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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 needs to be ratified by both sides, reflects cooperation between owners and players.
One provision allows more flexibility for players to invest alongside owners — managers, in NBA parlance — in non-NBA businesses. The previous 5 percent safe harbor limit is doubling to 12.5 percent, according to a person familiar with the document, who spoke on condition of anonymity because he was not authorized to discuss it.
The agreement also allows players to invest directly in independent WNBA teams or those not owned by NBA owners. The investment of 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 specific terms of the new CBA.
The latest talks mark the second consecutive drama-free CBA renegotiation since the controversial 2011 lockout that shortened the season to 66 games. The partnership has benefited both parties, with the value of the franchise growing by over 700% since 2011 and players earning more than ever before. That year, Kobe Bryant was the only player to make 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 have recognized the benefits of joint business and want to place fewer restrictions on that ability. Last year, Fanatics CEO Michael Rubin sold his stake in Harris Blitzer Sports & Entertainment, which owns the Philadelphia 76ers and New Jersey Devils. Rubin was HBSE’s third-largest shareholder behind Josh Harris and David Blitzer, but conflicts are 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 who invested in sportswear company Mitchell & Ness, which Fanatics purchased in 2021 for $250 million. Devin Booker, Chris Paul and C.J. McCollum were other NBA players who joined the Mitchell & Ness table with actor Kevin Hart, NFL player Odell Beckham Jr. and CEO 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 final 2020 CBA narrowly passed with 51.5% in favor and 48.5% voting no. After two years of seasons affected by COVID-19, MLB nearly sabotaged a third straight year in 2022 when owners imposed a lockout and labor talks dragged into March, delaying the start of the season.
High salaries and franchise value have helped the good mood in the NBA, but Adam Silver also deserves some of the credit. Since taking over as commissioner in 2014 from the more combative David Stern, Silver has encouraged a more cooperative dialogue with players.
Silver addressed player relations and CBA negotiations during a news conference following the NBA Board of Governors meetings last month. “I would say throughout the discussions there was a very positive tone and continued the strong sense of partnership we have with our players and the players’ association.”
Silver believes a 50-50 revenue split is a critical component of this. “It’s about both transparency and that sense of partnership where we can all step back and say, ‘Okay, when we’re done with these negotiations, the goal is to be further incentivized to make the investments in continue to grow the pie, so you have more dollars to share 50-50.”
— Additional reporting from Eben Novi-Williams