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How NBL teams are constructed within the salary cap is simple, but comes with some nuance. When the salary cap figures were released ahead of the official opening of free agency, there were a heap of questions. What's the difference between a team's spend and its cap hit? What's a marquee player, who can you assign that designation to, and when should it be used? What happens when the team goes over the cap? There have been high quality explainers over the years -- Liam Santamaria's 'Salary Cap for Dummies' article half a decade ago comes to mind -- but the reaction to this coming season's figures indicated that a refresher was needed. In the hunt to educate the masses on some of the key wrinkles to consider when building a roster, we've got a championship team of the past -- in this case: Melbourne United's 2020-21 team -- given the players mock salaries, and input them into this coming season's salary cap figures.  A ginormous note that the salaries given to players here are fiction -- created out of thin air by loosely determining a number based on that player's value at the time, but in the current market -- and then placed into the real 2024 salary cap structure. The salary cap for the 2024-25 NBL season has been set at $1,947,662.59. It's a soft cap, meaning teams can exceed that number, but would pay a luxury tax for every dollar they're over it, which is explained in more detail down low. The salary floor -- the minimum amount a team must spend, which is 90% of the cap -- has been set at $1,752,913.85. So, let's get into it. Here's a mock salary sheet for that 2021 title-winning United team. Team SpendThis refers to the total cash a team will spend on its roster. In this case, United went all in on high level Australians, and the benefit of that is how they're then able to manipulate the Salary Cap in their favour, which we'll touch on shortly. The spend on an import can be tricky. In this case, we have Scotty Hopson making $200,000 USD Net, meaning what will "hit their bank account", with the team covering the Australia taxes. So, by the time that player's wage, super, agent fee, incentives, car, flights, and accomodation are taken into account, a ballpark figure of the spend on him is that close-to-$600,000 AUD mark. The development players also count toward the overall spend so, with everyone accounted for, we're looking at a number above $3 million. Cap hitThis is where teams do their best to utilise different rules within the cap to stay out of the luxury tax, or to keep their tax bill as low as possible. After some tweaking, we've managed to get our Salary Cap spend to a healthy $1,995,295.16. Let's first look at how we can use the marquee rule. The rule allows NBL teams to give non-restricted players, Australian and Kiwi athletes, large deals but put them on fixed cap hits, increasing the chance of staying below the salary cap. This was implemented by the League Office to incentivise teams to spend more on high-level Australian talent. Marquee 1: $233,697.34. Marquee 2: $311,597.82. Marquee 3: $389,496.93. Marquee 4: $467,396.04. A team is permitted to have no more than four combined marquees and imports. There are a few ways you can utilise this. Theoretically, because all of Landale, Goulding, and McCarron are earning above those first three marquee numbers, you can designate them all as marquees and that'll lower your cap spend. In that case, those three locals would hit the cap at: $934,792.09. What we've done, though, is just make Landale and Goulding marquee players, so we're just utilising those first two marquee values and, thus, saving a decent amount of money on the cap by just eating the McCarron salary. Now, those three locals come in at: $795,295.16 on the cap. Hopson's cap hit would differ from the cash the team would spend on him for a number of reasons. The main one is that the NBL uses a fixed exchange rate of 1.08 to convert an import's USD to AUD, making the figure much lower. The reason for this is to ensure there is parity for all teams year-to-year, and avoid fluctuating exchange rates impacting a team's salary cap. Yudai Baba is a Special Restricted Player, so he hits the cap at $0. The league has the rule in place to encourage teams to recruit players from a number of Asian countries - Japan, China, India, South Korea, the Philippines, Taiwan, and Singapore - with the incentive that the contract doesn't hit the cap at all. Baba was among the highest value players in the NBL because United got a rotation player without making a dent on their cap hit. For the purpose of highlighting another wrinkle, we've taken $30,000 of Jack White's cap hit and added some to Mason Peatling. White missed some games during the season with injury -- only the games a player is active for count toward the cap -- so a prorated amount of his salary is taken off his cap hit. Development players, like Peatling in that season, don't count toward the cap unless they're replacements during games so we've added that $20,000 to his cap hit. If a development player is a replacement in a game, a prorated amount of the minimum salary per game is added to the cap. We've also stayed within the confines of the Five Player Rule, with the bottom-five paid players under the $701,165.54 maximum (40% of the salary floor), at $560,000. The rule is in place to sustain parity throughout the league. For the purposes of a simpler understanding of constructing a roster within the cap, we've chosen to assume the Contract Review Committee has evaluated each salary and designated their cap hit as the same number. The committee could assign a different value to a player; the higher number between the actual salary and the committee's designated value is the one used to determine the cap hit.  This team did not have a Next Star, the salary of which would've been paid by both the NBL and the team, and that number wouldn't hit the cap, so it's not pertinent to explaining a roster construction. Once all of those considerations are taken into account, we've gotten the team spend of $3,105,000 down to a Salary Cap spend of $1,995,295.16. Luxury taxIn this case, our United team has gone $47,632.58 over the cap, putting us in line to pay some luxury tax. There are four brackets above the cap teams can fall into: 1-15%, 16-30%, 31-50%, and over 50%. If a team is up to 15% over the cap, they need to pay however much they're over the cap x $0.25. Between 16%-30%, the subsidy is the amount over the cap x $0.5; between 31%-50%, it's x $1.0; while exceeding the cap above 50% is x $1.5. In this instance, being $47,632.58 over the cap puts us in that first bracket, giving us a luxury tax bill of $11,908.15.
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