The NBA salary cap increased by about $6.9 million this offseason, the third-largest boost in cap history and about $100,000 shy of the largest increase.
But that’s nothing compared to what will happen the next two offseasons, when the cap is projected to go up by another $19 million each of the next two summers -- to a projected $89 million for the 2016-17 season and $108 million for 2017-18, thanks to the league’s new TV deal.
But while maximum contracts rise along with the cap in the coming years, and the middle class along with it, the rookie contracts for recently drafted players will put them under team control at under market rates through the 2018-19 season (first-round rookie deals are comprised of two guaranteed years and then two successive team option years). Thus the rookies who make an impact on the court will be the best bargains in the NBA.
For example, in 2017-18 the 2015 draft's first overall pick, Karl-Anthony Towns, will make $6.2 million (almost 6 percent of the projected cap), 10th pick Justise Winslow will make $2.7 million (2.5 percent of the cap) and 30th pick Kevon Looney will be making a mere $1.2 million (1 percent of the cap).
Rookie scale amounts are already set through the 2020 draft, so rookies drafted in 2017 will need to wait four years to enjoy the fruits of the increased cap. In fact, the No. 1 pick in 2017 is set to make $27.5 million over four years, the 10th pick $12 million in that time, and the 30th pick $6 million.
Lockout could alter rookie scale
Of course, that’s only if the current system is still in place for the 2017 draft picks, as both the players' association and the owners can opt out of the collective bargaining agreement after the 2016-17 NBA season, at which point the rookie contract system could be up for renegotiation.
However, future draft picks are an unrepresented party in labor talks. No current players will ever sign another rookie contract, obviously, so negotiating to pay future rookies more would only take money out of the pockets of the current constituency.
Keeping rookie salaries low is also great for owners, who will get the benefit of cheap rookie talent to supplement their rosters.
That could mean only agents will exert pressure for rookies to take home a slice of the projected 54 percent increase in the salary cap over the next two seasons.
What does this mean for the 2016 draft?
What we do know is that the rookie scale will stay intact for the 2016 draft, which could impact the behavior of teams and potential draftees given the labor uncertainty if they anticipate an increase in the rookie scale or a change in the way rookie contracts are negotiated the following year.
Players might be more apt to stay in school an extra year and take their chances with whatever might come of labor talks after the 2016-17 season. The downside for such a player is that it will take him a year longer to reach free agency and make the big bucks.
For teams, first-round draft picks could become more valuable knowing they will be getting those players at pre-cap explosion rookie prices while the salary structure of the rest of the league skyrockets.
With so many unknowns ahead on the labor front, teams that hit on their 2015 and 2016 draft picks will see their cap sheets reap the benefits.