There’s going to be a massive, one-time increase in the NBA’s salary cap when the league’s new television deal kicks in before the 2016-17 season, Brian Windhorst of ESPN reports.
The current cap is $US66.3 million. By our maths, it will jump to $US88.8 million in 2016-17 — the biggest single-year increase in league history.
The league had been pushing for a “smoothing” proposal to increase the cap gradually over a series of years, but Windhorst reports that the players rejected that proposal.
The increase is going to have widespread implications for player movement in the next two years. Some of the most significant:
1. Players have an incentive to sign long-term deals in 2016 instead of 2015. We could see a lot of one-year contracts this summer. Players would much rather hit free agency in 2016 than 2015.
For 2015 free agents who could get a max contract (LeBron James, Kevin Love, Marc Gasol, DeAndre Jordan, LaMarcus Aldridge, Goran Dragic), the value of a max deal will be worth tens of millions of dollars more in 2016 than 2015. Even for guys who aren’t going to get max contracts, it’s smarter to wait and hit the market in 2016 when every team in the league is flush with cash.
As a result, there’s going to be more uncertainty. Love, for example, might decide to take a one-year deal (or just not opt-out of his current contract) instead of committing himself to a long-term contract. Teams that are banking on big-money free agents (Lakers, Knicks) might be forced to wait another year.
If enough guys sign one-year deals, we could be in for an absolute frenzy in the summer of 2016, with a significant proportion of the league’s players on the market.
2. Guys are going to get overpaid this summer. Knowing that they’re going to have more money than they know what to do with in 2016, teams are going to be more willing to give free agents monster deals in 2015. An $US8 million player under the old cap might be worth $US12 million under the new cap. Guys like Brandon Knight — solid starters but not “max” players, stand to benefit from this shift.
3. A bunch of contracts just became much more valuable. There’s a generation of guys who signed max contract extensions around 2013 that are going to suddenly be on cheap-looking deals come 2016-17. DeMarcus Cousins is the prime example. He’ll make $US17 million in 2016-17 and $US18 million in 2017-18. By that time, the max contract will be worth around $US30 million per year, and Cousins will be underpaid by more than $US10 million.
That’s a huge factor when it comes to trades and roster building. Even if Cousins becomes disgruntled in Sacramento, the Kings would be crazy to trade him because he’s on the most team-friendly contract in the league.
NOW WATCH: Cristiano Ronaldo, wearing a wig and glasses, surprised a young fan on the streets of Madrid
Business Insider Emails & Alerts
Site highlights each day to your inbox.