The Pacers and Spurs are not only the only two teams in the NBA that have room for caps this season, but also the only two clubs whose team salaries remain well below the league’s salary floor.
As we explain in a glossary entry, the salary floor is the minimum amount that NBA teams must spend on player salaries in a given season. This amount is set at 90% of the season cap, rounded to the nearest thousandth. So since the cap for the 2022-2023 campaign is $123,655,000, the bottom is $111,290,000.
By our estimate, the Pacers’ team salary for the 2022-2023 season is just under $96 million, while the Spurs’ tally is just under $95 million. Both clubs have the opportunity to create more than $28-$30 million in cap room – they are also more than $15 million short of the salary floor.
There’s no rule that says the Pacers and Spurs have to sign free agents or trade players to make up that $15 million+ difference. Last season, for example, the Thunder finished well below the salary floor.
In this scenario, the team is simply obliged to make up the difference by distributing the shortfall among the players on their roster. The Oklahoma City players earned a nice year-end bonus last season, and the Indiana and San Antonio players may be hoping their teams don’t add big salaries in the coming months so they can get similar raises at the end of the season.
However, the Pacers and Spurs are unlikely to simply waste all of their remaining cap space. It looks to come in handy through the February 10th trade deadline, when teams around the NBA may be looking to ditch a contract or two. Indiana and San Antonio are well positioned to recoup lost wages when their trading partners lure them into accepting unwanted contracts by attaching draft picks and/or young prospects.
The two teams’ cap room will also allow them to investigate mismatched trades. For example, there were rumors that the Lakers and Spurs were discussing the possibility of a deal that would send Russell Westbrook and send compensation to San Antonio in exchange for Doug McDermott and Josh Richardson. McDermott and Richardson’s combined cap hit is just under $26 million, which would be nowhere near enough to match Westbrook’s $47 million-plus salary if both teams were operating above the cap. But the Spurs could pick up that extra salary with their cap space.
As we discussed last week, the Pacers have another potential way to use a large chunk of their cap room and get above the salary floor. Committing Myles Turner to a contract extension that includes renegotiating his salary for the current season and giving him an immediate raise would be one way to use their cap flexibility and get Turner to sign on the dotted line, provided there is mutual interest in doing a long-term business. Spurs have no player eligible for a renegotiation.
The Thunder’s relative inactivity at last season’s close is a reminder that we shouldn’t necessarily expect major action if a team is sitting on dead-season space during the season. Still, it’s safe to assume that teams across the league will be reaching out to the Pacers and Spurs over the coming weeks and months, suggesting creative ways for the two clubs to use their cap flexibility. Indiana and San Antonio will be two teams worth watching closely as February 10th approaches.