NBA, NBPA Agree To Salary Cap & Luxury Tax For 2021 Season

The NBA and NBPA reached an agreement in principle on adjustments to the Collective Bargaining Agreement which settles a number of issues leading into the 2020-21 season. Among those is the salary cap and luxury tax remaining flat at $109.140 and $132.627 million, respectively.

Moving forward, the salary cap will increase by at least 3%, but no more than 10% from the prior season. That will ensure the continued growth of the cap as the NBA pushes to return towards normal.

Though the luxury tax remains at the same level, the payment those teams will have to make will be reduced by the percentage that basketball-related income decreases.

This adjusted system will also be used to ensure the players and owners agreed-upon split of BRI. In the event player compensation were to exceed the players’ designated share in any season, necessary salary reductions beyond the standard 10% escrow would be spread across that season and potentially the following two seasons, subject to a maximum salary reduction in any season of 20%.

The adjustments also finalize a number of other dates. NBA free agency begins on November 20 with players officially able to sign contracts on November 22, but details on the full transaction window must still be worked out.

It is still unclear exactly when that will open, but it must happen before the NBA Draft takes place on November 18, meaning a couple of days earlier is most likely.

The NBA will embark on a 72-game season that will begin on December 22 with training camps opening December 1.

NBA reportedly faced up to $1 billion in losses

One reason that the NBA was so insistent on the 2021 season starting in December was the potential revenue losses that could have occurred had they waited until January. The NBA believes that they could have lost between $500 million and $1 billion had they pushed back the start of the season beyond December.

The players and NBPA were concerned over such a quick turnaround from the previous season, but ultimately the prospect of losing such a large amount of money was too much and the league ultimately got what they were hoping for.

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