The salary cap doesn’t mean nearly as much as the salary floor. Plenty of teams spend far less than they can, focusing instead on spending what they must.
Under the proposed CBA, the spending that they must will go up.
Since 2011, teams were required to spend 89 percent of the cap, based on average spending over multiple years. The proposed deal bumps the floor to 90 percent, with the buckets applying to the first three years, the second three years, and the final four years of the deal. (This adds up to 10 years; as previously mentioned, it’s an 11-year deal.)
That’s only one percentage point. Based on a $200 million cap, the minimum expenditure is $180 million, versus $178 million under the existing deal. And that’s still $20 million that can be squirreled away by each team as raw profit.
The league-wide spending minimum remains at 95 percent at the cap, which means that regardless of what the individual teams do, 95 cents of every available dollar must be spent. Based on a $200 million cap for 32 teams, that’s $6.4 billion in total available spending. However, five percent of that can be hoarded — and that’s $320 million in money that teams don’t have to spend, and thus can instead keep in their coffers.
A salary cap is premised on the notion that, without it, teams would bankrupt themselves trying to buy dream teams. The simple reality is that the players’ cut of the broader pie remains limited by how much of that pie the teams ultimately choose to give them. Under the proposed CBA, the teams still can individually hold back 10 percent, and the league collectively can hold back five percent.