Economy's Effect on NBA: A Lower Salary Cap

The anticipated drop of next year's NBA Salary cap due to the declining economy is going to be a real damper on the moves of some teams that were hoping to make a big splash in next year's free agent summer of 2010.

Just 15 months ago, the projected salary cap for the 2010-2011 NBA season was around $63 million. Now, reports are suggesting that the salary cap for that same season could be as low as $50 million, and at best, $53 million. That puts a $10-$13 million hole in the plans of teams that were hoping to make a big splash in free agency when players like Chris Bosh, Dwyane Wade, Amare Stoudemire and LeBron James become available next summer.

If an NBA team intended on needing $19 million to sign a player to maximum deal, and was anticipating on being at the $40-$44 million mark at the start of next summer, they are now going to be $10-$13 million short of the cap space they need to have.

And it's not as if every team can just get rid of another contract to rectify a lower than anticipated salary cap amount. Teams made moves last summer and throughout the NBA's regular season that were in anticipation of a $60 million salary cap mark in 2010. And the idea of unloading unwanted contracts in the NBA is like getting rid of that last 5 pounds-you could get rid of it in a short amount of time, but at what cost to your overall health?

This especially hurts the New York Knicks, who had plans to issue two max player deals in 2010 in order to lure LeBron James to Manhattan. However, if the salary cap is set at a mere $50 million next summer, the Knicks could only issue one maximum contract, and it's unlikely LeBron James would accept it knowing that the Knicks won't have much else in terms of talent to surround him with.

But the Knicks aren't the only team effected by the likelihood of a lower salary cap. The New Jersey Nets, Chicago Bulls, and Cleveland Cavaliers are among the teams that unloaded contracts this off season in order to make room for next summer. Not to mention, teams currently over the luxury tax line, which will drop along with the salary cap, will see the cost of being over that luxury tax go up by as much as $20 million. That's enough money to encourage a lot trades this season and next summer.

In the end, the only winners out of all of this are the teams that already have the players anticipated to be on the market next summer. The anticipated lower salary cap means there will be less buyers in the summer of 2010, making it a lot easier for teams to resign their superstars to maximum contracts. Thus, players like LeBron James, Dwyane Wade and Chris Bosh, might not be moving on afterall, which is exactly what the invention of the salary cap was designed to do.