The NBA Salary Cap is the maximum amount of money an NBA team can spend on all it's player salaries combined. Once a team submits it's full player roster for a given season it cannot exceed the Salary Cap, otherwise, a Luxury Tax will follow suit if a team exceeds a certain tax level. There are several exceptions for players and teams to avoid Luxury Tax implications. Overall, the Salary Cap process is a fairly complicated process and not just a simple summation of individual player salaries.
The NBA Salary Cap for the 2010 NBA season will be $57.7 million. Last year, the Salary Cap for the 2008-2009 season was $58.68 million. Revenues last season rose 2.5%, but that's not always the best indication of an economically sound NBA. David Stern is business savvy, so don't think this was something he didn't think fully through. Professional basketball will rebound, nevertheless, as this will take some time, seeing how we're experiencing an inclement cycle in the economy.
As expected the NBA Salary Cap has indeed dropped for the 2010 season. The difference between next year and last year is $980,000, which may seem minuscule, however, it will greatly affect player signings in the upcoming year. Sports economists may appear to have been slighted for predicting this year's free agency would entail less player movement, but the truth of the matter is that players are trying to milk their contracts now for all it's worth before, what was seen as, this current inevitable dip.
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