Message Board
NBA en espanol
NBA Draft
2003 playoffs
2003 All-Star Game
Power Rankings
NBA Insider

ESPN Auctions
Tuesday, July 15
Updated: July 16, 2:41 PM ET
Free agents to benefit from cap increase

Associated Press

Tax Time
With the luxury-tax threshold at $52.9 million, at least half of the NBA will be paying a dollar-for-dollar tax for spending more than that on team payroll last season. Taxes paid will exceed $170 million, according to Dan Rosenbaum, an economics professor at UNC-Greensboro who is considered one of the foremost authorities on the NBA's luxury tax.

The Portland Trail Blazers, whose payroll exceeded $100 million, will pay more than $50 million in taxes, according to Rosenbaum. The New York Knicks, with the second-highest league payroll, will pay about half of that amount. The Dallas Mavericks and the Sacramento Kings will pay between $15 million and $20 million, while the Philadelphia 76ers -- who round out the top five -- figure to be charged more than $10 million.

Did the World Champion San Antonio Spurs get it right off the court as well? The Spurs payroll falls within thousands of the $52.9 million threshold, meaning that if they have to pay a luxury tax, it will only be a nominal fee. The New Jersey Nets, who won two games in the NBA Finals, will be assessed at least a $6 million bill, according to Rosenbaum.

"There's a lot of money going around," Rosenbaum said.

Those with the most to gain from the luxury tax payouts are the owners of the teams that didn't exceed the threshold. Those owners will receive a greater portion of the distribution of funds.

-- Darren Rovell, sports business writer

NEW YORK -- The NBA salary cap for the 2003-04 season will be almost $44 million, a jump of about 9 percent from last season.

The league and the players' union released the new figure Tuesday night on the eve of the expiration of a moratorium on free agent signings. Their financial calculations showed the average salary to be $4.917 million, which will become the starting salary for any free agent signed to the full mid-level exception.

The new salary cap figure of $43.84 million is the highest in NBA history.

A year ago, the figure dropped from $42.5 million to $40.27 million _ the first drop since the salary cap system was adopted for the 1984-85 season.

The salary cap represents the maximum amount of payroll a team can spend on player salaries. It is known as a ``soft'' cap, however, as teams are allowed to use several exceptions to exceed that figure.

Teams whose payrolls exceeded $52.9 million last season will have to pay a dollar-for-dollar luxury tax on the overage. All luxury tax money will be pooled and redistributed to teams below the threshold under a formula to be determined by the league's Board of Governors.

The players' union said it expected next season's tax threshold to be $57 million.

The cap of $43.84 million will raise the value of maximum salary contracts agreed to between Jason Kidd and the New Jersey Nets, and Jermaine O'Neal and the Indiana Pacers.

Kidd is eligible to earn a starting salary equal to 30 percent of the cap, or $13.152 million. With annual increases of 12.5 percent, his deal will be worth a total of $103.67 million -- an increase of more than $5 million from previously reported figures.

The cap has increased by an average of 8.5 percent during the current collective bargaining agreement, rising from $26.9 million in 1997-98 to the current level.

The 2003-04 minimum team salary, set at 75 percent of the salary cap, will be $32,880,000.

 More from ESPN...
Orlando denied salary-cap exemption for injured Hill's Marc Stein reports ...

 ESPN Tools
Email story
Most sent
Print story
Daily email