Examining the NBA’s Recent Salary Cap Projections

The NBA is experiencing a more successful 2021-22 season than anticipated, at least financially. The league projected a $119 million salary cap for the 2022-23 season in early August. That initial figure was based on the expected Basketball Related Income (BRI), but the league appears to be rebounding well from the last two pandemic-disrupted seasons.

On February 4, the NBA revised the 2022-23 salary cap projection to $121 million with a $147 million luxury tax threshold (up from $145 million). The exact numbers won’t be determined until just before the July free-agent period, but the recently updated figures have a wide-ranging impact.

It’s All About the Percentage Jump

As the salary cap rises and falls, so do most of the NBA’s many exceptions. The first step is calculating the growth percentage from 2021-22 to 2022-23. The current cap is $112,414,000. The $119 million projection reflected a climb of 5.86 percent, but the revision is a more robust jump of 7.64 percent (rounded for brevity).

Most of the spending tools this offseason will also climb by 7.64 percent. For instance, maximum salaries (based on the player’s years of service in the league) will rise by that same percentage:

Minimum salaries would similarly climb:

Note: the NBA reimburses teams for the amount over the two YOS veteran minimum, provided the contract is a one-year minimum deal. In those cases, the player will count against the cap at the two YOS minimum, which would also be their outgoing salary in trade.

The following exceptions will also climb with the cap:

Teams below the salary cap will have access to just the Room Mid-Level Exception (RMLE). Those who do not drop under the salary cap but stay below the NBA’s hard cap (or apron) can use the Non-Taxpayer Mid-Level (NTMLE) and Bi-Annual (BAE) Exceptions. Tax teams above the apron will only have the Taxpayer Mid-Level (TMLE)

With a luxury tax projection at $147 million, the apron projects to reach $153,639,000. At 90 percent of the cap, the minimum team salary would be $108,900,000.

Even rookie-scale contracts (for the top-30 draft picks in June) will climb proportionately. The scale amount for the No. 1 pick would be $9,014,800, though it’s nearly a standard for players drafted in the first round to earn the maximum 120 percent of scale. The following table shows the projected rookie-scale salaries (at 120 percent) for the 2022 draft class:

Additionally, the amount of cash that teams can use in trade projects to climb from the current figure of $5,785,000. A franchise will be able to send out as much as $6,227,000 from July of 2022 to June 30 of 2023 and, independent of what they trade out, can receive up to that same amount via trade.

Some Figures are Not Tied to the Salary Cap

Some numbers grow independently of the salary cap. Specifically, the Estimated Average Player Salary (EAPS) is based on actual player salaries from the previous season. As players sign contracts throughout the remainder of the 2021-22 season, the EAPS will continue to grow from the current $10,335,000 to approximately $10.4 million for 2022-23. The EAPS is a crucial data point for calculating a free agent’s cap hold.

Similarly, the Early Bird Exception is based on the prior year’s salaries, projected to climb from $10,384,040 to about $10.5 million.

If needed, the NBA will release additional projections after the regular season concludes. Otherwise, teams will use the listed figures until the league announces the exact numbers by June 30.

Email Eric Pincus at eric.pincus@gmail.com and follow him on Twitter, @EricPincus.