The NBA salary cap continues to rise, but front offices see it increasing at a slower rate than the league projected, driven by its new national television deals.
According to a report by Fred Katz and John Hollinger in The Athletic, the NBA’s salary cap is projected to rise by 6.7 percent for the 2027-28 season, about a one-point increase from an earlier projection of 5.5 percent, but still well off the 10 percent annual increases the league was forecasting following the introduction of its new national television deals worth $76 billion over 11 years.
The league is projecting a salary cap of $176 million for the 2027-28 season with a luxury tax line set at $213 million, The Athletic reports, citing NBA sources.
The slower-than-expected increases are being attributed to a sharp decline in local TV revenues as the regional sports network business collapses and many teams lose their once-lucrative local broadcast deals. This past year, the dissolution of Main Street Sports Group, owner of the FanDuel Sports Networks, left 13 NBA teams without a local broadcast partner for the upcoming season. Many of those teams have opted to take games to local, over-the-air affiliates. Others have decided to place local broadcasts on streaming services. Some have chosen a combination of both distribution methods.
But no matter what path teams choose, those forced off traditional regional sports networks have almost universally absorbed significant declines in local media revenue.
That, it seems, has been enough to slow the salary cap increase, since the cap is a function of overall league revenues.
Of course, this can impact teams’ roster building if they planned prior contracts around having more cap space to work with in future years. The silver lining for these teams, however, is that the updated projection is a tick higher than the league’s earlier figure.
Perhaps the NBA’s initial hope of 10 percent annual increases was a bit optimistic, but things could turn around as soon as next season, when the NBA hopes to package and sell an aggregated local broadcast streaming hub with a billion-dollar price tag. If the league’s plan succeeds, it may reach that 10 percent benchmark for cap increases in future seasons.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.