The NBA is seeking to adopt a firm salary cap as it continues talks on a new collective bargaining agreement with the players union.
The rule would tighten how much teams across the league are permitted to spend on their respective rosters.
Currently, teams are allowed to spend above the NBA salary cap, but they are penalized with a luxury tax. The newly-proposed "upper spending limit" would create an absolute spending ceiling that effectively eliminates the luxury tax option.
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Details of the upper spending limit proposal were first reported by ESPN and NBA reporter Marc Stein.
According to The Associated Press, a source who spoke on the condition of anonymity said the players union has no intention of agreeing to the plan.
The reigning NBA champion Golden State Warriors are one of the franchises spending more than many other teams.
The Warriors spent nearly $350 million for the 2021-2002 season on salaries and tax. This season, the team is projected to spend around $360 million.
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That’s nearly four times what the San Antonio Spurs will spend this season and slightly more than double the average the other 29 clubs are on pace to spend this season.
Another topic reportedly on the table during the ongoing labor talks is reinstating high school players' eligibility for the NBA Draft.
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The Warriors have committed more than $600 million in contracts to Stephen Curry, Draymond Green, Klay Thompson, Jordan Poole and Andrew Wiggins, including their earnings for this year.
The NBA is coming off a record year that saw revenue surpass the $10 billion mark.
"The numbers did surprise me to a certain degree because it exceeded projections, and the projections represent where we think our business is going," NBA Commissioner Adam Silver said in July. "I think it’s quite remarkable from where we came 2½ years ago."
The current labor deal between the league and its players is set to expire after the 2023-24 season. The NBA or the NBPA can end the deal a year early by announcing its intent to do so by Dec. 15.
The Associated Press contributed to this report.
