NBA cap projection higher than thought

NEW YORK -- The New York Knicks and other teams hoarding salary-cap space for this summer's free-agent market received surprisingly good news Friday when they were told at the league's board of governors meeting that the 2010-11 cap is projected to be $56.1 million.

That figure was $2 million to $3 million more than most teams had been expecting and $5.7 million more than the league forecast last July as a worst-case scenario. For the Knicks, it ensures they will have enough cap space this summer to pursue two maximum-salary free agents and still have money leftover.

"That's a lot of money. That's good," said Knicks president Donnie Walsh, who attended the meeting to learn the result of the Knicks' draft position through a tiebreaker. New York lost the tiebreaker to the Clippers, and since Utah owns the rights to the Knicks' first-round pick, it slightly reduced the odds of the Jazz winning the draft lottery. The Knicks hold two second-round selections and will pick 38th and 39th overall.

Other teams with significant cap space that will be positively affected by Friday's news include the New Jersey Nets, Miami Heat, Washington Wizards, Chicago Bulls, Los Angeles Clippers and Minnesota Timberwolves.

Because of the worldwide economic downturn, the league warned teams in a memo last July to expect the salary cap for the 2010-11 season to be between $50.4 and $53.6 million. The cap for the 2009-10 season was $57.7 million.

The NBA players' union responded by threatening to file a collusion lawsuit if the league did not have a good-faith basis to predict such a precipitous drop.

A source close to several players said Friday's estimate of a $56.1 million cap "will compel" the union to take a harder look at a collusion case, exploring whether any players suffered financial harm last summer from the low cap projection, which was based on an expected 2.5 to 5 percent decline in basketball-related income.

If that avenue is pursued, it would have a major impact on the ongoing talks regarding a new collective bargaining agreement to replace the one set to expire in June 2011.

"A memo of this nature can have a chilling effect on the market for free agent and rookie signings," union director Billy Hunter said last July. "If it later turns out that the league did not have a good-faith basis for making these projections, the NBPA will pursue all available legal remedies, including a treble damages claim for collusion."

Hunter was not immediately available for comment Friday.

The NBA also told teams that the luxury tax threshold for next season should come in around $68 million, nearly $2 million lower than the threshold for the '09-10 season.

Chris Sheridan is an ESPN.com NBA senior writer.