The National Basketball Association (NBA) is the pre-eminent men's professional basketball league in North America, and is widely considered to be the premier men's professional basketball league in the world. It has thirty franchised member clubs (29 in the United States and 1 in Canada), and is an active member of USA Basketball (USAB), which is recognized by FIBA (also known as the International Basketball Federation) as the national governing body for basketball in the United States. The NBA is one of the four major North American professional sports leagues. NBA players are the world's best paid sportsmen, by average annual salary per player.
The league was founded in New York City on June 6, 1946, as the Basketball Association of America (BAA). The league adopted the name National Basketball Association on August 3, 1949, after absorbing the rival National Basketball League (NBL). The league's several international as well as individual team offices are directed out of its head offices located in the Olympic Tower at 645 Fifth Avenue in New York City. NBA Entertainment and NBA TV studios are directed out of offices located in Secaucus, New Jersey.
The highest-paid NBA players by season over the past twelve seasons have received contracts with salaries noted in the twenty-million-dollar range. In this twelve-year span, Kevin Garnett received $28,000,000, which was the highest salary payment of any NBA player, during the 2003–2004 season. Garnett has been the highest-paid NBA player per year in seven of the past twelve NBA seasons. Michael Jordan is the only NBA player to sign a contract worth over thirty million dollars in a season. During the 1997–1998 season, Jordan earned $33,000,000. Kobe Bryant will join Jordan as the only two players to reach this milestone when the 2013-2014 season begins.
Beginning in the 1984–85 NBA season, the NBA's first salary cap was introduced. The NBA salary cap is the maximum dollar amount each NBA team can spend on its players for the season. However, the NBA uses a "soft" salary cap, which means that significant "salary exceptions" allow NBA teams to exceed their allotted amount in order to sign players. The salary cap is determined during the offseason, but as stated earlier, it is liable to change.
In professional sports, a salary cap (or wage cap) is an agreement or rule that places a limit on the amount of money that a sporting club can spend on player salaries. The limit exists as a per-player limit or a total limit for the team's roster, or both. Several sports leagues have implemented salary caps, both as a method of keeping overall costs down, and to ensure parity between teams so wealthy teams cannot entrench dominance by signing many more top players than their rivals. Salary caps can be a major issue in negotiations between league management and players' unions, and has been the focus point of several strikes by players and lockouts by owners and administrators..
Salary caps are used by the following major sports leagues around the world: