Just last month the NBA was projecting a $7 Million increase in their league’s salary cap for next year. This month, in the aftermath of Daryl Morey’s tweet about China and Hong Kong, some teams are already preparing for a ten to fifteen percent drop in the league’s current $116 Million cap. The drop could be $11.5 to $17.5 Million for the 2020-21 season, and it likely to cause a reaction from the Players’ Association since it was a team official that directly caused the issue.
According to Yahoo Sports, as many as five NBA teams are planning for the Doomsday Scenario of seeing the salary cap drop next season as the 2019-20 season is about to begin. “After all the money everyone spent last summer, this would have a major impact on all of us,” an unnamed NBA team official told Yahoo.
The dent in the salary cap would affect every level of NBA player since max-contracts are a percentage of the league-wide salary cap, and the rookie pay scale also rises, or falls, based upon the annual change in the salary cap. Based upon what this year’s cap number is, only eight teams would enter the 2020-21 offseason under the cap; so if the cap number is cut, even less teams would be able to spend much, if anything, on players next summer. So far, at least, there has been no reaction from the NBA Players’ Association; however, if the league is smart, they have keeping the channels of communication open and the union abreast of new developments.
Adam Silver drew a line in the sand this week when it told the world that he would not take away the freedom of speech that NBA players and employees have. As a result, Chinese companies are pulling out of their advertising deals with teams and the league, which is what is causing this salary cap panic. Silver pointed out that freedom of speech was a bigger issue than money was, and in a vacuum he is right; however, if teams and players start to see a noteworthy drop in revenues and salaries, will Silver be pressured to take action? After his strong words this week, whatever action he might take may fall upon deaf ears after the Chinese government rejected Silver’s defense of Daryl Morey and his pro-Hong Kong tweet that sparked this firestorm.
You can’t backtrack across a bridge that has already been burned, which means that Adam Silver might have just closed the Chinese market for the NBA; however, I don’t necessarily think in the long-term that’s a bad thing. In the short-term, however, clearly there are teams worried that revenues from the Chinese cash cow will be gone, meaning that a lot of millionaires will be mad at Adam Silver over the next year. How strong the commissioner’s resolve is remains to be seen; however, backtracking has never been in his vocabulary before, and I don’t think an issue like this is going to add it. So my advice for all NBA teams is that they prepare for the worse short-term, because as Commissioner Silver said, there are somethings that don’t have a price tag, and freedom of speech clearly is one of those things in the NBA.