Even in a massive, complicated system like the NBA’s salary structure, sometimes a small margin can make a simply massive difference.

Going into an offseason, pending free agents have cap holds that function as an estimate of what that player will make so if the team cannot fully exploit a loophole of having open books, signing players and then using Bird rights to re-sign their own players on top of it. In certain circumstances like Kawhi Leonard, the gap between cap hold and eventual salary allows teams some wiggle room, which the Spurs maximized when signing LaMarcus Aldridge. 

When a team has full Bird rights on a player (meaning he finished the last three seasons with that team or on that contract, basically), calculating a cap hold requires knowing whether that player’s salary the season before was over or under the “Estimated Average Player Salary,” a term used in the Collective Bargaining Agreement. If a player made less than the estimated average for that season, his salary gets multiplied by a larger number than if he made more than it as a way of trying to reach a more fair estimate of his eventual salary on his new contract. 

While the league does not know what the actual average salary was until a season ends for logical reasons, they use the prior year as an estimate and give it a small (4.5%) bump. Per Larry Coon’s CBAFAQ, the average salary for the 2014-15 season ended up being ~$5.49 million so the estimated average for 2015-16 is about $5.74 million.

Naturally, some players will have salaries in this immediate area- the 2015-16 Non-Taxpayer Mid-Level Exception (which is a pre-determined amount not tied to the salary cap) is just under that estimated average salary, for example. However, this year saw one of the more impactful occasions concerning a player near the line. 

Bradley Beal has struggled with injuries throughout his NBA career, but he still holds a key place in Washington’s future. Part of that comes from the fact that even though he will be on a lucrative new contract next season, the Wizards hold match rights and he has a cap hold lower than his expected 2016-17 salary so the team can do what the Spurs did last summer: keep his lower hold, fill up their space (ideally with a max player, even more ideally Kevin Durant) and then either match on Beal or sign him themselves. As the No. 3 pick in the 2012 NBA Draft, Beal’s 2015-16 salary is largely dictated by the rookie scale and ended up at just under $5.7 million. 

$5.7 million is barely below the estimated average salary for 2015-16 ($5.74 million) so according to Article VII, Section 4 (d)(1)(ii) of the Collective Bargaining Agreement, his cap hold will be 250% of his 2015-16 salary while it would have been 200% if his salary was even $1 over the estimated average. That difference may not seem substantial but it absolutely will be for the Wizards this July. A 200% hold with Beal’s 2015-16 salary would have been about $11.4 million, while a 250% hold is about $14.2 million. That ~$2.85 million margin is cap space Washington will not be able to use this summer unless they let Beal go entirely. They still have enough room to sign Durant, or a different max player, but the margin became substantially tighter, potentially forcing harder decisions with retaining their own free agents or using that wiggle room to add better surrounding talent. 

Incidentally, the timing of the NBA offseason could conceptually work in Washington’s favor. After all, the league must have their audit done on the prior season as a part of the process for determining the next season’s salary cap before the end of the July Moratorium (the primary purpose of the Moratorium) so they will know the actual average player salary from the prior season before Beal can sign anywhere. Plus, recent precedent is that the estimate has outpaced the actual average in four out of the last five seasons, which is another good sign for the Wizards. Unfortunately for Washington, the CBA specifies that cap holds use the estimated average instead of the actual average so an eventual drop below Beal’s 2015-16 salary would just add insult to injury.

As crazy as that sounds, it arguably gets wilder when considering what made that possible. Since the estimated average salary for a season depends on the actual average of the season before, it is possible to estimate just how small a change it would have taken to affect the Beal situation. All it would have taken was about $16.85 million less in league wide salary spending in 2014-15 to move the average salary below Beal’s price tag. 

A system like the NBA’s will always have nuances that help and hurt teams but they rarely come with as tight a margin as the Wizards and Bradley Beal’s cap hold.

August 2016 Addendum:

In an amazing turn of events, the Wizards ended up being the team to face the brunt of the increased Estimated Average Player Salary for the 2017-18 season as well. While the 2013 Draft’s #2 overall pick Victor Oladipo will make more than the $6,191,000 figure, #3 pick Otto Porter will not, meaning his cap hold will be 250% of his 2016-17 salary rather than 200%.

In practice, this means both Porter and #4 pick Cody Zeller will have smaller cap holds than Oladipo.

However, the impact is less severe than for this season because both the Wizards and Hornets spent enough in July 2016 to be at or over the cap for the 2017-18 season based on current estimates. That diminishes the impact of being on the short end of the stick in terms of this CBA nuance.