How is the salary cap set each year?
Each July the league projects Basketball Related Income (BRI) and benefits for the upcoming season. They take a defined percentage of projected BRI (see the chart below), subtract projected benefits (about $112 million in 2005-06), and make adjustments based on whether the previous season’s BRI was above or below projections. They then divide by the number of NBA teams (except expansion teams in their first two seasons) to arrive at the cap. The salary cap adjusts each year on the first day following the July Moratorium (see question number 90). Note that adjusting based on whether the previous season’s BRI was above or below projections creates a pattern where the salary cap increases significantly one year, and barely moves (or even decreases) the next. This effect was more pronounced in the previous CBA, where lump-sum payments for such things as local media contracts counted fully in the year in which they were received. The current CBA addressed this problem by mandating that lump
