NBA Reportedly Alerting Teams of Possible Drop in Salary Cap, Luxury-Tax Level

The NBA could have a lower salary cap and luxury-tax threshold for the 2020-21 season than originally projected.

According to ESPN's Adrian Wojnarowski and Bobby Marks, the NBA "has alerted teams to the impending release of adjusted 2020-2021 salary and luxury-tax projections, signaling the likelihood that a decline in revenue will cause a drop in the figures."

Wojnarowski and Marks pointed to the loss of China-driven revenue that the league has relied on in the past as a reason why the the cap projection of $116 million could drop to as low as $113 million.

Wojnarowski noted this will still be an increase from this season's $109.1 million cap.

The league's relationship with China was a major talking point after Houston Rockets general manager Daryl Morey tweeted his support of Hong Kong protesters back in October.

Among the ramifications were canceled activities in the country, the Chinese Basketball Association suspending its relationship with the Rockets and Los Angeles Lakers star LeBron James drawing criticism for his response to Morey's tweet.

According to Wojnarowski and Marks, the NBA lost between $150-200 million when China pulled sponsorships and television coverage of the league in response to Morey's tweet.

While the salary cap impacts free-agency decisions and the value of maximum contracts, the luxury-tax threshold will affect those teams over that number.

Wojnarowski and Marks noted the Boston Celtics, Brooklyn Nets, Golden State Warriors, Rockets and Philadelphia 76ers are expected to find themselves in that category in 2020-21, when the projected figure of $141 million could actually be $138 million.

The NBA could distribute the new projections as soon as Thursday, which would give teams time to adjust accordingly prior to the Feb. 6 trade deadline.