With an agreement in place with the NBPA a labor deal that will change the business of basketball, Boardroom has everything you need to know about the 2023 collective bargaining agreement.
On Saturday, April 1, the NBA and the National Basketball Players Association agreed on terms for a new collective bargaining agreement. This was no April Foolin’ on this curiously gigantic sports business weekend — the league and the labor union are ushering in a new NBA CBA that will change how the world’s premier basketball organization and its 30 teams do business.
From revamps of salary cap and luxury tax structures to more context regarding the implementation long-discussed NBA mid-season tournament, there’s a lot for fans to sink their teeth into, and while several key details are still to be finalized, we have the gist of what’s in play for the next several years to come.
Check out the most important facts you need to know about the new NBA CBA set to take effect in the summer of 2023.
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The NBA Mid-season Tournament is Closer Than Ever
There is a path to the league’s first-ever mid-season tournament making its debut as soon as the 2023-24 season, though that timeline is anything but guaranteed. The event’s preliminary games will take place during designated regular season games — similar to the WNBA’s approach to the Commissioner’s Cup competition — with eight teams advancing to a knockout stage.
The semifinal and final games will take place at a neutral site, with the final specifically not counting as part of the 82-game regular season standings, and a pool of bonus money will be on the line.
Bigger Contract Extensions
Several different NBA salary cap regulations are in place primarily to make it easier for teams to re-sign their players, the idea being that without such protections, smaller-market organizations would frequently lose talent to the league’s exclusive tier of desirable free agent destinations.
Certain measures like the 35% “supermax” contract extension haven’t ultimately accomplished that goal so neatly — Kawhi Leonard doesn’t play for the Spurs and Anthony Davis doesn’t play for the Pelicans, after all — the conversation on this front is ongoing. Under the new NBA CBA, players re-signing with their incumbent teams are eligible to sign a deal beginning at 140% of their previous year’s salary, up from 120% per the previous agreement.
The Door is Open for Players to Invest in Cannabis — and NBA and WNBA Teams
Exactly how these rules will be written remains to be confirmed, but we’re looking at a couple of huge breakthroughs here.
On the cannabis front, not only will the substance be fully, 100% removed from the NBA’s drug-testing program — completing a process that began during the 2019-20 season — but players will be permitted to advocate publicly for cannabis-related brands, either as investors, endorsement partners, or both.
Far more profound for these athletes’ bottom lines, however, is that the league is finally making concrete moves to allow active players to own equity in NBA or WNBA teams. This is as revolutionary and empowering as it is legally tricky, as player movement between teams means rules regarding conflicts of interest will have to be manged extremely deliberately.
But in the biggest of the big picture, this could be a major coup in kick-starting the cultivation of multiple future athlete billionaires.
It’s Harder for Big Spenders to Keep Spending
Currently, a luxury tax “apron” exists approximately $6 million over the tax threshold above which teams are considered “hard-capped” — a restrictive status earned by signing players using mechanisms like the non-taxpayer mid-level exception, the bi-annual exception, or sign-and-trade.
Now, a separate restricted status will apply to all teams exceeding a second luxury tax apron at $17.5 million above the tax threshold that includes:
- Using the taxpayer mid-level exception to sign a free agent
- Sending cash as a trade asset
- Signing free agents on the buyout market following the NBA trade deadline
Additional Notes on the New NBA CBA
- Load management and annual awards: The new labor deal mandates that players must participate in at least 65 regular season games to be eligible for individual awards like MVP, Defensive Player of the Year, and Sixth Man of the Year.
- More flexibility for middle- and lower-tier spenders: As reported by insiders including ESPN’s Adrian Wojnarowski, the new CBA includes bigger trade exceptions and expanded salary cap exceptions for free agent signings for teams spending below the upper rungs of the luxury tax.
- Restricted free agency: Qualifying offers will increase in value by 10%. The offer sheet matching period for RFAs contracts from 48 hours to 24 hours.
- Revenue-sharing: Money generated from official team and league licensing deals will be included for the first time within the greater pool of “Basketball Related Income” (BRI) that players and owners split 50-50.
