Cap space

Cap space is how far a team's cap salary sits below the salary cap. It is the most flexible way to add players: cap space can absorb any contract up to its size, with no matching rules.

Cap salary includes cap holds for a team's own free agents and unsigned first-round picks, so "cap space" often only exists after renouncing holds, which forfeits the Bird rights attached to them. Teams therefore face a real choice each summer: keep Bird rights to re-sign their own players over the cap, or renounce them to open room for outside free agents.