NBA Salary Cap

The NBA salary cap is the limit to the total amount of money that National Basketball Association teams are allowed to pay their players. Like many professional sports leagues, the NBA has a salary cap to control costs, defined by the league's collective bargaining agreement (CBA). This limit is subject to a complex system of rules and exceptions and as such is considered a "soft" cap.

The actual amount of the salary cap varies from year to year, and is calculated as a percentage of the league's revenue from the previous season. Under the CBA ratified in December 2011, the cap will continue to vary in future seasons based on league revenues. For the 2015–16 season, the salary cap was $70 million and the luxury tax limit was $84.74 million. For the 2016–17 season, the salary cap will be set at $94.14 million and the luxury tax limit will be $113.29 million. For the 2017–18 season, the latest projection is $102 million for the salary cap and $122 million for the luxury tax limit.

The NBA had a salary cap in the mid-1940s, but it was abolished after only one season. The league continued to operate without such a cap until 1984–85 season, when one was instituted in an attempt to level the playing field among all of the NBA's teams and ensure competitive balance for the League in the future. Before the cap was reinstated, teams could spend whatever amount of money they wanted on players, but in the first season under the new cap, they were each limited to $3.6 million in total payroll.

Under the 2005 CBA, salaries were capped at 57 percent of basketball-related income (BRI) and lasted for six years until June 30, 2011. The current 2011 CBA set the cap at 51.2 percent of BRI in 2011–12, with a 49-to-51 band in subsequent years.

To ensure the players get their share of the BRI, teams are required to spend 90 percent of the salary cap each year, the salary floor for the 2016–17 season will be 84.73 million.

In December 2016, the league and the players' union reached a tentative agreement on a new CBA, with both sides ratifying it by the end of that month. The new agreement will run through the 2023–24 season, with either side able to opt out after the 2022–23 season.

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