The week before Holy Week, the National Basketball Association and the NBA Players Association reached a tentative agreement on a new, seven-year collective bargaining agreement (CBA). Since it was first crafted in its present form by former NBA Commissioner David Stern, it has assigned much of the league’s income (initially 53 percent) to pay the players’ salaries. Then again, over the last 30 years, things have changed greatly. The league has become a global phenomenon, and now has many, many more markets to tap, and more revenue streams to avail of. It’s only been in the last decade that the league has even allowed advertising (logo placement) on the official players’ jerseys. So the players are getting a slice of a much bigger pie. Until the actual term sheet is signed, there are some major points that seem to be palatable to both sides.
In the past, negotiations always seemed to get contentious. The players would try to muscle more money out of the owners in what has been described as an argument between spoiled millionaires and spoiled billionaires. But it’s more than that. Most people forget that the league has been run by Jewish lawyers. The NBA is based in New York, where it was formed. New York is historically the entry point of Eastern European immigrants fleeing all major conflicts like past world wars and civil unrest. Once in the United States, many continued the trades they had for generations back home. Hence the proliferation of bankers, grocers, doctors and yes, lawyers. From the 1950’s to the 1970’s, when hostile corporate takeovers became the norm, most law firms refused to get involved. You needed tough, smart, ruthless Jewish lawyers to handle the mess, like David Stern, who was the league’s legal counsel before ascending to commissioner when Michael Jordan arrived. Current NBA Commissioner Adam Silver’s father Edward was, in fact, an expert in labor disputes. This legacy gives NBA management a huge advantage in any contract negotiations.
Basically, the CBA’s broad terms remain the same, with the league and the players splitting what is now called BRI (basketball-related income) more or less evenly. This may seem small considering that at one point, players received 57 percent of all BRI, but it’s a much bigger pie. And under certain circumstances, teams may exceed the salary cap. There are provisions in place, however, to prevent the wealthier teams from spending significant amounts above the “soft” salary cap. They would also have to pay a “luxury tax” to the league and the other teams should they significantly exceed the cap.
One major win for the players is that now, team owners have agreed to include licensing revenue under BRI. Next season’s projected $160 million income from licensing translates to roughly an additional $2 million to each team’s cap, and will only keep growing to a certain point. If no major revenue sources (like a new TV broadcast contract or global sponsorships) come in, players whose contracts expire within the next couple of years will not receive any big windfalls. Also, since 2017, teams have been allowed to have two-way contracts (players who split time between the mother team and its G-League counterpart). This saves the owners some money in salaries. The number will now be increased to three, which will provide more options for shuffling rosters. It does seem curious that the players would give more newbies opportunities rather than protect veterans. We’ll have to see how all of this pans out.
To address the load management issue, the new CBA institutes a minimum number of 65 games played for a player to receive any post-season awards. This brings to mind the contract that Phil Jackson put in place when he recruited Dennis Rodman for the Chicago Bulls’ second three-peat. Rodman’s deal incentivized attendance by including a $5 million bonus if he missed no more than two games in one season. It worked.
Also, post-season selections will do away with positions. This means that All-NBA Team selections, for example, will simply list the best players voted, regardless of their positions. In other words, those who perform best will be rewarded. Most importantly, the length of the CBA guarantees no lockouts for the medium term. Players will play, they will get a bigger piece of the pie, and newcomers will have more shots at roster spots. Overall, it seems that everyone is happy, most of all, the fans.