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Tuesday, July 21, 2009
The Giant Pool of Money


Posted by Kevin Arnovitz

With the cap number dropping by nearly $1 million for the 2009-10 season, it's not a surprise that overall spending on salaries will tick downward. Adam Reisinger of ESPN DB has been monitoring NBA spreadsheets closely. He's noticed that, cap number aside, teams are behaving much more conservatively as they fill out their rosters: 

What's interesting about these numbers is that spending is down, even relative to the reduced cap. If teams were to spend 122% of the cap, like they did last year, total league payroll would be $2.11B -- right now, we're about $77.6M short of that. Lamar Odom's eventual deal should take care of somewhere between 10 and 13 percent of that, but unless some other players sign Odom-like deals, spending WILL be down this year.

As seems to always be the story lately with the NBA, the situation gets more interesting if you look at next year. Going by the NBA's low end projection of a $50.4M cap, a league-wide payroll would be about $1.512B. Despite the decreased spending and desire to get under the cap for the hyped "Summer of 2010”, NBA teams are already over this mark as a group -- having committed to $1.564B in salaries for the 2010-11 season, including player and team options (or 103.45%).

Now, if every player were to decline his option and teams declined every option they had for 2010-11, then combined salaries would drop to $1.094B, or 72.4%. Of course, under that scenario, there would only be 161 players under contract, and teams would need to sign a combined 229 players just to get up to minimum roster requirements, so that scenario isn't likely. Still, it'll be worth keeping an eye on the percentage of contract obligations relative to the salary cap as the summer moves on, which is exactly what I'll be doing -- and what I'm sure the league office and most front offices are doing as well.

Taking next offseason into account, it's easier to understand why certain players -- Steve Nash, for instance -- are apt to get deals done today, rather than gamble with what might be an even more precarious climate next offseason as the salary pool shrinks yet again.