The NBA notified teams in a memo Wednesday that the projected salary cap will come in at $99 million, about $2 million less than estimates in April.
In addition, the luxury tax has been lowered from $121 million to a projection of $119 million.
This will squeeze some teams looking to create space to sign free agents when the negotiating period begins July 1.
The drop was caused by the number of playoff games being fewer than expected, as the recent postseason was dominated by lopsided series that were shorter than anticipated.
The salary cap is still increasing by about $5 million from last season, but it isn't growing as much as previously expected. At one point, the NBA forecast this season's cap to go as high as $108 million.
The league is still undergoing massive growth, driven by new television revenues. Between 2010 and 2015, the cap increased from $58 million to $63 million. It has grown by $36 million over the course of the past three years.