NBA players to receive $57.2M in escrow shortfall; Magic, Nuggets reportedly miss salary floor

With the NBA's free-agent moratorium over, the focus has shifted to new signings, trades, and the 2015-16 season.

But the moratorium exists to allow the league to conduct internal audits, looking backward at the fiscal season that was to make the requisite adjustments for the year to come. Along with setting the salary cap and luxury tax levels for 2015-16, the moratorium period also saw the league make adjustments for last season.

The most notable of the adjustments is that NBA players will receive $57.2 million in escrow shortfall payments from the league, according to a league memo. That shortfall is effectively rolled into the 2015-16 salary cap, helping explain the jump in the cap, along with a seven percent increase in revenue.

The players will also get back the 10 percent of their 2014-15 salaries that had been placed into escrow, an estimated $218.6 million in total.

The escrow system is complicated, but it essentially works as a means of protecting both players and the league against unforeseen changes to the NBA's economic environment. The salary cap and luxury tax are based on revenue estimates, and the league protects itself by withholding 10 percent of player salaries in escrow to ensure they don't receive more than their guaranteed share of basketball-related income.

In the event players receive less than their guaranteed share, the league owes a shortfall payment.

The news doesn't change much from a fan perspective, but it does speak to the fiscal health of the league.

Two teams miss salary floor

In another means of ensuring players receive their full share, teams are required to spend a minimum amount on player salaries, an amount equal to 90 percent of the salary cap.

The Denver Nuggets and Orlando Magic both failed to do so, according to a report from Adrian Wojnarowski of Yahoo Sports.

It's a minor infraction, and the teams aren't subject to a penalty or future restrictions. Instead, they have to pay out the amount they missed the floor by to their players - essentially, everyone on the team gets a small pay bump to push the team to the floor. The Nuggets have to pay out $773,000 and the Magic owe $1.9 million, according to Wojnarowski.

The Nuggets owing is a minor surprise, as they attempted to maneuver through a minor loophole to the salary floor and save real cash in the process late in the season. The Philadelphia 76ers, the league's lowest-salaried team for most of the year, successfully clawed their way back to the floor.