Sources: NBA teams planning for scenario in which salary cap could drop due to situation with China

At least five NBA teams are having their salary cap personnel plan for a scenario in which the cap for the 2020-21 season could drop between 10 and 15 percent due to the current situation between the NBA and China, league sources told Yahoo Sports.

This is part of the teams’ regular seasonal planning, but "it's like the cap spike, but opposite,” a league source told Yahoo Sports. “After all the money everyone spent last summer, this would have a major impact on all of us."

Last month, the NBA released an updated cap projection of $116 million for the 2020-21 season. That projection is nearly $7 million higher than the figure of just over $109 million for the current season.

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A drop of 10 to 15 percent would be somewhere between $11.6 million and $17.4 million off the current projection. A drop in the cap would also impact the starting figures for maximum salary contracts, which range from 25 to 30 to 35 percent of the cap. It would also impact various exceptions and the rookie scale contracts, which rise or fall by the same percentage as the cap does.

The Chinese flag is never far in the NBA's flagship retail store in Beijing. (Photo by Kevin Frayer/Getty Images)
The Chinese flag is never far in the NBA's flagship retail store in Beijing. (Photo by Kevin Frayer/Getty Images)

Scenario planning is a normal but major part of the process for NBA front offices. Every team has a dedicated salary cap expert, and some have as many as two to three people involved in the process. It’s not uncommon for team salary cap personnel to estimate different changes in the cap from the league’s official projection in an effort to cover all possible scenarios. A 10-to-15 percent drop would be quite a change, however.

One team’s cap expert told Yahoo Sports: “I haven’t really been in this spot before. The cap has only gone up in recent years. It’s really different. I have to wonder if the league would be pressed to consider some measures to not drop the cap down so far from where we are today at $109 [million]. Otherwise, a bunch of us are over the tax. It’d be nice to know now, because that changes how we approach trades and everything else throughout the season.”

As it stands with today’s $116 million projection, just eight teams project to have cap space in the summer of 2020. These projections range from $16.4 million to $78 million in space. A drop of even $11 million would remove several teams from being spenders this summer. In addition, a handful of teams that currently don’t project to be taxpayers could find themselves unexpectedly over the luxury tax line.

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