The NBA and its players union reached an agreement on a new collective bargaining agreement this month that should ensure labor peace through the end of the decade. The latest CBA, which still must be ratified by both sides, reflects the collaboration between owners and players.
One provision allows for increased flexibility for players to invest alongside owners—governors, in NBA parlance—in businesses outside of the NBA. The previous 5% safe harbor limit is being more than doubled to 12.5%, according to someone familiar with the document who was granted anonymity because they weren’t authorized to discuss it.
The agreement also lets players invest directly in independently owned WNBA teams or those not owned by NBA owners. Investments by the player and his family cannot exceed 4%, and he can only invest in one team; players collectively can hold a maximum of 8% in a WNBA club.
The NBA and NBPA declined to comment on specific terms of the new CBA.
The latest negotiation marks a second straight drama-free CBA negotiation since the contentious 2011 lockout that reduced the season to 66 games. The partnership has been beneficial to both sides with franchise values up more than 700% since 2011 and players earning more than ever. That year, Kobe Bryant was the only player who made more than $20 million in salary compared to 61 players who eclipsed that mark for the 2022-23 season, according to Spotrac.
Players and owners recognized the advantages of being in business together and want to put fewer constraints on 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 after Josh Harris and David Blitzer, but conflicts were likely to arise as Fanatics expanded into trading cards and sports betting.
In October, LeBron James, Kevin Durant, James Harden and Joel Embiid were among the NBA players to invest in sports apparel company Mitchell & Ness, which Fanatics purchased in 2021 for $250 million. Devin Booker, Chris Paul and CJ McCollum were other NBA players who joined the Mitchell & Ness cap table with actor Kevin Hart, NFL player Odell Beckham Jr. and record executive Steve Stoute.
The harmony between NBA owners and players stands in sharp contrast to the NFL and MLB, where battle lines are often drawn. The NFL’s most recent CBA in 2020 was narrowly passed with 51.5% in favor and 48.5% voting no. After two years of COVID-19 impacted seasons, MLB almost sabotaged a third straight year in 2022 when owners implemented a lockout and labor negotiations dragged into March, delaying the season start.
Soaring salaries and franchise values have helped the good vibes in the NBA, but Adam Silver deserves part of the credit as well. Since he took over as commissioner in 2014 from the more combative David Stern, Silver has fostered a more cooperative dialogue with players.
Silver addressed the relationship with players and the CBA negotiations during a press conference following the NBA’s Board of Governors meetings last month. “I’d say throughout, the discussions have had a very positive tenor and continued the strong sense of partnership that we have with our players and the players association.”
Silver believes the 50-50 revenue split is a critical component of that. “It goes both to the transparency, but also to this sense of partnership where we all are able to step back and say, ‘All right, when we get done with this negotiation, the goal is to be further incentivized to make the investments to continue to grow the pie to have more dollars to share 50-50.’”
—Additional reporting by Eben Novy-Williams