It looks like NBA general managers will have a few extra bucks to spend in the 2013-14 season.
According to Marc Stein of ESPN.com, the NBA's salary cap, which sat at just over $58 million this past season, will increase by about $500,000 next year.
Hearing early projections given to GMs and owners in May have NBA salary cap rising to just $58.5 mil next season. This season: $58.044 mil— Marc Stein (@ESPNSteinLine) June 3, 2013
Hey, if we're measuring in units of "Roy Hibbert fines," that's nearly a sevenfold increase over last year!
There are a couple of interesting "next wave" results on the way if the cap really is only increasing by half-a-million bucks. For starters, there'll apparently be a few disappointed teams, as some clubs expected the figure to increase by a much larger amount.
Expectation was $60M. RT @ESPNSteinLine: Hearing early projections have NBA salary cap rising to just $58.5. This season: $58.044 mil— Kevin Pelton (@kpelton) June 3, 2013
It's important to mention that the salary cap in the NBA is what's known as a "soft" cap, which means there are a lot of ways to exceed it. Practically speaking, the luxury tax figure is the one most teams focus on when constructing their rosters, as going over that number is how franchises incur financial penalties from the league.
It's a bit complicated, but basically, we can assume that the tax line will also increase.
See, the salary cap number is determined by a specific formula that involves a handful of financial factors. According to cap guru Larry Coon, here's how it works: "The salary cap calculation beginning in 2012-13 takes 44.74% of projected BRI (basketball-related income), subtracts projected benefits, and divides by the number of teams in the league."
Because the luxury tax is determined by the same process (except for the fact that it's based on 53.51 percent of projected BRI), that's why it's always higher than the cap number. So with last year's salary cap of $58.04 million, the tax line was $70.37 million.
Practically speaking, this latest news means that teams will have more money to sign free agents than they did a year ago, but apparently not as much as they'd hoped to have. And free agency is the area where the salary cap—and not the luxury tax—really matters.
Because, with a few exceptions, teams cannot sign free agents to contracts that would put them over the cap.
For example, if the Houston Rockets or Dallas Mavericks want to sign Dwight Howard (which, obviously, they do), they have to clear enough money to do so under the cap. In the case of the Rockets, who already have some cap room, that means getting rid of valuable assets like Thomas Robinson in an effort to get far enough under the magical cap line in order to be able to max out Howard.
The Mavs have less room than the Rockets, so their maneuvers may be more difficult on that front. Or even impossible.
That lower cap number (lower than expected) is less-than-ideal news for the Mavs.— Michael Dugat (@mdug) June 3, 2013
Essentially, both the Rockets and the Mavericks are going to have to trim even more salary off of their books than they might have expected.
That could be good news for the Atlanta Hawks, the team most comfortably under the cap. Without making any big salary-dumping moves, they can easily offer Howard a max deal. Of course, if it's really only money that Howard wants, he'll just re-up with the Los Angeles Lakers, who can exceed the cap (and already have, by the way) to retain their own free agents.
Ultimately, the free-agent landscape hasn't undergone a sea change with the news that the salary cap is increasing slightly. It has just become slightly more difficult for a couple of teams that hoped to be major players on the market this summer.