By Peter Brennan
It’s bad enough that the coronavirus stoppage in play is costing every sports team millions of dollars.
For the Sixers, there is an added time bomb:
The salary cap for 2020-21 will doubtedly dip, which will exacerbate that salary tax bill, as Forbes.com points out.
The league bases its salary cap upon the projected amount of basketball-related income (BRI) for the upcoming season, and it typically uses BRI from the previous season as a baseline. Since the ongoing shutdown figures to significantly affect 2019-20 BRI, the NBA and the National Basketball Players Association could instead agree to throw out that baseline and set the cap using an actual projection of 2020-21 BRI. But if they don’t, a 2020-21 salary-cap decline of “$10 million to $15 million is not outside the realm of possibility,” according to Bleacher Report’s Ken Berger.
The Sixers already have nearly $114.9 million in guaranteed salaries on their books next season, and they figure to pick up cheap team options for Furkan Korkmaz ($1.8 million) and Norvel Pelle ($1.5 million). That alone would put them at nearly $118.2 million, or $3.2 million over the projected $115 million salary cap and only $20.8 million below the projected $139 million luxury-tax threshold.
That $118.2 million figure doesn’t even take into account All-Star point guard Ben Simmons, who signed a five-year max extension this past July. The value of that extension is based on a percentage of the salary cap, so the Sixers may end up getting a significant discount on Simmons if the cap plummets in 2020-21.
If the cap does decline to this extent, it could influence the Sixers’ team-building strategy moving forward. Since the tax rate rises substantially as teams go further over the threshold, an increasingly bloated luxury-tax bill might cause the Sixers to rethink bringing back their entire starting five next season. It could affect their willingness to spend the taxpayer mid-level exception or keep OKC’s first-round pick, too.