Collective Bargaining Agreement

NBA Pushing For League-Wide Hard Cap; NBPA Strongly Opposed

The NBA is pursuing a league-wide hard cap as part of the next Collective Bargaining Agreement, according to Adrian Wojnarowski at ESPN and Marc Stein at Substack. However, the idea is viewed as essentially a non-starter by the National Basketball Players Association, per Wojnarowski and Stein.

“There will be a lockout before there’s a hard cap,” a source from the players’ side told Stein.

Currently, individual teams can hard-cap themselves if they acquire a player via sign-and-trade, use their bi-annual exception, or use more than the taxpayer portion of the mid-level exception, as we outline in our glossary entry.

In that scenario, the team are prohibited from surpassing the threshold known as the “tax apron,” which is several million dollars above the luxury tax line. In 2022/23, the tax apron is $156,983,000, while the tax line is $150,267,000.

[RELATED: NBA Teams With Hard Caps For 2022/23]

However, teams that only use the taxpayer portion of the MLE – and don’t acquire a player via sign-and-trade or the BAE – technically have no limit on how much they can spend on payroll. A club faces increasingly punitive luxury tax penalties the further its team salary goes beyond the tax line, but as long as ownership is willing to pay those penalties, there’s no spending limit.

The league is looking to change that by essentially replacing the current luxury tax system with a hard cap for all teams. According to Stein, the NBA is referring to the concept as the “upper spending limit” (USL) in an attempt to avoid the stigma associated with the term “hard cap.”

As Wojnarowski explains, the NBA believes that the current system creates imbalance by allowing for such a disparity between the league’s highest- and lowest-spending teams — the thinking is that a hard limit would help even the playing field, with the league arguing that a more competitive field would result in higher revenues.

According to both Stein and Wojnarowski, support for the idea isn’t unanimous among the NBA’s 30 teams. Some are concerned that an “upper spending limit” would prevent teams from keeping well-constructed rosters together long-term, even if team ownership is willing to pay a luxury tax penalty to avoid breaking them up.

As Stein observes, the Warriors‘ ever-growing payroll is considered a major factor in spurring these discussions. After paying a record-setting $170MM+ in tax penalties last season, Golden State is on pace to break that record in 2022/23 and shatter it again in ’23/24.

While the divide between the NBA and NBPA on the issue of a hard cap is ominous, Wojnarowski points out that the two sides often use the early stages of CBA negotiations to “float wish lists.” It’s possible that the league doesn’t seriously expect to get the players union’s approval for this concept and will ultimately relent, perhaps if the union agrees to give ground on another issue.

The league’s current Collective Bargaining Agreement runs through the 2023/24 season, but the NBA and NBPA each have the ability to opt out by December 15 of this year. If one side opts out, the CBA would instead expire on June 30, 2023. The two sides’ goal is to reach an agreement sometime in the next month-and-a-half.

Here are a few other points of emphasis for the NBA in the early stages of CBA negotiations, according to Wojnarowski:

  • Finding a way to incentivize top players to sit out fewer regular season games.
  • Working out a cap “smoothing” plan in advance of the NBA’s next television deal to avoid another big single-year spike like the one that occurred in 2016.
  • Instituting rules that prevent agents from picking and choosing the teams to whom they supply a prospect’s physical and medical information during the pre-draft process.
  • Implementing some “minimal requirements” related to participation and presence in the draft combine for top prospects.

One-And-Done Rule Likely To Remain For Several Years

The NBA’s “one-and-done” rule will likely remain intact for several years, even if changes are made in the next Collective Bargaining Agreement, Adrian Wojnarowski of ESPN reports in a Twitter thread.

Lowering the current 19-and-over draft age is a significant part of NBA/NBPA CBA discussions — which have already begun in earnest —  but there has been no progress regarding the elimination of the one-and-done rule, says Wojnarowski. Even if changes are made, it wouldn’t be instituted for several years due to commitments already made by teams to trade future draft picks under the current system.

As ESPN’s Bobby Marks notes (Twitter link), 0nly nine teams control all their future first rounders for the next seven years. Many of those traded picks are protected to varying degrees.

Another sticking point in current negotiations is the league’s desire that players provide medical information and physicals to all 30 teams. Many agents have withheld that information from certain teams in order to discourage them from drafting their player. Those particular league and NBPA conversations have yet to begin, Wojnarowski adds, and will be a part of the much larger CBA discussions.

The one-and-done rule was put into place in 2006.

NBA, NBPA Discussing Next Collective Bargaining Agreement

The NBA, led by commissioner Adam Silver, has already engaged in “extensive talks” with the National Basketball Players Association, led by executive director Tamika Tremaglio, about the league’s next Collective Bargaining Agreement, reports Shams Charania of The Athletic.

The NBA’s current CBA runs through the 2023/24 season, but both the league and the players’ union have the ability to opt out of the agreement before then. If either side exercises its opt-out clause by December 15 of this year, the CBA will instead expire on June 30, 2023.

There’s no indication at this point that the NBA is headed toward a lockout. Charania describes the conversations to date as “positive” and says top officials from the league and the union will hold an important in-person meeting next week.

According to Charania, one area of focus for the NBPA in negotiations with the league is the idea of creating lasting equity for its players beyond their standard contract earnings.

“Creating generational wealth is critically important in this next chapter of the union. … We know that the uncertain lifespan (of an NBA career) makes it crucial to plan for what happens after the ball stops bouncing — creating this generational wealth,” Tremaglio told The Athletic. “Thinking about the players’ contributions to the game and how they can be compensated for it will mean there will have to be more equity structures in place.

“It could be the sale of a team. It could be the deals they are entering where they are receiving equity beyond the four or five years that a contract exists. It’s much broader, and I don’t think historically we’ve looked at it. It’s been the here and now.”

Here are a few other issues the two sides are discussing, per Charania:

  • The NBA and NBPA are expected to allow players to enter the draft at age 18 instead of age 19. That would reopen the door for top high school prospects to directly enter the NBA rather than having to spend a year playing in college or in a non-NBA league.
  • The NBA and NBPA are discussing the idea of including mental health designations on injury reports similar to the way that physical injuries are reported, as well as expanding the mental health treatment options provided by teams.
  • The league and some team owners are in favor of introducing more punitive luxury tax penalties. It’s unclear whether changes to the luxury tax system will be mere tweaks or could be more wide-ranging, but Charania says some team executives believe it will be the biggest issue to resolve in the CBA negotiations.

How Rising Salary Cap Could Impact NBA Teams, Players

The NBA’s revenue was significantly impacted in 2020 and 2021 by the COVID-19 pandemic, but rebounded in a big way this past season, resulting in the league’s biggest single-year salary cap bump since 2016.

As John Hollinger of The Athletic writes, the salary cap projects to continue increasing rapidly in the coming years, particularly after the NBA completes a lucrative new television deal that will take effect in 2025. That rising cap will have a real impact on how teams approach contract and extension talks with their players, and how those players weigh their contract decisions.

For starters, the NBA’s Collective Bargaining Agreement prohibits veteran players who are earning more than the league average salary from receiving a raise of more than 20% in the first year of an extension. As a result, players like Dejounte Murray and Jaylen Brown, who have significantly outperformed contracts in the range of $16-26MM per year, are extremely unlikely to sign extensions before they reach free agency, which could result in difficult decisions for teams.

For instance, an inability to extend Murray now and an uneasiness about going all the way to free agency in 2024 with him was believed to be one reason why the Spurs traded the All-Star guard this offseason. Now Brown finds himself in trade rumors as well.

For now, those extension rules are only really creating problems for teams who sign players for less than the maximum and then watch those players prove worthy of max extensions. However, the issue could become more widespread if the cap continues to rocket upward.

According to Hollinger, a “50-60 percent increase in the cap over a period of half a decade” isn’t out of the question, in which case even players who sign maximum-salary contracts may have to put off extensions until their next free agency in order to maximize their earnings.

Given the anticipated cap jumps coming in the next few years, Hollinger suggests that teams may be more willing to lock in long-term deals that look like bad present values, since they’ll be worth a much smaller percentage of the cap by the time they expire. He points to Jordan Poole, RJ Barrett, and Tyler Herro as examples of extension-eligible players who could be worth maximum-salary investments based on current and future cap numbers.

As Hollinger observes, locking in a player to a more lucrative longer-term deal now would also make it more viable to extend that player down the road, whereas a contract like Keldon Johnson‘s new four-year, $80MM pact with the Spurs could make him virtually unextendable if the cap continues to increase by 10% per year (or anything close to it).

Conversely, certain players might become more inclined to seek shorter-term contracts in order to reach unrestricted free agency in 2025 or shortly thereafter, after the NBA’s new TV deal money comes in.

There has been speculation that the NBA and NBPA may agree to “smooth” out a significant salary cap increase across several seasons this time around, rather than allowing a massive one-year spike like in 2016. But either way, the expectation is that there will be an influx of new revenue in the coming years, and the players are entitled to about half of it.

It’s still a little too early to say with any certainty how the NBA’s salary cap outlook is affecting teams’ and players’ decisions, but it’ll be an issue to keep a close eye on going forward.

And-Ones: CBA Negotiations, Williams, Paige, First-Round Picks

With new Collective Bargaining Agreement negotiations likely around the corner, the NBA is unquestionably in a good situation, Gary Washburn of the Boston Globe writes. NBA owners and the NBPA could opt out of their current labor contract in December. The league made $10 billion in revenue last season, which is more than what was expected.

“The numbers did surprise me to a certain degree because they exceeded our projections,” commissioner Adam Silver said. “So to the extent our projections represent where we think our business was going, surpassing $10 billion in revenue clearly is a record for this league.

“I think it’s quite remarkable from where we came only two-and-a-half years ago when the future of this industry was in question, in part because of the pandemic and also people questioning whether people would want to continue to assemble in arenas and stadiums the way they are.”

Here are some other odds and ends from around the basketball universe:

  • Former NBA player C.J. Williams has penned a deal in Israel with Ironi Ness Ziona, the team announced on social media (Twitter link). Williams most recently played in Turkey. He appeared in 53 games with the Clippers and Timberwolves from 2017-19.
  • Free agent guard Marcus Paige has signed in Spain with Obradoiro, the team announced (via Twitter). Paige holds NBA experience with the Hornets and played in France last year, averaging 9.9 points and 3.4 assists per game.
  • Zach Lowe of (Insider-only link) examines why potential Kevin Durant and Donovan Mitchell trades could expand an unprecedented trend in the NBA. Teams appear more willing than they have been in years to include unprotected first-round picks in trade packages for impact players — deals involving Durant and Mitchell will likely involve several first-rounders, just as the Jazz-Timberwolves trade involving Rudy Gobert did.

And-Ones: CBA, Top FAs, Trade Value Ranks, Rookies

The NBA and the National Basketball Players Association are meeting in Boston on Wednesday to discuss the Collective Bargaining Agreement, sources tell Adrian Wojnarowski of ESPN (Twitter link).

As Wojnarowski explains, the league and union both have the ability to opt out of the current CBA this December, so the two sides are having a preliminary meeting as they prepare to engage in more serious talks about a new CBA in the coming months.

Here are more odds and ends from around the basketball world:

And-Ones: Booster Shots, Plumlee, Saunders, Ramasar

The NBA and the Players Association are recommending booster shots for players and personnel who received their Moderna or Pfizer COVID-19 shots more than six months ago, Tim Reynolds of The Associated Press tweets. Those who received the Johnson & Johnson vaccine more than two months ago should also get a booster shot, per the NBA and NBPA. The league is recommending that those who received the Johnson & Johnson vaccine get either a Moderna or Pfizer booster.

We have more from the basketball world:

  • Former NBA big man Miles Plumlee is close to signing with Guang Zhou Loong Lions of the Chinese Basketball Association, Sportando’s Emiliano Carchia reports. Plumlee has previously played in the CBA. He appeared in 19 games with Atlanta during the 2018/19 season, his most recent NBA stint.
  • Former Timberwolves coach Ryan Saunders has found a new gig. He’ll be joining the University of Northwestern-St Paul faculty as an adjunct professor in the spring to teach a class on Sports Leadership, according to Jon Krawczynski  of The Athletic (Twitter links). However, Saunders intends to return to coaching soon. He had several chances to get back into the league but chose to take this season off for family reasons, per Krawczynski.
  • NBA agent Todd Ramasar believes the next Collective Bargaining Agreement will impose penalties on players who try to force trades shortly after signing long-term deals, as he told Ian Begley of SNY TV. “I do think there will be. Without getting into specifics, (I think it will be) similar to how the NBA probably adjusted fines for owners as it relates to tampering,” Ramasar said in an in-depth interview.

League Expected To Push For Super-Max Changes In CBA

League executives are expected to push for major changes in super-max contracts and medical evaluations for draft prospects, among numerous other issues, in the next Collective Bargaining Agreement, according to Jake Fischer of Bleacher Report.

The Ben Simmons saga has shined a light on the general failure of super-max contracts to keep star players on their current teams, Fischer writes. League executives are expected to seek stipulations in super-max contracts that would penalize players if they are granted trade requests. There are also concerns, particularly in small markets, of surrounding those players with enough talent to contend, since those contracts can eat up as much as 35% of a team’s cap.

The fact that Simmons requested a trade only one year into his five-year, $170MM contract from one of the league’s top Eastern Conference contenders has raised concerned among league officials, Fischer reports. Those executives have recently discussed the possibility of salary repercussions for such players who want out.

The proposals could include a “reverse trade kicker,” where those players would lose 15% of their salary when they’re dealt; a forfeiture of upwards of 70% of their salary; or losing a chunk of their guaranteed money.

To encourage the cooperation of the Players Association, the owners may give up a bigger slice of the BRI (Basketball Related Income).

League officials have also expressed frustration that players such as Kyrie Irving don’t have a vaccine requirement, yet basketball and business operations staffers have a vaccine mandate. They’re hoping that discrepancy could lead concessions by the union.

Another major sticking point is that draft prospects are not mandated to provide medical information to teams. Some agents have withheld a prospect’s medical information from certain teams to steer their clients to a preferred destination, Fischer notes.

Luxury-tax structures, the buyout market, G League exclusivity rights, two-way roster spots, the calendar order of the draft and free agency, and restricted free agency could also be topics of discussion during the next CBA negotiations, Fischer adds.

The current Collective Bargaining Agreement runs through the 2023/24 season, with a mutual opt-out date in December 2022.

NBPA’s Roberts: Players Who Miss Games Due To Local Vaccine Mandates Shouldn’t Lose Salary

The National Basketball Players Association didn’t sign off on allowing teams to dock players 1/91.6th of their salaries for 2021/22 if they’re unable to play in a game due to a local vaccine mandate, NBPA executive director Michele Roberts tells Stefan Bondy of The New York Daily News.

The NBA announced last week that unvaccinated players who are ineligible to play in games in New York and San Francisco wouldn’t be paid for the games they miss due to those cities’ local mandates. A follow-up report indicated that the league and the players’ union had agreed on the amount of the fine for such a violation.

However, Roberts tells Bondy that while the NBPA approved that per-game penalty (1/91.6th of a player’s salary) for certain health and safety protocol violations, the union doesn’t believe it should apply to players who miss games solely for being unvaccinated.

“They’ve been reporting that we’ve agreed that if a player who was not able to play because of his non-vaccination status, they could be docked (pay),” Roberts said. “We did not agree. The league’s position is that they can. We’ll see. If we get to that point, we’ll see.”

As Roberts explains, the NBPA’s position is that a player shouldn’t be punished for being unvaccinated, since the NBA has no vaccine mandate of its own for its players. The league’s stance, per Roberts, is that the Collective Bargaining Agreement allows teams to assess those penalties without NBPA approval.

“It’s debatable. We’ll see,” Roberts said. “I’m not going to say it’s impossible, but I’m going to say it’s a bridge we’ll cross, if and when we get there. Right now, we’ve agreed that a player breaks protocols, that he can be disciplined to include some taxing of his comp. But not being vaccinated — because it’s not mandatory — in and of itself should not lead to any discipline.”

As far as we know, the only NBA player who is in real danger of being docked salary for missing games due to his vaccination status is Nets guard Kyrie Irving. The local mandates in New York and San Francisco don’t apply to visiting players, and no other Nets, Knicks, or Warriors players have been reported as unvaccinated. An unvaccinated player in another market – such as Wizards guard Bradley Beal – should still be able to play in all 82 games.

[RELATED: Nets Unsure About Plan For Kyrie Irving]

While Irving, Beal, and a handful of other unvaccinated players have been the subject of an outsized number of headlines since training camps began, Roberts reiterated that the vast majority of NBA players are fully vaccinated. She told Kavitha Davidson of The Athletic (Twitter link) that there’s now a 96% vaccination rate among NBA players, noting that vaccinated players have played a role in helping convince some of the holdouts.

“We’re doing better than companies who are mandatory vaccinations because we’re at 95-96%,” Roberts said to Bondy. “100% is still an aspiration.”

And-Ones: Faried, Injuries, Revenue Sharing, Ignite

Former NBA big man Kenneth Faried signed with Puerto Rican team Leones de Ponce last week, as our JD Shaw tweets.

Faried, who will turn 32 next month, hasn’t played in the NBA since the 2018/19 season, but hasn’t given up on getting back into the league. He reportedly received some consideration from the Knicks in the spring, then played for Portland’s Las Vegas Summer League team in August and worked out for the Lakers in September. For now though, Faried’s professional career will continue outside the NBA.

Here are a few more odds and ends from around the basketball world:

  • ESPN’s team of basketball writers took a league-wide look at the injuries that will (or could) compromise players’ availability for opening night, checking in on where in the recovery process those players are and when we might see them back on the court.
  • Within a larger story about the Pelicans‘ ownership situation and succession plan, team president Dennis Lauscha shared an interesting tidbit, telling Jeff Duncan and Lee Zurik of that commissioner Adam Silver has said the NBA’s next Collective Bargaining Agreement will include an “enhanced revenue sharing model” to further assist smaller-market teams. Kurt Helin of NBC Sports has more details.
  • Paolo Uggetti of The Ringer takes a deep dive into the G League Ignite, exploring where the NBA G League’s developmental team stands after its first season and how the league envisions the program growing in the coming years.