An international firestorm between China and the NBA could cost Kings guard Buddy Hield millions of dollars on his next contract if revenue is lost and the league’s salary cap is reduced.
The geopolitical flap started last week when Houston Rockets general manager Daryl Morey posted a since-deleted tweet in support of pro-democracy protesters in Hong Kong. The NBA has built a booming business relationship with China, but the league stands to lose billions of dollars in lucrative television and merchandising contracts as a result of the controversy.
Keith Smith of Yahoo! Sports reported several NBA teams are planning for a scenario in which the salary cap for the 2020-21 season could drop 10 to 15 percent due to potential revenue losses in China. The salary cap is calculated based on a percentage of the league’s revenue from the previous season. According to USA Today, the NBA could lose more than $500 million in basketball-related income from China.
The cap is set at $109.1 million for the 2019-20 season and has been projected to rise to $116 million in 2020-21. A 10- to 15-percent decline in basketball-related income this season could cause the cap to drop by $11.6 to $17.4 million, meaning teams could have significantly less money to spend next season. Yahoo! Sports reports only eight teams are projected to have salary cap space next summer. A number of teams could be eliminated from that group if the salary cap drops.
A reduction in the salary cap would also impact players — such as Hield — who are eligible for maximum-salary contracts and rookie-scale extensions, which are calculated based on the cap. Players with fewer than seven years of service time are eligible for contracts up to 25% of the salary cap. Players with seven, eight or nine years of service can earn up to 30% of the cap. Players with at least 10 years of service can receive up to 35% of the cap.
Hield falls into the first category as he enters his fourth NBA season. Based on current cap projections, he is eligible for a four-year deal worth about $130.7 million or a five-year, designated-player extension worth up to about $170 million. If the cap drops by 15 percent from the projected $116 million to $98.6 million, Hield would be eligible for a four-year deal worth up to about $111.1 million, or a five-year deal worth up to about $144.6 million.
The Kings have until Oct. 21 to sign Hield to an extension. If the deadline passes without a deal, Hield will become a restricted free agent next summer, in which case the Kings would have the right to match any offer he receives from another team. That might be the most likely scenario. Kings general manager Vlade Divic recently told The Sacramento Bee “Buddy is (a) very important piece to this franchise” and “we’ll figure something out down the road.”
Sacramento Kings preseason schedule
Oct. 4: Indiana Pacers 132, Kings 131 (OT)
Oct. 5: Indiana Pacers 130, Kings 106
Oct. 10 vs. Phoenix Suns, 7 p.m.
Oct. 14 at Utah Jazz, 6 p.m.
Oct. 16 vs. Melbourne United, 7 p.m.