The New NBA Collective Bargaining Agreement and its Effect on Players and the League
This past January, the NBA and the NBA Players Association struck an agreement on a brand new collective bargaining agreement that will take effect on July 1, 2017 and run through the 2023-2024 seasons.[1] The agreement is a welcome sign for players, the league, and fans alike as the popularity of the NBA is higher than ever. The new CBA has a number of changes that can be seen as a direct response to the changes the league has seen over the past few years, but all seem motivated by giving the players more of an equal share of the riches and creating parity across the league.[2]
The NBA operates under a salary cap that limits the amount one team could spend on their team per year, the old CBA had rigorous max contracts that would cap the amount a player could make and the amount of years he could sign for based upon certain criteria (i.e. the number of years played for one team, performance goals etc.).[3] Therefore, there was not much of a difference in the contract Lebron James would be able to garner and someone like Chandler Parsons (a nice player but obviously nowhere near Lebron James). Obviously, this angered star players like James quite a bit who felt like they were not getting paid their market value.
On top of the max contract problem, the NBA has constantly had to deal with the issue of their marquee star players leaving the teams that drafted them to go chase the glamour and championship hopes of a large market like LA, New York, Miami, or Golden State (see Shaquille O’Neill, Lebron James, and Kevin Durant). The NBA has an interest in creating parity across the league but cannot do so if stars like Kevin Durant on Oklahoma City or Anthony Davis on New Orleans have no incentive to stay with the team that drafted them if their max contracts were more or less the same. Under the old CBA, if a player’s current team wanted to offer their star player a new contract the only advantage they would have over other teams was the ability to offer a five year deal as opposed to a four year deal (and slightly more money).[4] As we saw this summer with Kevin Durant, the pull of playing with three other all-stars, a record-breaking team, and a much bigger market justified punting on the extra contract year he could have gotten had he stayed in Oklahoma. Now, the new CBA strongly incentivizes players to stay put through the Designated Player Exception. A player can qualify for the DPE if he is on the original team that drafted him for at least seven years, and was on an All-NBA team or won an MVP.[5] Should a player qualify for the DPE he could sign for an additional six years with his current team and up to thirty-five percent of the cap (about $102 million as it currently stands) as opposed to only four years and significantly less money if he decided to switch teams like Kevin Durant did.[6] Therefore, the pull to stay put with your original team is far greater than it used to be in order to prevent a situation like the league is facing right now—really only Cleveland and Golden State are competing for the championship due to their ability accumulate stars.
Last, a few other provisions include a forty-five percent increase in the size of rookie contracts, minimum contracts, and mid-level contracts.[7] More roster spots for teams to develop young talent and a shorter preseason so games are less concentrated in the regular season.[8] In sum, the new CBA is seen as a huge win for players as union representatives Chris Paul, Lebron James and Carmelo Anthony were able to throw their weight around and make the players more money (especially star players of their ilk). However, owners should be pleased too, the provisions that incentivize players to stay with smaller market teams that drafted them means that should they be lucky enough to acquire a star player they won’t have to worry about him leaving to join other stars in a huge market and have higher hopes for competing for championships, putting fans in the seats, and selling merchandise.
Footnotes
