The NBA and its players union signed a new collective bargaining agreement this month that should ensure labor peace through the end of the decade. The latest CBA, which still has to be ratified by both sides, reflects cooperation between owners and players.
One provision allows players more flexibility to invest alongside owners—governors, in NBA parlance—in businesses outside the NBA. The previous 5% safe harbor limit has been more than doubled to 12.5%, according to someone familiar with the document who was provided confidentially because they were not authorized to discuss it.
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The deal lets players invest directly in independently owned WNBA teams or in teams not owned by NBA owners. The investment by the player and his family cannot exceed 4%, and he can only invest in one team; Players can collectively hold a maximum of 8% in a WNBA club.
The NBA and NBPA declined to comment on the specific terms of the new CBA.
The latest talks mark the second straight drama-free CBA talks since the controversial 2011 lockout that shortened the season to 66 games. The partnership has been mutually beneficial with franchise values increasing more than 700% since 2011 and players earning more than ever before. That year, Kobe Bryant was the only player to earn more than $20 million in salary in the 2022-23 season, compared to 61 players who eclipsed that mark, according to Spotrac.
Players and owners recognize the benefits of being in business together and want to place fewer barriers to that ability. Last year, Fanatics CEO Michael Rubin sold his interest in Harris Blitzer Sports & Entertainment, which owns the Philadelphia 76ers and New Jersey Devils. Rubin was the third-largest HBSE shareholder behind Josh Harris and David Blitzer, but disputes were likely to arise as the Fanatics expanded into trading cards and sports betting.
In October, LeBron James, Kevin Durant, James Harden and Joel Embiid were among NBA players who invested in sports apparel company Mitchell & Ness, which Fanatics will buy for $250 million in 2021. Devin Booker, Chris Paul and C.J. McCollum were the other NBA players who joined Mitchell and Ness at the Cap table along with actor Kevin Hart, NFL player Odell Beckham Jr. and record executive Steve Stout.
The harmony between NBA owners and players is in stark contrast to the NFL and MLB, where battle lines are often drawn. The NFL’s most recent CBA in 2020 narrowly passed with 51.5% in favor and 48.5% voting no. After two years of COVID-19-affected seasons, MLB nearly broke even for the third year in a row in 2022 when owners imposed a lockout and labor talks dragged on in March, delaying the start of the season.
Rising salaries and franchise values have helped create good vibes in the NBA, but Adam Silver deserves a share of the credit as well. Since he took over as commissioner in 2014 from the more combative David Stern, Silver has fostered a more collaborative dialogue with players.
Silver addressed player relations and CBA negotiations during a news conference following the NBA’s Board of Governors meeting last month. “I have to say, the discussions were very positive and continued the strong sense of partnership we have with our players and the players’ association.”
Silver believes a 50-50 revenue split is an important part of that. “It goes to both transparency, but also to this sense of partnership where we’re all able to step back and say, ‘Okay, when we finish this conversation, the goal is to have more incentives to invest. Get more dollars to share 50-50. Continue to grow the pie.’
– Additional reporting by Eben Novy-Williams
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