Published 13:02 IST, January 31st 2020
NBA to readjust salary cap and luxury tax for 2020-21 season; Warriors could be in trouble
The NBA salary cap is expected to go down by a reported $3 million for the upcoming season. The reason for this is largely expected as the Rockets-China issue.
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The likes of the Philadelphia 76ers, Denver Nuggets, Toronto Raptors and the Golden State Warriors could possibly be in for some bad news this week. According to Adrian Wojnarowski, the NBA is in the process of releasing an adjusted salary cap for the 2020-21 season, while the luxury tax projections are also expected to drop. The original salary cap projection for the next season was $116 million. That figure is expected to drop by $3 million.
The NBA has informed teams of projected 2020-2021 salary cap: $115M, league source tells ESPN. Original projection was $116M. That is still an increase from $109.1M in 2019-20.
— Adrian Wojnarowski (@wojespn) January 30, 2020
NBA salary cap projections to drop, but revenue expected to rise
The adjusted NBA salary cap could, quite possibly, be chalked down to the incident with China in the offseason. Houston Rockets GM Daryl Morey tweeted in support of the independence of Hong Kong earlier in October. The tweet from the Houston Rockets GM, which was of an image supporting the Hong Kong protesters was widely shared on social media later, which drew the ire of the government of China. Rockets owner Tilman Fertitta immediately released a statement through his social media account after the incident, but the damage was already done.
Listen....@dmorey does NOT speak for the @HoustonRockets. Our presence in Tokyo is all about the promotion of the @NBA internationally and we are NOT a political organization. @espn https://t.co/yNyQFtwTTi
— Tilman Fertitta (@TilmanJFertitta) October 5, 2019
Following Daryl Morey’s tweet, China put a stop on the television coverage of the NBA in the country while also pulling back sponsorships. This was a major blow for the NBA, considering that China was a major source of revenue for the NBA. Wojnarowski reported that the tweet from the Houston Rockets GM ultimately ended up costing the NBA somewhere around the $150 million and $200 million-mark. The projected NBA salary cap was $116 million. Wojnarowski expects the new NBA salary cap projection to be $113 million.
The NBA luxury tax is expected to hit the likes of the Golden State Warriors, Philadelphia 76ers, Toronto Raptors and the Denver Nuggets. The previous NBA luxury tax was set at a reported $139 million. However, the league is reportedly likely to set the NBA luxury tax ceiling at $139 million. The Warriors, therefore, will be hit by the adjusted ceiling of the NBA luxury tax, courtesy of Draymond Green's contract extension kicking in. Their NBA luxury tax problems will also be compounded by their built-in salary for a top-five pick.
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Many teams and agents had prepared for a bit lower projection, so there will be some encouragement with these 2020-2021 salary cap and luxury tax projections. Still, no figure will be finalized until numbers are officially calculated in late June.
— Adrian Wojnarowski (@wojespn) January 30, 2020
NBA salary cap history
The NBA salary cap history throws up some interesting numbers. For the 2017-18 season, the NBA salary cap was set just over a reported $99 million. The next season, the NBA salary cap history reveals a figure of just under a reported $102 million. Finally, for the 2019-20 season, according to NBA salary cap history, was set $109.14 million for the 2019-20 season, according to the NBA. The tax level for the 2019-20 season was $132.627 million.
13:02 IST, January 31st 2020