For teams to be able to plan their moves, they need to have a salary cap projection. That's why the NBA is in constant communication with teams to let them know what the outlook is. For instance, a month ago, teams were notified that the projected cap for the 2020/2021 season is around $116 million. That means the NBA projected the cap would go up approximately $7 million compared to this season. Then Daryl Morey tweeted.
All basketball-related income is divided between the owners and players. Everything that was made gets split up, and the player's part is shared via salaries. Let's say $10 billion is made, and half of it goes to the players - that's $5 billion. Divide $5 billion with 30 teams, and you get $166 million per team - that would be the salary cap for a team in this scenario.
Rough estimates value the NBA's business in China at around $4 billion. With such a large amount of money at stake, the cap projections the teams received are under revision. Yahoo Sports reported that team cap experts are considering the possibility of a cap decrease between 10% and 15%. That would represent a decrease between $11.6 million and $17.4 million of the current projection.
This would not only take some teams out of the free-agent market (which isn't so appealing if we're honest), and reduce all contract levels (max contract, rookie scale, etc.) but a significant number of teams would suddenly be in luxury tax zone. (via 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.”
We're getting the first projections of how much principles and free speech would cost — looking forward to hearing the Players Union and Board of Governors on this.