NBA Roundtable

League Memo: 2010 Cap

In General NBA on July 8, 2009 at 11:48 am

A frightening memo from the NBA

The NBA’s ballyhooed free-agent summer of 2010 might have quietly taken another hit late Tuesday night.

In a memo announcing next season’s salary cap and luxury-tax threshold, sent out shortly before the league’s annual July moratorium on signings and trades was lifted at 12:01 a.m. Wednesday, NBA teams also received tentative projections from the league warning that the cap is estimated to drop to somewhere between $50.4 million and $53.6 million for the 2010-11 season.

Why?

The official league memorandum, obtained by ESPN.com, forecasts a dip in basketball-related income in the 2009-10 season of 2.5 percent to 5 percent, which threatens to take the 2010-11 cap down some $5 million to $8 million from last season’s $58.7 million salary cap.

A significant drop for the luxury-tax threshold is also projected going into the summer of 2010. If basketball-related income drops by 2.5 percent in 2009-10, league officials are projecting a 2010-11 salary cap of $53.6 million and a luxury-tax line of $65 million. If BRI, as it is referred to in the NBA, decreases by five percent, teams would be looking at a $50.4 million salary cap and a luxury-tax line of $61.2 million in 2010-11.

Reaction

“Real scary,” said one Western Conference executive.

Said another from the West: “The figures for [2009-10] are better than I expected. It is [the summer of 2010] that will be scary.”

Last Summer

Many folks around the NBA were expecting a cap of around $62-63 million in 2010. This is a decrease of $10-13 million.

2010 Signings

A max contract in 2010, for Bron/Wade/Bosh, is worth 30% of the cap. So, that would be a starting salary of $16.02 million. That’s less than 105% of their previous year’s pay, so the starting figure would be $16.57 million instead. It’s possible, but unlikely, that all three players will decide to stay within their current contracts ($17.15 million) for another season.

Everybody outside of the star players is likely looking at a reduced contract next summer. Those borderline All-Stars who get $10-12 million, those players could be looking at less money too.

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  1. Other interesting cap news courtesy of True Hoop — link

    Appearently, owners are getting reimbursed to the tune of $6.5 million.

    Also, the redistributed funds from luxury tax paying teams to non-luxury tax paying teams works out at $2.9 million. I believe that is less than it was in recent years (around $4mil).

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