Now, why am I talking about the soft cap and luxury tax? Well, that’s because the majority of contracts in the league haven’t expired yet, meaning they would count towards the cap at their current value. Simply put, this would be tantamount to chaos. With the exception of a select few teams, a $25-$30 million dollar decrease of the salary cap would put the majority of the league’s franchises squarely in the luxury tax, and they’d owe a lot. Just imagine the teams who are right at the current salary cap and then would see a $25 million decrease in it the following year. Assuming that none of their current contracts expire, they’d owe $50 MILLION in luxury tax, a number which any owner would balk at paying.

I think that the $25-$30 million number should be taken with a grain of salt, but given the state of the world, which will not allow ticket sales for the immediate future, the salary cap in all leagues, not just the NBA, will have to go down. It’s a scary proposition and one that will change sports for sometime.

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