The relatively flat salary cap is going to cause many problems for many years to come.
General managers in this league sign players to long-term contracts with the understanding that the cap will go up by a certain percentage every year; a player signed to a contract worth 10 percent of the total cap today is supposed to, under normal circumstances, perhaps count for as little as 6 or 7 percent as that contract enters its final year or two.
But the pandemic and its financial fallout for the league changed all that. From 2018-19 to the present, the cap has only gone up $3-million in total. It is currently estimated to go up only another $2-million by 2025. That’s $5-million in cap growth over seven seasons. By contrast, the cap went up $6.5-million over the three seasons between 2016-17 and 2018-19.
That puts everyone in a tight spot: A whopping 13 teams are within a league-minimum contract of exceeding next year’s cap of $82.5 million, including 10 already over it, most with fewer than the maximum of 23 contracts on the books. What that means is there are likely to be somewhere between one-third of the league and nearly half of it that cannot carry three healthy scratches for large swaths of the season.
This isn’t (necessarily) bad cap management by general managers, but rather a situation no one would have wanted or been able to plan for, combined with the need to constantly keep up with the Jonses when it comes to maintaining the best roster possible.
If things had continued on their previous trajectory, with the salary cap rising about 4.5 percent per year (the pre-COVID, post-2013 CBA average), it would currently stand at a little under $94.8-million. No one in the league is even close to that number today. And while many teams would have adjusted their spending to a more growth-friendly cap environment over the past few years, maintaining close proximity to the ceiling throughout, we certainly wouldn’t be at a point on Aug. 1 where close to half the league is over the cap.