All franchises keep an eye on announcements of « salary cap » and « luxury tax ». They hope that the figures will not suffer too much from the crisis and thus not put them in financial danger.
However, some courses are in a better financial situation than others. This is the case in New York, which has cleaned up its payroll over the years and then racked up short contracts in 2019. The result: the Knicks could have more than $ 60 million to spend this fall.
This salary margin would also be useful for absorbing large contracts during transfers. This is what our colleagues at SNY think they know. The leaders would be ready to recover heavy contracts, which franchises no longer want, if this allows, at the same time, to add young talents or draft choices to their workforce.
Several franchises could want to downsize their workforce, to avoid paying the “luxury tax”, and this is where the Knicks would like to take advantage of it by skillfully negotiating with the teams concerned.
This would contrast with the philosophy of last season where the Knicks did not want to adopt this strategy, in order to avoid ending up with players who did not want to be in New York. But since then, due to the crisis, the situation has changed and the franchise has yet again had a disappointing season, still missing the playoffs.
– Salary cap : it is the payroll defined by the NBA. For the next season, it was advertised at $ 115 million. NBA franchises have the option of overriding it when extending their own players or through “exceptions.”
– Luxury tax : in the NBA, the salary cap is not strict, and the NBA allows the richest franchises to exceed the threshold set with a tolerance of around 20%. In this case, next year, franchises could normally have spent up to $ 139 million. Then, for every dollar spent above this cap, franchises must pay the “luxury tax” to the NBA. A kind of tax that can be very expensive, and candidates for the title usually pay tens of millions of dollars each year. An amount then returned to franchises, good students, who have not paid the “luxury tax”.
