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NBA sets $99 million salary cap, lower than expected

The cap for the 2017-18 season had been projected to hit $101 million, an 8 percent increase over 2016-17. Instead, the cap will increase only 5 percent.

NBA: Finals-Cleveland Cavaliers at Golden State Warriors Cary Edmondson-USA TODAY Sports

The NBA has informed teams the 2017-18 team salary cap will be set at $99 million, lower than the previously forecast $101 million, according to multiple reports. David Aldridge first reported the news.

The cap jump still represents a 5 percent increase over the 2016-17 level, set at $94 million. But given that two years ago the NBA had forecast the cap would rise to $108 million by this coming season, seeing it just shy of $100 million is a relative surprise.

The salary cap governs how much teams can spend on their payroll before contract exceptions come into play. Individual player maximum salaries, the luxury tax threshold, and other items are also based on salary cap.

The luxury tax threshold is set at $119 million, per reports.

A $99 million salary cap means that for veteran free agents like Kevin Durant, the maximum annual salary will be $34.65 million. Durant, due to his Bird rights situation, will be eligible for maximum contract of four years, $148 million. Gordon Hayward, who has fewer service years in the NBA and did not trigger the Designated Player rule, will be eligible for a five-year, $170 million contract from the Jazz or a four-year, $127 million contract from another team.

The salary cap is set annually by the NBA through complicated methods by which the league attempts to ensure players are collectively paid roughly what they allowed under the collective bargaining agreement. Under that labor deal, players earn just over 50 percent of the league’s basketball-related income.

The salary cap experienced a large spike in 2016-17 due to a new national television broadcast rights deal going into effect. This caused many teams to have significant cap space. Because not all teams used up their space in the 2016 offseason, several teams entered the free agency period July 1 with significant space at their disposal.