Projecting 2017-18 NBA Cap Room Under New Deal

With the NBA and NBPA agreeing to terms, a new Collective Bargaining Agreement will be in place well before the 2017-18 season.

The NBA still projects next year’s salary cap to be $103 million, but a number of rule changes could diminish spending power across the league, detailed previously by Basketball Insiders (here and here).

Specifically, the salary scale for first-round picks will climb. Empty roster charges for every open spot under 13 will be the rookie minimum salary of $815,615.

Teams will no longer need to hold off on signing their first-rounders until they utilize their cap room. Now, the industry standard 120 percent of rookie scale will also be the team’s cap hold while the player remains unsigned.

Additionally, minimum salaries rise to as high as $2.3 million, depending on years of service. Any players under contract below that threshold will receive bumps in pay.

Teams may have to choose between going under the cap or staying over, with the Mid-Level Exception (MLE) climbing to $8.4 million and the Bi-Annual Exception (BAE) to $3.3 million.

A team that can get to $11.7 million in cap space would have the same spending power if they stay over the cap and use their exceptions. The most they’d be able to pay a single player would be $8.4 million in the first year, but they may have more flexibility above the cap.

Maximum salaries project to be $25.8 million for players with up to six years of experience, $30.1 million for those with seven to nine years and $36.1 million with 10 or more years.

Those who qualify as designated veterans, while entering their eighth or ninth seasons, can re-sign with their existing teams to the highest max tier ($36.1 million), provided they reach certain qualifications (MVP, Defensive Player of the Year, All-NBA Team, etc.).

The following is an estimate of the maximum cap space teams would have if they let all their free agents go, with a draft order based on the standings as of December 20, with ties broken randomly.

Nearly every team was under the cap this past offseason, but next summer 10 teams will either have no space at all or about as much as the MLE and BAE combined. Of the 20 franchises that might have spending power, only 14 will have enough to spend on a second-tier max player ($30.1 million). Seven teams will have room for the longest tenured players ($36.1 million). While five teams have space to pay two players at the $25.8 million max, none can afford two at the middle tier.

For most teams to open up significant cap space, they would need to let go of multiple productive players. After the stars select their destinations, franchises may choose instead to stay over the cap to try and retain the core of their roster, using exceptions to add to the mix.

The days of players like Bismack Biyombo, Tyler Johnson, Luol Deng, Allen Crabbe and Timofey Mozgov getting contracts starting at $15 million a year are likely over. The market for quality role players may drop down to the $8.4 million MLE. That doesn’t mean a few free agents won’t be overpaid this summer, that seems to be an inevitability every year – but not on the scale of 2016.

The new deal will provide more salary for maximum players, minimum players and draft picks – and yet the split of revenue remains at a maximum of 51 percent for the players. Conversely, a group of players will earn less: the middle class.

Note that the agreement between the NBA and NBPA won’t be finalized until mid-January and is subject to change. Teams can make trades or buy-out players to open up additional cap space. Several players have non-guaranteed salaries or team/player options. In most cases, to get to maximum cap room, the assumption is that all players without 100 percent locked in salary are off the books.