NBA Projects 2026-27 Salary Cap To Increase By Only Seven Percent

[RealGM Wiretap]

The NBA released a memo to teams that the salary cap for the 2026-27 season is expected to increase by only seven percent. The maximum allowed increase under the current collective bargaining agreement is 10 percent, which many teams were projecting it to increase by.

The lower than anticipated projected increase has significant luxury tax and apron ramifications for many teams.

The 2025-26 salary cap has been set at $154.647 million.

Via Bobby Marks/ESPN

[Luv those Knicks]

Not a huge difference, but to teams close to the cap or close to one of the aprons, this matters some.

If it's 7% not 10%, the 2nd Apron going into the 2026 season will be 222.2, not 228.6, so 6.4 million less to work with for teams like my Knicks (provided my math is right). That's not a death blow, but it's a restriction they'll have to work under if they make a move or want to resign a key player next off-season. Mikal Bridges perhaps.

[Cassius]

Again, other than stopping KD from being a coward, why is cap smoothing a good idea?

[Luv those Knicks]

Again, other than stopping KD from being a coward, why is cap smoothing a good idea?

Cap smoothing is essential. Without it, when a new TV contract is signed, revenues would bump by like 20%-30%, which happened once year. It's not fair to the players who were free agents the year before. It's too feast or famine. The smoothing settles that. It also helps teams plan long term.

I think it's one of the decisions that the players and owners agreed on.

[Cassius]

Again, other than stopping KD from being a coward, why is cap smoothing a good idea?

Cap smoothing is essential. Without it, when a new TV contract is signed, revenues would bump by like 20%-30%, which happened once year. It's not fair to the players who were free agents the year before. It's too feast or famine. The smoothing settles that. It also helps teams plan long term.

I think it's one of the decisions that the players and owners agreed on.

I feel you, but what about the players who were extension eligible last year? There are plenty of players who aren’t FA, but would have benefited from last years’ hypothetical 20% spike.

I just don’t think you can have a second apron AND cap smoothing. Either let teams spend as much as they need to keep their guys, or let the cap (and the aprons) rise organically. It’s too much of a rock and a hard place.

[Luv those Knicks]

Again, other than stopping KD from being a coward, why is cap smoothing a good idea?

Cap smoothing is essential. Without it, when a new TV contract is signed, revenues would bump by like 20%-30%, which happened once year. It's not fair to the players who were free agents the year before. It's too feast or famine. The smoothing settles that. It also helps teams plan long term.

I think it's one of the decisions that the players and owners agreed on.

I feel you, but what about the players who were extension eligible last year? There are plenty of players who aren’t FA, but would have benefited from last years’ hypothetical 20% spike.

I just don’t think you can have a second apron AND cap smoothing. Either let teams spend as much as they need to keep their guys, or let the cap (and the aprons) rise organically. It’s too much of a rock and a hard place.

That's a solid argument. This off-season looks worse than last off season for free agents, though I've not looked at the numbers in depth, but a lot of team are up near the cap right now, so I think this off-season is bad. Last off-season maybe as too, I don't remember, though I remember some pretty solid contracts last year.

I think the NBA wants to avoid 2% or 3% increases, and 15% or 20% increases (I think the increase was 30% one year a while back after signing a new TV deal). 30%, then 3%, 2%, 3% feels wrong. 10%, 10%, 10%, 7% feels better. Though no system is going to be perfect and teams are going to spend unevenly, so no two off-seasons will be the same.

So, I'm still in favor of smoothing, though many teams near the cap or near the aprons and the restrictions of the aprons does put a squeeze on some players hitting free agency.

I'm open to alternative suggestions.

[Cassius]

Cap smoothing is essential. Without it, when a new TV contract is signed, revenues would bump by like 20%-30%, which happened once year. It's not fair to the players who were free agents the year before. It's too feast or famine. The smoothing settles that. It also helps teams plan long term.

I think it's one of the decisions that the players and owners agreed on.

I feel you, but what about the players who were extension eligible last year? There are plenty of players who aren’t FA, but would have benefited from last years’ hypothetical 20% spike.

I just don’t think you can have a second apron AND cap smoothing. Either let teams spend as much as they need to keep their guys, or let the cap (and the aprons) rise organically. It’s too much of a rock and a hard place.

That's a solid argument. This off-season looks worse than last off season for free agents, though I've not looked at the numbers in depth, but a lot of team are up near the cap right now, so I think this off-season is bad. Last off-season maybe as too, I don't remember, though I remember some pretty solid contracts last year.

I think the NBA wants to avoid 2% or 3% increases, and 15% or 20% increases (I think the increase was 30% one year a while back after signing a new TV deal). 30%, then 3%, 2%, 3% feels wrong. 10%, 10%, 10%, 7% feels better. Though no system is going to be perfect and teams are going to spend unevenly, so no two off-seasons will be the same.

So, I'm still in favor of smoothing, though many teams near the cap or near the aprons and the restrictions of the aprons does put a squeeze on some players hitting free agency.

I'm open to alternative suggestions.

Yeah, you’re probably right. I should probably have disclosed my inherent distrust of team ownership, and their increased propensity/ability to siphon revenues away from BRI, the more predictable the increases become.

[Luv those Knicks]

I feel you, but what about the players who were extension eligible last year? There are plenty of players who aren’t FA, but would have benefited from last years’ hypothetical 20% spike.

I just don’t think you can have a second apron AND cap smoothing. Either let teams spend as much as they need to keep their guys, or let the cap (and the aprons) rise organically. It’s too much of a rock and a hard place.

That's a solid argument. This off-season looks worse than last off season for free agents, though I've not looked at the numbers in depth, but a lot of team are up near the cap right now, so I think this off-season is bad. Last off-season maybe as too, I don't remember, though I remember some pretty solid contracts last year.

I think the NBA wants to avoid 2% or 3% increases, and 15% or 20% increases (I think the increase was 30% one year a while back after signing a new TV deal). 30%, then 3%, 2%, 3% feels wrong. 10%, 10%, 10%, 7% feels better. Though no system is going to be perfect and teams are going to spend unevenly, so no two off-seasons will be the same.

So, I'm still in favor of smoothing, though many teams near the cap or near the aprons and the restrictions of the aprons does put a squeeze on some players hitting free agency.

I'm open to alternative suggestions.

Yeah, you’re probably right. I should probably have disclosed my inherent distrust of team ownership, and their increased propensity/ability to siphon revenues away from BRI, the more predictable the increases become.

Cap Smoothing doesn't take away share of revenue, because the excess money is shared among the players. If Revenue increases by 13% and the cap by 10%, that extra 3% is distributed according to BRI divisions. The owners might be hiding money in other ways. I know that with baseball this is an issue, particularly revenue associated with computer games, and MLB and the Players union disagree on how that revenue should be shared. Perhaps other ways as well, but the baseball union has resisted a salary cap and asking for a guaranteed share of revenue on top of no salary cap doesn't please the owners. They'd want something in return.

I'm less on top of the basketball disagreements. They seem less hostile than the baseball disagreements, which could lead to a work stoppage during the upcoming negotiations.