What Is Cap Space in the NBA?

If you’re a basketball fan, you’ve probably heard the term “cap space” thrown around a lot. But what exactly is it? Cap space is the amount of money that a team has available to spend on player salaries. It’s basically a way to measure how much a team can afford to pay its players.

The salary cap is set by the NBA each year, and it varies depending on league revenue. For the 2019-2020 season, the salary cap is $109

Definition of Cap Space

Cap space is the amount of room a team has under the salary cap to sign free agents or make trades. A team with a lot of cap space can sign multiple free agents or make a big trade. A team with little or no cap space can only sign free agents to minimum contracts.

The NBA’s salary cap

The NBA’s salary cap is a soft cap, meaning that there are certain exceptions that allow teams to exceed the salary cap. The most common exception is the “mid-level exception,” which allows teams to sign a free agent for up to the average NBA salary (roughly $5.6 million for the 2019-20 season). Teams can also use their “bi-annual exception” to sign a free agent for up to $3.6 million, though this exception cannot be used in consecutive seasons.

How cap space is calculated

In order to create cap space, a team must be under the salary cap. The salary cap is determined by the NBA and is recalculated each year based on league-wide Basketball Related Income (BRI). The cap for the 2020-21 season has been set at $109.1 million.

To calculate a team’s cap space, we start with the team’s total committed salary for the upcoming season. This includes all player salaries, any amounts paid to players no longer on the team (like dead money), and any other guaranteed money owed to players (like bonuses). We then subtract this number from the salary cap to get the team’s available cap space.

For example, let’s say a team has $100 million in committed salaries for next season and the salary cap is set at $109.1 million. This team would have $9.1 million in available cap space.

If a team is over the salary cap, they can still create cap space by making trades or waive/stretch players.

Uses of Cap Space

Every NBA team has a “cap space” which is the amount of room they have under the salary cap to sign new players. This space is important because it allows teams to add new talent to their rosters. Cap space can also be used to re-sign current players or to offer them contract extensions.

Signing free agents

The most common use of cap space is to sign free agents. A team that is over the salary cap can only sign a free agent to the mid-level exception or for the minimum salary. A team with cap space can sign a free agent for any amount up to the salary cap.

Another use of cap space is to absorb a player in a trade. If a team trades for a player who makes more than the traded player exception, they must have enough cap space to absorb his salary.

Cap space can also be used to give a team more flexibility in future years. A team can sign players to shorter contracts and use their cap space in future years when those contracts expire.

Making trades

Teams can use cap space to take on salaries in trade without having to send equal salaries back out. This is sometimes informally referred to as “trading for cap space”. It can also be used in sign and trade deals, where a soon-to-be free agent is first signed by his current team using cap space, and then immediately traded to another team. A team that is over the salary floor may trade for a player in order to bring them up to the minimum team salary, which would increase their spending and help them avoid penalties.

Implications of Cap Space

Cap space is the amount of money a team has to spend on player salaries for the upcoming season based on the NBA’s salary cap. This season, the NBA’s salary cap is $109 million. A team that is “under the cap” can spend up to that amount on player salaries. A team that is “over the cap” can still sign free agents, but they may have to pay a luxury tax.

For teams

In order to create a successful team, general managers have to juggle a lot of different factors. One of the most important is cap space. Cap space is the amount of money that a team has under the salary cap to sign new players.

If a team has a lot of cap space, they can sign multiple high-priced free agents or trade for expensive players. This can help them build a contending team quickly. However, if a team doesn’t have much cap space, they may have to overpay for players or settle for less talent.

Cap space can also be used as a trade commodity. If a team has more cap space than they need, they can offer it to another team in exchange for players or draft picks. This can be helpful for teams that are trying to rebuild or shed salary.

For players

The most immediate implication of cap space is that a team can sign a player to a contract without having to worry about going over the salary cap. If a team has $10 million in cap space, it can sign one or multiple players to contracts worth up to $10 million combined without having to make any corresponding moves (e.g. trades, releasing players).

Another key implication of cap space is that it gives teams more flexibility in trade negotiations. If two teams are trying to work out a trade and one team has cap space while the other does not, the team with cap space will have an advantage because they can absorb more salary without having to make additional moves.

Lastly, having cap space can be helpful in attracting free agents. Players often prefer signing with teams that have cap space because they can sign for more money than they would be able to if the team was over the salary cap.

Conclusion

We hope you’ve enjoyed this quick primer on NBA cap space. To sum things up, cap space is the amount of money that a team can spend on player salaries in a given year. The salary cap is set by the NBA each year and acts as a spending limit for all teams. A team can create cap space by trading away players, releasing players, or retiring players. Once a team has created cap space, they can use it to sign free agents, make trades, or extend the contracts of their own players.