Get to know the NBA Salary Cap In Simple Terms

       Just a quickie on the NBA salary cap.  It seems like people aren't as educated on it and are thus writing irrelevant blogs about who the Lakers should be getting.

Not going to get into serious detail but here's the minimum that any NBA fan should know:

(1)  The salary cap is determined every year based on the previous years' revenue.  This year it will be somewhere around $58 Million.

(2)  The Lakers are committed to $80+ million already with the players under contract (Bryant, Gasol, Bynum, Odom, Artest, Walton, Vujacic)

Ok, with that said, any team over the cap has a few spending tools to use:

     (A)  The Mid-level Exception:  This exception can be used to sign any free agent to the average NBA salary which is something like $6 Million per for up to 5 years with small increments as raises

     (B)  The Bi-Annual Exception:  Every OTHER year, a team over the cap can sign a free agent to a contract at about $2 Million per season for a max of 2 years.

     (C)  The Veteran's Minimum:  Any team can sign a player for the Vet's minimum.  Depends on the amount of years played in the league and ranges from about $800,000 - $1.5 Million (or so)

     (D)  Any team can sign their own free agents for a max of 6 years up to a max salary with 12% increases every year.

     (E)  A team under the salary cap can sign another team's free agent for up to a max salary for up to 5 years with only 8% increases.  (The second reason is why player X can max-out for 6 years $130 mil with his old team but only get 5 years, $100 mil from another team). 

     In any case, if you're team is $10mil under the cap, that's what they can spend.  If they are $45 mil under the cap (like Miami), you can sign 3 guys for $15 mil each.

     (F)  Finally, any team over the luxury line (which is about $15-$20 million over the salary cap), has to pay a DOLLAR for DOLLAR tax on any amount over that line.

          Example:  Last year, the Lakers had a payroll of about $92 million and the luxury line was about $71 million.  This means last year, the team payed out $21 million in taxes back to the league. This means that if they sign player X to a $1 million dollar contract, they must pay an EXTRA $1 million in taxes.  This is why signing Derek Fisher for $5 million per season is troublesome.  In effect, they are paying $10 million to keep him around.

Q:  So what does this mean for the Lakers?

A: (1)  This means that the Lakers have already used part of their mid-level on Steve Blake (4 years/$16 Million).  Since this deal is done, they have about $1.7 million left from their mid-level exception to use on another player for next season.

    (2)  I believe the team used their bi-annual exception on Shannon Brown last year (though I'm not sure about this).  If this is true, they cannot use it again this year.

    (3)  The only other way that the Lakers can add talent to the roster is to sign players for the Vet's minimum or to trade with another team.  The way trades work, salaries have to match within 25% of each other to happen.  This means they can trade player X that makes $1 million only for another player that makes $750,000-$1.25 million.

    (4)  Finally, if they are trading with a team that is under the cap, the salaries don't need to match if the salaries leaving are higher than coming in.

          Example:  If the Lakers trade Vujacic ($5 million per) to a team $5 million UNDER the cap, then they don't need to take back $5 million in return.  Anything less than that will work.

Ok, so hope this helps clear up some issues.  Good luck blogging.