Best, worst salary-cap situations

The new CBA rules will have harsh effects for Lakers, Heat and Knicks

Originally Published: April 2, 2013
By Larry Coon | ESPN Insider
Dwight HowardRon Hoskins/NBAE/Getty ImagesDepending on what happens with Dwight Howard, the Lakers could be well over the luxury tax.

It's never too early to start thinking about NBA free agency, and what teams might be able to do this summer.

Even though the trade deadline fizzled this season, teams still took care of business -- the biggest deals were just done early. Oklahoma City started it off by moving James Harden to the Houston Rockets right before the season started (and in time to allow Houston to ink him to a max extension). Memphis followed up by orchestrating a three-way, six-player deal with Toronto and Detroit in early February, with Rudy Gay moving to the Raptors, Jose Calderon going to the Pistons and Tayshaun Prince shipping off to the Grizzlies. These moves dwarfed the biggest deadline deal: J.J. Redick moving from Orlando to Milwaukee.

On Monday, Amin Elhassan offered his Top 30 free agents by average annual value in the 2013 class. But which teams will be able to afford any of them?

More than ever, basketball reasons are now sharing the stage with business reasons when it comes to making deals. The new collective bargaining agreement really starts to bare its teeth next year, when the progressive luxury tax takes over for the meeker, dollar-for-dollar tax. Teams like the Los Angeles Lakers will be pining for the days when being $30 million over the tax line meant a $30 million tax bill; next year a team $30 million over the tax line will have to cut a check for a whopping $85 million.

Taxpaying teams can face additional obstacles in the form of reduced access to sign-and-trade transactions and exceptions like the midlevel and bi-annual, and in some cases a hard cap.

As a result, teams now are watching their finances closer than ever, and this concern is evident in the lack of significant deals at the trade deadline. Even the larger deals earlier this season were done with finances in mind -- for example, the small-market Thunder could scarcely afford to keep Harden at the maximum salary when they already had three players drawing eight-figure salaries.

So what lies ahead? We don't have firm values for next season's cap and tax levels yet (they're dependent on this season's revenues, which are largely dependent on which teams make the playoffs and how deep they go). At this point we can say the salary cap will be in the $58.5-60 million range next season, and the luxury-tax threshold will be somewhere in the $71.5-73 million range. This will put the apron -- the point at which teams have less access to exceptions and some teams are hard-capped -- at around $75.5-77 million.

These figures define salary ranges in which we can place the 30 teams:

The big spenders

Teams in this situation: Miami Heat ($86.5 million already committed for 2013-14), Brooklyn Nets ($85.6 million), Lakers ($79.6 million), New York Knicks ($77.6 million) and Chicago Bulls ($77.1 million)

Life below the tax line? A fond memory at best. Cap room? A pipe dream. These teams have hoarded expensive players and have massive payrolls to show for their efforts. As a result they are not only over the tax line, they are also above the apron -- the point at which further system restrictions take effect.


To read more about where teams stand relative to the salary cap, become an Insider today.

Larry Coon is the author of the NBA Salary Cap FAQ.