Impending NBA Money Crunch May Bite Trail Blazers

Impending NBA free agents are bracing for what is expected to be a disastrous market this summer, the aftermath of the historic salary boom in the summer of 2016. The NBA Salary Cap, which has surged over the last two seasons, will start to flat line this summer. It’s projected to rise just $2 million, to $101 million total. Where past free agents cashed in on the exponential rise, the next set of contract-seekers will suffer as a result. This includes Portland Trail Blazers free agents Jusuf Nurkic, Shabazz Napier, Pat Connaughton, Noah Vonleh, and Ed Davis.

ESPN’s Brian Windhorst and Bobby Marks explain the looming financial crisis:

Smart and Nurkic aren’t alone. It’s always hard to be a restricted free agent, but even unrestricted free agents this summer -- players such as Avery Bradley, Isaiah Thomas, DeAndre Jordan, Lou Williams and Will Barton -- will likely find things dramatically different than just a couple of years ago when teams handed out a billion dollars in just 24 hours.

These situations illustrate a fast-changing NBA economic climate that is already showing up as teams dig into trade deadline maneuvers. The bull market that surged in the league in 2016 and 2017 is giving way to a bear market. The league is about to face a cash crunch.

It’s possible that Nurkic will receive a contract worth less than the team’s current third-string center, Meyers Leonard, whose contract renewed in the Summer of 2016.

Teams looking to unload salary, such as the Trail Blazers, are also in a difficult position. Windhorst and Marks spoke with an anonymous GM on the situation:

“The trade market is mostly sellers right now,” one general manager said. “There’s only a few buyers. Looking at everyone’s books, I don’t think that’s going to change much this summer.”

The threat of luxury tax penalties and lack of teams with adequate cap space play into the disparity. According to the ESPN report, an average of five teams per year since 2012 have paid the league’s luxury tax, which heavily penalizes teams financially for exceeding the salary cap by a predetermined amount. Twelve teams are projected to pay the tax next season, with a handful of others are encroaching on it. When the books are tallied, half of the league may end up paying luxury tax penalties.

Some of those teams will be looking to unload salary to avoid the tax, but only seven teams currently hold $10 million or more in cap space. Per the report:

“There are going to be a lot of teams who are looking to move money,” a general manager said. “And there aren’t many places for it to go. So it will be hard to offload salary, and if you want to, the teams with space will probably charge high prices to take money from your books.”

If this analysis bears up, it won’t be easy for Portland to trade the likes of Leonard or Evan Turner, and doing so will come at a great cost. If nothing changes, the Blazers are in for tough financial times ahead, pain that won’t ease up until the contracts that keyed the crisis expire.