Dissecting 2024-25 NBA Season's projected $141 million salary cap and impact on all kinds of contracts

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The NBA salary cap has increased to $141 million. (Getty)

In January, the NBA projected its potential salary cap for the 2024-25 NBA season to be about $142 million. With recent reports confirming it to be $141 million, the figure represents a 3.66% annual increase for the previous year, when the salary cap was $136 million.

Still, there are multiple outlined ways in which the new salary cap is set to impact all kinds of player contracts, impacting the overall financial threshold that NBA teams can play around with.

First and foremost, we see the Luxury Tax threshold increase from around $165 million to more than $171 million, with similar rises resulting in minimum team salaries and team aprons:

  • Luxury Tax Threshold: Rising from $165.294 million to $171.315 million.
  • First Apron: Increasing from $172.346 million to $178.655 million.
  • Second Apron: Going up from $182.794 million to $189.485 million.
  • Minimum Team Salary: Climbing from $122.418 million to $126.900 million.
  • Tax Bracket Size: Expanding from $5 million to $5.183 million.

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The above thresholds give teams considerable wiggling room as they attempt to structure their rosters for the new season. The changes will also positively impact the minimum and maximum salaries for players, which will be proportional to the player’s years of service for the team.

Conceptualizing the impact of the increase in NBA Salary Cap

Maximum Salaries by Years of Service (YOS)

0-6 Years of Service:

  • 2023-24: $34,005,250
  • 2024-25: $35,250,000

7-9 Years of Service:

  • 2023-24: $40,806,300
  • 2024-25: $42,300,000

10+ Years of Service:

  • 2023-24: $47,607,350
  • 2024-25: $49,350,000

Minimum Salaries by Years of Service (YOS)

0 Years of Service:

  • 2023-24: $1,119,563
  • 2024-25: $1,160,544

1 Year of Service:

  • 2023-24: $1,801,769
  • 2024-25: $1,867,722

2 Years of Service:

  • 2023-24: $2,019,706
  • 2024-25: $2,093,637

3 Years of Service:

  • 2023-24: $2,092,354
  • 2024-25: $2,168,944

4 Years of Service:

  • 2023-24: $2,165,000
  • 2024-25: $2,244,249

5 Years of Service:

  • 2023-24: $2,346,614
  • 2024-25: $2,432,511

6 Years of Service:

  • 2023-24: $2,528,233
  • 2024-25: $2,620,778

7 Years of Service:

  • 2023-24: $2,709,849
  • 2024-25: $2,809,042

8 Years of Service:

  • 2023-24: $2,891,467
  • 2024-25: $2,997,308

9 Years of Service:

  • 2023-24: $2,905,861
  • 2024-25: $3,012,229

10+ Years of Service:

  • 2023-24: $3,196,448
  • 2024-25: $3,313,453

Moving on, a similar impact is expected in various spending exceptions that teams have to adhere to. The information is conceptualized in tables below:

Non-Taxpayer Mid-Level Exception (NTMLE)

Season

Amount

2023-24

$12.405M

2024-25

$12.859M

Taxpayer Mid-Level Exception (TMLE)

Season

Amount

2023-24

$5M

2024-25

$5.183M

Room Mid-Level Exception (RMLE)

Season

Amount

2023-24

$7.723M

2024-25

$8.006M

Bi-Annual Exception (BAE)

Season

Amount

2023-24

$4.516M

2024-25

$4.681M

Expanded Traded Player Exception (ETPE)

Level

2023-24

2024-25

1

200% + $250,000 ($1-$7.25M)

200% + $250,000 ($1-$7.525M)

2

Flat $7.5M ($7.25M-$29M)

Flat $7.775M ($7.525M-$30.1M)

3

125% + $250,000 ($29M+)

125% + $250,000 ($30.1M+)

Cash Allowed in Trades

Season

Amount

2023-24

$7.005M

2024-25

$7.261M

Hence, while the overall increase in the salary cap might be minimal, it is set to result in a variety of consequences for every NBA team’s financial considerations. Right from trades to the minimum salaries that teams have to offer to their rookies, NBA teams will see a considerable increase in wiggling room as they embark on the delicate process of conceptualizing players’ salaries.

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Edited by Rajdeep Barman
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