The NBA salary cap is estimated to drop between $50.4 million and $53.6 million for the 2010-2011 season. The figures for this upcoming season have the cap at $57.7 million per team. This is down $1 million from $58.7 from the previous campaign. Commissioner David Stern notes the changes were based on the economic recession.

ESPN writes that the Knicks will be one of the teams most affected by the reduced cap. New York planned on luring Lebron James with the idea of pairing him with another marquee free agent in 2010. However, if this move goes through then the franchise can sign only one player to a maximum contract. The Knicks have to pay $23,736,207 in luxury tax for having a payroll over $71.15 million.

The NBA announced that the luxury tax would be set at $69.92 million next season. The league also announced that the mid-level exception (MLE), a salary option for teams over the cap, would be $5.854 million next season, up from $5.58 million.