Ever since the NBA suspension was put in place two months ago, the league has reportedly been discussing various measures to reduce the long-term effects of the hiatus. Recent reports focused on the NBA salary cap, which will most likely be reduced next season. While the uncertainty around the current season remains, the 2020 NBA free agents are highly likely to be affected by the lowered salary cap.
Recent reports state that the NBA salary cap will be reduced from the current $109.1 million before the start of next season. Where there is a lot of uncertainty surrounding the league amidst the pandemic, the salary cap is highly likely to be reduced considering the financial ramifications of the lost revenue. Reports also stated that it could help the league sign younger players on cheaper contracts.
There has also been speculation about players who could end up in free agency. The New York Knicks, who have been looking to sign OKC Thunder's star guard Chris Paul, could be affected by the lowered salary cap. Paul currently has one guaranteed season with the Thunder along with a player option on his $159.7 million contract. Reports hint at a possible $41.4 million cap hit for the upcoming season. Before the season was suspended, the NBA salary cap projection was reported to be $115 million. The pandemic could cause an economic crisis for the league, as a low salary cap means a higher luxury tax. Teams could then look to let go of their 'giant contracts', per NBA reports.
Many teams and agents had prepared for a bit lower projection, so there will be some encouragement with these 2020-2021 salary cap and luxury tax projections. Still, no figure will be finalized until numbers are officially calculated in late June.— Adrian Wojnarowski (@wojespn) January 30, 2020
After the suspension was announced, NBA commissioner Adam Silver talked about the pandemic and its financial consequences on the league. He stated that while there will definitely be an impact, it is too soon to analyse all the scenarios and give a proper estimate. The NBA salary cap has been lowered only twice in history (2002 and 2009). The concept of a salary cap was introduced during the 1984-85 season. The league is currently discussing options for the current season to resume. While venues like Disney World are being considered, no official statements have been made. The season could also resume in December instead of October, per ESPN reports.