Some fans questioned the Knicks' decision to risk $30 million a year on an unknown player who had never made an All-Star game when they extended RJ Barrett's deal for four more years and $120 million. However, the wage cap is predicted to climb quickly in the coming years, and that $120 million figure was not considered in NBA front office circles as a reasonable bet. This is not to say that Barrett had earned the status (or perhaps might in the future).
According to Shams Charania of The Athletic, teams were notified that the NBA salary cap is anticipated to increase by $10 million for the upcoming season.
Although a $134 million ceiling and a $164 million tax line would set records (8.4% more than this season), revenue could surpass initial expectations and raise both numbers slightly. Bobby Marks of ESPN adds that due to limitations imposed as a result of the COVID shutdown (intended to assist building owners in recovering money from the periods when buildings were vacant), the limits cannot increase above $136 million.
The increase in the ceiling of $10 million is just the start of a gradual but quick growth that might last the rest of the decade.
By the 2025–26 season, new national television and streaming rights agreement should be in place. Many anticipate that it would at least double the $2.6 billion that the NBA receives from Turner (TNT/NBATV) and Disney (ABC/ESPN) each year. The fast-rising salary ceiling may not go away very soon because it is anticipated to be "smoothed" out over a few years.
This will lessen the sting of the Barrett contract and other contracts made this summer, should they not work out as planned.
Nobody anticipates a work stoppage with the current CBA negotiations because of all the money flowing into the system – keep in mind that players make up around half of all basketball-related earnings. Nobody wants to kill the goose that lays the golden eggs, even though there are some complex challenges to resolve (luxury tax difficulties, player trade demands on new contracts).
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