The NBA salary cap will reportedly be lowered from its current $109.1 million before the 2020-21 season.
"There is so much uncertainty with the coronavirus pandemic, but one thing is for sure: the salary cap will be lowered, according to league sources," Marc Berman of the New York Post reported Saturday. "On the surface, that makes it advantageous to build around younger players on cheaper contracts."
Berman noted the situation could have a direct impact on the New York Knicks, who've been linked to Oklahoma City Thunder point guard Chris Paul since the hiring of new team president Leon Rose, who previously served as Paul's agent.
The 35-year-old Wake Forest product has one guaranteed season and a player option left on his four-year, $159.7 million contract, which includes a $41.4 million cap hit for 2020-21, per Spotrac.
"According to sources, with the pandemic creating an economic crisis for the NBA, teams might be eager to unload their giant contracts," Berman wrote. "Because the cap won't be as high, the luxury tax looms larger. OKC has been fearful of the luxury tax, having once dumped James Harden."
In March, NBA commissioner Adam Silver explained he was keeping tabs how the COVID-19 situation could hurt the financial outlook.
"It's too soon to tell what the economic impact will be," he told reporters. "We've been analyzing multiple scenarios on a daily if not hourly basis and we'll continue to review the financial implications. Obviously, it's not a pretty picture but everyone, regardless of what industry they work in, is in the same boat."
The NBA salary cap has only dropped twice—2002 and 2009—since its creation for the 1984-85 season, per RealGM.
Meanwhile, the league continues to explore options to complete the indefinitely delayed 2019-20 campaign. ESPN's Adrian Wojnarowski previously reported next season could start in December instead of October to accommodate a late finish to this year's playoffs.
NBA play has been halted since March 11. No official timetable for a resumption has been announced.