Report: NBA's 2020-21 Salary Cap and Luxury Tax Expected to Drop Due to Decreased Revenue

The NBA's salary cap and luxury tax are expected to drop in 2020-21 due to decreased revenue.

The NBA has informed teams of salary cap and luxury tax projections for the 2020-21 season, according to ESPN's Adrian Wojnarowski.

Teams have reportedly been told that next season's salary cap will be $115 million, which jumps up from the $109.1 million cap in 2019-20. The luxury tax projection will be $139 million, according to Wojnarowski.

Multiple teams and agents reportedly prepared for a slightly lower projection and feel encouraged by the salary cap and luxury tax projections. No figures will be finalized until numbers are officially calculated in late June.

Earlier on Thursday, Wojnarowski and Bobby Marks reported the salary cap and luxury tax would decrease next season due to decreased revenue. The league office was expected to release revised projections to allow teams to make more informed decisions on their rosters and payrolls ahead of the Feb. 6 trade deadline. 

Several front office executives told ESPN that they had been anticipating potential changes after the loss of the NBA's revenue from China. They expected the original 2020-21 cap projection of $116 million could fall as low as $113 million. 

China pulled its sponsorships and television coverage after Rockets general manager Daryl Morey tweeted support for anti-government protestors in Hong Kong last October. According to ESPN, league sources estimate the NBA lost between $150 million and $200 million in revenue.

The released projections could impact free-agency cap space, luxury tax payouts and player contracts based on percentages of the salary cap. A lower cap and luxury tax could also affect teams' decisions this summer during free agency. The luxury tax was originally predicted to be $141 million.

A $3 million salary cap decrease could also affect the max salaries of players–including Philadelphia's Ben Simmons, Denver's Jamal Murray ($4.3 million) and Toronto's Pascal Siakam ($3.3 million)–whose contracts are tied to percentages of the cap.