You may have heard reports that the NBA Salary Cap is projected to increase to $63.2 million for the 2014-15 NBA Season. This is true; the NBA League Office sent out a memo to all teams indicating this projection. However, we will not know for sure what the Salary Cap will be set out for the 2014-15 NBA Season until sometime between July 1st and July 9th.
Last year, Larry Coon broke the news of the new Salary Cap on July 9th:
Cap just came out at $58.679 million.— Larry Coon (@LarryCoon) July 10, 2013
The reason we will not know the official numbers is because there is still basketball left to play. Once the NBA Finals finish up, the NBA accountants and lawyers will get together to calculate revenues less player benefits for the Season.1 This period of time is affectionately termed the July Moratorium, which is the beginning of Free Agency. Free Agents can negotiate with teams during this time and they can even agree to contract terms. However, the official contracts cannot be signed until July 10th so as to comply with the official Salary Cap for the 2014-15 NBA Season.
The Salary Cap is based off of Basketball Related Income (BRI), which accounts for gate revenues, concessions, a portion of luxury suites, etc. So in essence, we are waiting for the BRI for this season to give us Projected BRI (104.5% of Current BRI) that further determines (simplified form as we ignore escrow issues):
- Salary Cap (take 44.74% of Projected BRI, subtract Projected Benefits, and divide by 30)
- Luxury Tax (take 53.51% of Projected BRI, subtract Projected Benefits, and divide by 30)
- Maximum Salary (either 25%, 30%, or 35% of: 42.14% of Projected BRI, subtract Projected Benefits, and divide by 30)
Without knowing all of the above, it is difficult to give a complete forecast of the Atlanta Hawks' offseason options. Practically, the quantitative analysis will change but the qualitative assessment will remain the same. Or in other words, the actual BRI is not likely to be far enough away from the NBA's current estimate of BRI to change our analysis.
Over the next few weeks, we will detail the Salary Cap situation for the Hawks this offseason. From those currently under contract, to our current free agents (did you know Elton Brand could have the ability to veto trades next season?), and all the way to the rights of 2nd round draft picks of yesteryear. We've also got you covered for potential sign-and-trades or Danny Ferry's ability to use Mid-Level Exceptions.
1. It is not only revenues and benefits but also accounting for salaries that have been held in escrow. This is to ensure that the players do not receive more than their guaranteed percentage of BRI for the year in the form of salaries and benefits.↩