What is a key characteristic of a soft cap in the NBA?

A key characteristic of a soft cap in the NBA is that it allows teams to exceed the salary cap through various exceptions. This structure is designed to promote team competitiveness and enable franchises to retain their star players while also allowing them the flexibility to improve their rosters through free agency.

The soft cap system permits certain exceptions under which teams can go over the salary cap, such as the "Bird Rights," which allow teams to re-sign their own free agents even if it would put them over the cap. This is in contrast to a hard cap, which would limit a team’s ability to exceed the salary cap under any circumstances.

Understanding the soft cap is crucial for navigating the financial landscape of the league, as it directly affects how teams operate in terms of player acquisitions, contract negotiations, and overall financial strategy.