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NBA salary cap decreases for first time
July 16, 2002 wire reports

NEW YORK -- The NBA salary cap is going down for the first time in its 18-year history.


The cap, which rose last year by $7 million to $42.5 million, was dropped on Tuesday to $40.271 million for the 2002-03 season primarily because of a $100 million-plus decrease in guaranteed television money.

In January, the NBA completed television packages with The Walt Disney Co. and AOL Time Warner Inc. worth $4.6 billion over six years. Its deal with NBC expired at the end of last season.

During the first four years of the NBA's current collective bargaining agreement, the average player salary increased approximately 54 percent from $2.6 million to $4 million.

Though the average salary decreased last season from $4.2 million in 2000-01, it is expected that the average will rise next season because of scheduled salary increases in long-term guaranteed contracts, free agent signings, and exceptions available under the collective bargaining agreement.

The players' union declined to comment Tuesday night.

The NBA also announced on Tuesday that the mid-level exception that teams can offer free agents is going up from $4.538 million to $4.545 million.

According to the union, players are going to get back $77 million from the NBA, in part because there wasn't a luxury tax assessed to teams because the combined salary and benefits failed to reach 61.1 percent of defined gross revenues.

Of the $77 million, players will receive $22 million from the escrow because the percentage was only 60.2. In addition, a provision in the collective bargaining agreement called for salaries to rise at least $50 million, and they fell $43 million short, money that is being returned.

The final $12 million, to be delivered in an annuity, is going back to players in new benefits.

The minimum team salary for next season will be $30.2 million.

Last year, the salary cap was increased from $35.5 million to $42.5 million.

The increase of $7 million from the previous year's cap represented the second-largest annual jump since the cap was instituted for the 1984-85 season.
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