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Brooks Wilson's Economics Blog: The NBA Salary Cap

Wednesday, July 8, 2009

The NBA Salary Cap

The bad economy is affecting the NBA. ESPN reports in "2010 cap may limit signings," (July 8, 2009) that the NBA will lower its salary cap and luxury-tax threshold.

In a memo announcing next season's salary cap and luxury-tax threshold, sent out shortly before the league's annual July moratorium on signings and trades was lifted at 12:01 a.m. Wednesday, NBA teams also received tentative projections from the league warning that the cap is estimated to drop to somewhere between $50.4 million and $53.6 million for the 2010-11 season.

The official league memorandum, obtained by, forecasts a dip in basketball-related income in the 2009-10 season of 2.5 percent to 5 percent, which threatens to take the 2010-11 cap down some $5 million to $8 million from last season's $58.7 million salary cap.

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