The recent feud between the NBA and the Chinese government has put every NBA team on edge, including cap experts, who have experimented with scenarios in which the league would be forced to lower the 2020-21 salary cap by as much as 10-15%, according to Keith Smith of Yahoo Sports.
The Houston Rockets have already lost most of their Chinese sponsors, along with stopping the broadcast of their games, which should bode as a huge financial hit for the most popular NBA franchise in China. Yet the NBA faces similar repercussions, as the projected $116 million cap could shrink below the $100 million mark in a worst-case scenario, which would have a devastating effect across the league, with reverberations being felt years after the 2020-21 season.
Much like in 2016, NBA teams went on a shopping spree this summer, guaranteeing plenty of money on long-term contracts for their new star players. This change in the cap could have drastic effects on how teams navigate their contractual situations, as well as players taking a hit to the wallet due to it:
A drop in the cap would also impact the starting figures for maximum salary contracts, which range from 25 to 30 to 35 percent of the cap. It would also impact various exceptions and the rookie scale contracts, which rise or fall by the same percentage as the cap does.
In short, the NBA has been able to grow as an organization largely to branching to become a global game and reaping the royalties of selling their product overseas. China is undoubtedly its biggest partner and consumer, and a fissure between them could certainly cost the league dearly, with a near-immediate reflection in how the 2020-21 season trots along.
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