Report: NBA teams preparing for potential salary cap drop due to China situation

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With the NBA's situation with China still ongoing, teams are reportedly planning for a potential salary-cap drop for the 2020-21 season, according to a story by Keith Smith

After Rockets general manager Daryl Morey retweeted a tweet supporting pro-democracy protests in Hong Kong, the Chinese government canceled several business deals with the Rockets and the NBA, putting the billions of dollars in economic interest in jeopardy. 

If the situation escalates and the NBA's relationship with China fall apart, it could result in a salary cap drop between 10-15 percent, according to Smith. Smith noted that teams are just doing their due diligence regarding this matter, but a drop in 2020-21 could significantly impact NBA free agency this summer. 

After all the money everyone spent last summer, this would have a major impact on all of us.

The salary cap for this season is already set at $109 million and the league projects the cap to rise to $116 next year. If that $116 million figure were to drop to something between $98.6 and $104.4 million (10-15 percent), it would greatly limit the amount teams would be able to spend. After the 2019 free-agent spending spree, there'd be very few players landing substantial paydays if this becomes a reality. 

The Celtics' contract negotiations with Jaylen Brown could change as well. Boston has until October 21 to agree to a rookie-scale extension with Brown, but that has remained an unlikely outcome according to recent reports. If the summer of 2020 projects to be a dry one for free agents, it could behoove Brown to agree to an extension with the Celtics sooner rather than later, even if the final amount is lower than he believes he's worth. Letting a dead market set your value likely wouldn't end well. 

This could also impact the Celtics' desire to re-sign Brown to any sort of extension. If the cap drops, the luxury tax threshold does as well. Many teams safely below the tax line would find themselves paying the penalty as soon as 2021, which would be a lot of money coming out of the owner's pockets who might not necessarily want to pay it if their team isn't a contender. 

Again, Smith noted that the teams are simply preparing for any possible situation so they aren't caught off guard. However, with how heavily a cap drop like this would affect the league and the amount of money players would be losing out on, it's a scenario everyone involved might want to avoid. 

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