NBA sets 2015-16 salary cap at record $70M for 11 percent increase

NEW YORK -- The NBA salary cap was set Wednesday for next season at $70 million, a higher-than-expected number that paves the way for free-agent contracts to be signed.

The league said the cap increased by 11 percent from last season's $63.1 million and the 2015-16 cap will be the highest ever -- though it will be shattered next summer. It had been projected to come in closer to $67 million until recently.

With the cap set, the league's moratorium was lifted at midnight, and deals and trades that were agreed to since free agency opened on July 1 could become official.

Also, the tax level increased 10.3 percent to $84.7 million. Teams whose payrolls exceed it will be subjected to penalties.

One reason the cap value was higher than expected was because the league as a whole underpaid players last season. The players are guaranteed 50 percent of league revenues, plus a percentage of the overage when those revenues exceed projections, which is capped when the total hits 51 percent.

Last season the league came up $57.3 million short of its obligation. When this happens, the league sends the players' association a check for the difference -- the $57.3 million is then distributed to the players -- and one-thirtieth of the shortfall is added to the cap in the next season. Because of this, the cap value was bumped upward by an additional $1.9 million this season.

In addition, two teams, the Denver Nuggets and Orlando Magic, paid less than the minimum team salary to their players. When this happens, the shortfall -- $774,000 and $1.9 million, respectively -- is paid to the players on those teams. Players also will be refunded the entire 10 percent of their salaries that were paid into the league's escrow system last season.

The salary cap is derived in part from league revenues. It is expected to vault to about $90 million for the 2016-17 season, when the league's new national TV contracts begin.

In the meantime, there's plenty of money for teams and players next season. Maximum salaries will rise because they are based on a percentage of the cap, depending on a player's years of service.

LeBron James, should he sign for the max, would make $23 million next season with more than 10 years in the league.

There will be three spending exceptions available to teams. The non-taxpayer midlevel for this season is $5.5 million, the taxpayer midlevel is $3.4 million and the midlevel for a team with room under the salary cap is $2.8 million.

ESPN.com's Larry Coon and The Associated Press contributed to this report.