The NBA salary cap’s enormous, unprecedented jump from $70MM in 2015/16 to $94.143MM in 2016/17 has received a ton of attention this summer, as free agents signed massive contracts that reflected the league’s new financial reality. In addition to allowing teams extra flexibility to sign and acquire players, that cap jump also significantly increased the luxury tax threshold for NBA franchises.
A year ago, clubs exceeding $84.74MM in total team salary were subject to tax penalties, but this year, that threshold has increased by nearly $30MM, to $113.287MM. The result? It has become a little more difficult for teams to spend so much that they surpass that threshold and get into tax territory. Still, a few clubs have managed to do it so far, and several others are getting close.
Those teams over or near the luxury tax line will surely keep a careful eye on their spending going forward, since tax penalties under the league’s current Collective Bargaining Agreement can be severe, particularly for repeat offenders. Our glossary entry on the subject features details on the specifics.
Here’s the full breakdown on teams over the tax threshold, or close to it:
Teams currently in the tax:
- Total team salary: $116,494,181
- Total guaranteed salary: $114,628,849
- There are avenues for the Cavaliers to get out of tax territory if they really want to, but the team doesn’t yet have a full roster and still expects to re-sign J.R. Smith, so odds are Cleveland’s tax bills will only get larger as the club’s payroll gets even higher.
- Total team salary: $114,740,032
- Total guaranteed salary: $114,740,032
- The Clippers have a full 15-man roster, so they shouldn’t have to add much more salary before the season — perhaps just modest partial guarantees for a few camp invitees. Assuming they stay within $2MM or so of the tax line, it will be interesting to see how the Clips approach the 2017 trade deadline. A cost-cutting deal or two could could the club out of the tax, but if L.A. is competing for a top spot in the West, it may be necessary to add a little salary to acquire another impact player.
Portland Trail Blazers
- Total team salary: $114,678,517
- Total guaranteed salary: $112,354,979
- No team has more money committed to its 2017/18 cap than Portland, which is on the hook for nearly $124MM in guaranteed money already. Since there’s a good chance the Trail Blazers will be over the tax threshold next year, the team may want to avoid that fate this year. The Blazers’ close proximity to the tax might be good news for someone like Tim Quarterman, who already has a partial guarantee on his contract and would be owed a very small rookie salary if he makes the team. Other back-of-the-roster players like Luis Montero and Grant Jerrett would have slightly larger cap hits and aren’t currently owed any guaranteed money, so those factors may improve Quarterman’s odds of earning Portland’s final roster spot.
- Note: The Blazers would sneak below the tax line by cutting Jerrett and Quarterman, or Jerrett and Montero. The team would remain in the tax if Montero and Quarterman are cut.
Teams currently near the tax line:
- Total team salary: $112,909,960
- Total guaranteed salary: $107,062,933
- Total team salary: $111,447,750
- Total guaranteed salary: $109,563,866
- Total team salary: $108,850,684
- Total guaranteed salary: $106,854,557
San Antonio Spurs
- Total team salary: $108,677,758
- Total guaranteed salary: $107,347,345
- Total team salary: $108,151,883
- Total guaranteed salary: $106,077,999
For most of the teams in this group, there will be little chance of sneaking into tax territory with in-season free agent signings, so they should be safe unless they take on salary in a trade. However, clubs the Grizzlies and Mavericks – who are inching closer to that tax line – will have to be careful about in-season signings. If those franchises have to waive multiple players on guaranteed salaries due to injuries and then sign replacements for those players, their team salaries could start to approach the tax threshold.
Salary information from Basketball Insiders was used in the creation of this post.