NBA free agency: Salary cap increases by $11.6 million

Yahoo Finance’s Josh Schafer joins the Live show to discuss the expectations for the NBA’s salary negotiation period starting Thursday at 6 p.m. ET.

Video transcript

BRIAN CHEUNG: Well, the weather forecast is calling for some [INAUDIBLE] bombs later on this afternoon as NBA free agency begins.

AKIKO FUJITA: How many of you got that joke? We got it. We got it.

BRIAN CHEUNG: Real hoops heads know, including Yahoo Finance's Josh Schafer here to talk about NBA free agency. Salary cap higher this year, right? So some good deals.

JOSH SCHAFER: Significantly higher, compared to the last couple of years, yeah. So the salary cap is up $11.6 million this year. That number is actually equivalent to pretty how much it went up from 2017, '18, through 2021, 2022. So the cap is determined by league revenue. We know, during COVID and things like that, league revenue was a little stagnant. So you can see there how much the cap has gone up over the last 10 years, too.

BRIAN CHEUNG: It's a good thing for the league.

JOSH SCHAFER: It's a good thing for the league. The league is making more money, so the cap went up. And normally, the cap only goes up significantly when there's a new media rights deal. That's going to be coming in a couple of years, so that we'll probably see another big cap jump. But $11.2 million, more money to spend. And we should note the luxury tax is up, too, which is what you get taxed when you spend more money. So some of these teams like the Warriors and teams like that can spend [INAUDIBLE].

AKIKO FUJITA: Well, I was going to say, you're talking about the league making more money. Let's talk about the team that's made the most money.

JOSH SCHAFER: Right, yeah, no, the Golden State Warriors spend more money than anyone. And they've done it on a consistent basis over the last several seasons. And really, they're kind of showing a good example of return on investment, right? You can see their valuation there, rising from when they bought the team 10 years ago at $450 million, to now over $5 billion.

They spend and they spend and they spend. And they'll spend-- probably they basically spend $170 million extra in what's called the luxury tax. So if you go over the salary cap, you get taxed. This year, the Warriors are going to go over that again. And it's interesting to watch some of their role players [INAUDIBLE].

AKIKO FUJITA: And you said that the Warriors have proven an example of how to do it. What's the team that hasn't? Let's call them out.

BRIAN CHEUNG: The Lakers.

[LAUGHTER]

AKIKO FUJITA: I'm a Laker fan, but I am frustrated.

JOSH SCHAFER: They've spent a lot of money, and now they're in a tough spot, right, because there is that cap. And you do have to decide how much you're going to be willing to spend over. When we talk about the luxury tax, the Lakers have Russell Westbrook. It's a little tough right now.

AKIKO FUJITA: A lot of money sitting right there with one player.

BRIAN CHEUNG: Well, I'm a Nets fan. Look at the two of us over there.

AKIKO FUJITA: I know.

BRIAN CHEUNG: The Nets--

AKIKO FUJITA: You're not going to have a good--

BRIAN CHEUNG: The Nets should actually sign me. I'm a pretty good guard. I'm a good 3 and D type of player. You know, shoot 3 [INAUDIBLE]

JOSH SCHAFER: You think you'd fit in well.

BRIAN CHEUNG: Well, problem is I'm 5'7, so.

AKIKO FUJITA: OK, I wasn't going to bring it up if you didn't raise that.

BRIAN CHEUNG: Akiko and I are the same height in this graphic, so at least there's that. Josh, we'll get you one in a Jayson Tatum jersey for the next one.

JOSH SCHAFER: There we go.

BRIAN CHEUNG: Yeah.

JOSH SCHAFER: One thing I was wondering quick, Kyrie Irving giving up all that money if he was going to do that to go to the Lakers. Would you have liked-- you would have liked it because you'd get him, right?

AKIKO FUJITA: It's a change. I'll take a change.

JOSH SCHAFER: I think it's kind of lame, though. Don't you think it's kind of lame?

AKIKO FUJITA: Last year wasn't good. I'll take a change.

BRIAN CHEUNG: She gets really worked up about it. But she just really doesn't want Russell Westbrook. But let's wrap it up there, shall we?