NBA players want to be equity partners in the league and will likely pursue that option during the next round of labor negotiations, according to Michele Roberts, executive director of the National Basketball Players Association.
Speaking at a SporticoLive event on Tuesday, Roberts said that while players share in the passion for the game, and in the responsibility of growing the NBA’s multi-billion-dollar enterprise, “what we don’t share is having an equity stake in the teams.”
“We’ve got a collective bargaining agreement that says we can’t [own stakes], and hopefully down the road we’ll make some changes,” she said. “The players will be the last to suggest that we want to see the game’s value, or teams’ values, in any way diminish, but it sure would be nice to be able to go to the party.”
That would require negotiation between the league and the players. The current labor accord, signed in 2016, runs through the 2023-24 season. Roberts said this topic came up briefly during the last round of negotiations, but it wasn’t a major factor in the talks. An NBA spokesman declined to comment.
NBA team valuations have skyrocketed in the last half decade. In 2014, the Milwaukee Bucks sold for a league-record $550 million. The team is now worth $1.86 billion, according to Sportico’s latest valuations. The league currently has three teams worth more than $5 billion; the NFL has just one.
Players do share in the growth of the league in some ways. The current labor accord gives players about 50% of league revenue. As that grows, so too do salaries for first-year rookies and stars like Steph Curry and LeBron James. In addition, the more visible and popular the league is, the more potential value there is for players in marketing and licensing deals. (To that point, the NBPA took back its licensing rights during the last round of CBA talks.)
At the same time, the salary cap is not expanding to the degree that many franchise values are appreciating. The salary cap was $63.1 million in 2014-15, and will be $109.1 million this season.
The league is also making changes to make it easier to attract minority investors. Last year it greenlit Dyal Homecourt to raise money for a fund that could invest in multiple teams. Now it’s discussing an expansion of that program, where other institutional investors could gain the same right.
“If [private equity investment] happens,” Roberts said, “I will have players complain bitterly that, ‘Wow, we helped create this wealth, we helped create this value, and some private equity guy can come in and I can’t?’”
There are certainly hurdles for the players. First and foremost, the league’s current CBA prohibits active player ownership, a rule intended to avoid potential conflicts of interest and salary cap circumvention. Roberts said that while those concerns are legitimate, she believes there are ways to structure a deal that give players equity while still achieving those results.
One suggestion: Instead of giving equity to players themselves, give it to the union. That wouldn’t necessarily result in checks to individual athletes, but it would give the NBPA more resources to support players and their communities. Another suggestion: a structure similar to employee stock options, which are common in other some businesses.
“There’s a way, in other words, for players to enjoy equity in these teams that may be non-traditional,” Roberts said. “It may be a little different from the way we do it on the private side, but I still think there’s an opportunity for us to talk about, think about and ultimately resolve what I believe to be an inequity in the system.”