Kristian Ferrell
The NBA has a history of labor-related issues, with players and the league negotiating and renegotiating agreements. In 2023, a seven-year deal was reached, ensuring labor peace until at least the 2028-29 season. This deal included changes to player eligibility for awards, contract extensions, and roster sizes. The NBA has also faced criticism and legal challenges over its rules regarding player fines and suspensions, with some arguing that they violate players' rights to criticize their employers. In 2024, a US labor official's ruling that college basketball players are employees of their schools set the stage for a potential union vote, marking a significant step forward for college athletes' rights.
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What You'll Learn
The NBPA and labor peace
The National Basketball Players Association (NBPA) is the labour union that represents National Basketball Association (NBA) players. It was founded in 1954, making it the oldest trade union of the four major professional sports leagues in the US and Canada.
The NBPA has been eager to work in a time of labour peace. In 2020, NBPA executive director Michele Roberts spoke of her "joy" at being able to negotiate a new collective bargaining agreement (CBA) with the NBA and its owners. The NBPA has also been recognised for its pursuit of a player-driven process, where players were "not used as props" but were engaged in giving direction.
In 2023, the NBPA and the NBA reached a tentative agreement on a new seven-year CBA, pending ratification by players and team governors. This deal will begin the era of an in-season tournament and will include an 80-game schedule for the 2023-24 season, with "tournament" games counting in regular-season standings. The deal will also see an increase in the maximum value of contract extensions, the addition of a third two-way contract, and a second luxury tax level that will prevent teams from using their mid-level exception to sign players.
The NBPA has also been active in other areas, such as approving negotiations to resume the regular season for 22 teams in the NBA Bubble in 2020, and announcing that over 90% of NBA players had registered to vote in the 2020 presidential election.
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Collective Bargaining Agreement (CBA)
The Collective Bargaining Agreement (CBA) is a contract between the National Basketball Association (NBA) and the National Basketball Players Association (NBPA), which is the players' union. The CBA dictates the terms and conditions of employment for all professional basketball players in the NBA, as well as the respective rights and obligations of the NBA Clubs, the NBA, and the NBPA. This includes rules on player contracts, trades, revenue distribution, the NBA draft, and the salary cap, among other things.
The CBA is typically a lengthy and complex document; the most recent CBA was around 600 pages long and contained nearly 5,000 paragraphs and 200,000 words. The CBA is negotiated and agreed upon by both the NBA and the NBPA, and it is updated periodically to reflect any changes in the league. The CBA can also be amended if either the NBA or the NBPA opts out of the current agreement.
The CBA negotiation process can be lengthy and complex, as both sides work to protect their interests. For example, the 2011 CBA negotiations resulted in a lockout that shortened the 2011-12 season from 82 to 66 games. However, the CBA can also be a source of compromise and collaboration between the league and the players' union. For instance, the 2023 CBA included a second luxury tax level that prevented teams from using their mid-level exception to sign players, addressing concerns about spending limits and a balanced playing field.
The CBA also has a significant impact on the financial aspects of the NBA. The CBA determines the distribution of revenue between the league and the players, with the percentage varying across different CBAs. For example, under the 2005 CBA, players received 57% of the income, while the 2016 CBA provided for players to receive between 49-51% of revenue. The CBA can also influence player salaries, with the average player salary predicted to increase under the new deal. Additionally, the CBA can provide benefits for both current and retired players, such as improved medical care and tuition reimbursement funds.
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Player contracts and extensions
The NBA's salary cap is the limit on the total amount of money that teams are allowed to pay their players. The cap is subject to a complex system of rules and exceptions and is calculated as a percentage of the league's revenue from the previous season. The maximum player salary is based on the number of years a player has played and the total salary cap. The maximum salary of a player with 6 or fewer years of experience is either $25,500,000 or 25% of the total salary cap, whichever is greater. For a player with 7–9 years of experience, the maximum is $30,600,000 or 30% of the cap, and for a player with 10+ years of experience, the maximum is $35,700,000 or 35% of the cap.
There are exceptions to these rules. For instance, a player is able to sign a contract for 105% of his previous contract, even if the new contract is higher than the league limit. Also, certain players in the first few months of a new contract are subject to base year compensation (BYC), which prevents teams from re-signing players to salaries specifically targeted to match other salaries in a trade. A BYC player's trade value as outgoing salary is 50% of his new salary or his previous salary, whichever is greater.
The NBA's labor agreement has had a significant impact on player contracts and extensions. In 2016, a new labor deal was ratified, removing the possibility of a work stoppage at the end of the season. This deal also altered the "over-36 rule" to the "over-38 rule," allowing players like LeBron James to sign five-year contracts. The annual split of basketball-related income (BRI) between players and owners remained at 51-49%.
In 2023, the NBA and its players reached a new seven-year collective bargaining agreement, set to last through the 2028-29 season. This agreement included provisions for increasing the maximum value of contract extensions, adding a third two-way contract, and introducing a second luxury tax level. The new agreement also paved the way for a record number of rookie-scale extensions, with 14 first-round picks from the 2020 draft class signing extensions. Notable deals included Minnesota Timberwolves forward Jaden McDaniels's five-year, $136 million extension, and Atlanta Hawks center Onyeka Okongwu's four-year, $62 million deal.
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Player awards eligibility
The NBA Most Valuable Player (MVP) is an annual award given to the best-performing player of the regular season. Since the 2022-23 season, winners receive the Michael Jordan Trophy, named after the five-time MVP. The NBA now has a 65-game rule, which requires players to appear in at least 65 games to be eligible for most regular-season awards, including the MVP. This rule has been controversial, with some arguing that it unfairly punishes injured players. However, there are protections in place for players who suffer season-ending injuries, who are eligible with 62 credited games.
Additionally, the NBA has amended its eligibility rule to require all players invited to the Draft Combine to attend and participate unless excused for medical or other valid reasons. The Draft Combine is a multi-day event where prospective draftees are evaluated through drills, medical exams, and interviews. If a player does not participate in the Combine, they are not eligible for the NBA Draft.
The Players Association is the exclusive bargaining representative for NBA players regarding the terms and conditions of their employment with NBA clubs. However, it is important to note that the association does not represent prospective NBA players until they have been drafted or have gone undrafted in a draft for which they were eligible.
The NBA also presents other awards, such as the Kia NBA Sixth Man Award, Kia NBA Clutch Player of the Year, Kia NBA Defensive Player of the Year, and the NBA Hustle Award.
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Player fines and suspensions
The National Basketball Association (NBA) commissioner has the power to suspend or fine players for on-court incidents, conduct that does not conform to fair play standards, non-compliance with federal or state laws, and conduct that is detrimental to basketball or the league. The commissioner's power to suspend or fine is also extended to owners, officers, managers, and coaches. The NBA's Collective Bargaining Agreement (CBA) defines the rules regarding player conduct and fines.
Fines in the NBA can be incurred for various reasons and by various people. From 2003 to 2013, the top five most fined offences were for criticizing referees (81 times, totalling $2.1 million), fan confrontation (42 times, totalling $672,500), interaction with referees (35 times, totalling $750,000), and fighting (26 times, totalling $1.5 million). The commissioner is legally obligated to hand out fines and/or suspensions if, in their opinion, players have conducted themselves inappropriately. However, there are no official rules dictating which specific actions warrant these fines.
Players are also eligible for long-term suspensions or permanent bannings in the event of egregious behaviour, such as substance abuse or gambling. Most cases where a player has been banned from the NBA but later reinstated are a result of the league's anti-drug policy, which was started in 1983. The policy, developed jointly by the NBA and the players' association, made a third illegal drug use offence punishable by a ban, with the possibility of applying for reinstatement after a minimum of two years.
If a suspension is longer than 12 games or a fine exceeds $50,000, any party (a player, a team, the NBA, or the NBPA) can appeal to an arbitrator, who has the power to either uphold or reject the commissioner's decision.
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Frequently asked questions
In April 2023, the NBA and the National Basketball Players Association (NBPA) agreed to a new seven-year collective bargaining agreement, which will begin in the summer of 2023 and last through the 2028-29 season.
The new agreement includes an in-season tournament, with teams playing 80 games next season, including four "tournament" games. It also raises the maximum value of contract extensions and introduces a second luxury tax level. Additionally, players must appear in at least 65 games to be eligible for top individual awards.
The NBA and the NBPA have been working towards labor peace, with the NBPA eager to recognize the contributions of retired players and improve relations with the National Basketball Retired Players Association. The NBPA has also been focusing on core values and being proactive about issues and programs.
