Well I don't play NBA games, but here what I do in NHL games.
Go into the screen to dump players, and dump your worst players that you wouldn't play or you can't get anything in a trade for.
Also, release your top paid players to free agency, then resign them for lesser money.
How do you clear salary cap space on NBA Live 2005 in Dynasty mode?nba 08
Sell stuff on EbaY
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