It’s like going back eleven years… salary cap strict, without the possibility of exceeding it. This is what exists today in the NHL and NFL, and according to ESPN, the NBA is considering implementing it during the next collective bargaining agreement (CBA) discussions. ESPN does not speak of “hard cap” but of “upper limit of expenditure”.
Why put in place this “hard cap” which does not bear the name when the NBA has never been so well? Simply because the luxury tax is no longer a deterrent enough and some owners are willing to pay tens or even hundreds of millions of dollars in additional taxes to try to win the title. This is the case today for the Warriors, the Nets and the Clippers, which greatly exceed the “salary cap”. Between them, these franchises concentrate more than 70% of the “luxury tax” donated to the NBA.
Unsurprisingly, the players’ union is against this idea since it would limit players’ salaries, and prevent teams from extending their best players to the maximum salary. For the players, this idea is also a point of no return, and no discussion will be possible if the NBA wishes to go to the end of this project.
For its part, the NBA explains that this “upper spending limit” will smooth the level of the NBA, and allow the 30 franchises to fight on equal terms. This is the speech that has always been held by the league: to ensure that any franchise, and especially small markets, can get involved in the race for the title.
As reminded ESPN, this type of proposal is classic at the start of negotiations. Each camp comes with strong proposals, and then it is a question of finding a compromise. In this case, the two camps are already trying to find an agreement by December 15, the first deadline for leaving the current collective agreement in December 2023. If the two parties do not succeed, the agreement in force will come to an end, until June 30, 2024. With therefore the risk of a lockout and weeks, even months, of strike.
– salary cap : this is the payroll defined by the NBA. For the next season, it is announced at 125 million dollars, but could be even higher. NBA franchises have the ability to override it when extending their own players or through “exceptions.”
– luxury tax : in the NBA, the salary cap is not strict, and the NBA authorizes the richest franchises to exceed the threshold set with a tolerance margin of approximately 20%. In this case, next year, the franchises would normally have been able to spend up to $139 million. Then, for every dollar spent above this cap, franchises must pay the “luxury tax” to the NBA. A kind of tax that can be very expensive, and candidates for the title usually pay tens of millions of dollars each year. A sum then paid back to the franchises, good students, who did not pay the “luxury tax”.
