First appeared in BOXSCORE
By Aron Solomon
The NBA and its players have agreed to a new collective bargaining agreement that went into effect on July 1st and will run through 2030. While the deal ensures labor stability, it will also create a small class of very rich players, a class of players earning the minimum, and will seriously harm most of the players earning money in the middle of the range.
Here’s a complete rundown of everything that’s changing with the NBA’s new CBA. Apologies in advance for some of the depth necessary in this explainer – this new CBA isn’t always easy to break down legally or practically.
The NBA’s new collective bargaining agreement will tweak virtually every element of roster-building in some significant way. Trades, free agency, the NBA Draft, and even the salary cap itself will undergo significant changes now that the new deal has taken effect. While the league and the players have agreed on a new collective bargaining agreement that will run through 2030, the deal includes a mutual opt-out after the sixth year.
Part of the thesis of this new CBA is the NBA’s pretty ardent desire to curb the ability of the highest-spending teams, such as the Golden State Warriors and the Los Angeles Clippers, to continue running up salary and luxury tax spending while still maintaining mechanisms to add talent to the roster.
As New York lawyer William H. Cooper points out, “In their preparations for the new CBA, The NBA decided punitive luxury tax penalties did not curb the spending habits of some of the league’s wealthiest franchises to exceed the salary cap.”
As a result, the league plans to curb the spending by implementing a second salary cap apron, which begins $17.5 million over the tax line. The teams that reach that tax mark will no longer have access to the taxpayer mid-level exception in free agency. This rule would have kept the Warriors from signing Donte DiVincenzo, the Bucks from signing Joe Ingles, the Celtics from signing Danilo Gallinari, and the Clippers from signing John Wall.
All-NBA players have historically been able to sign more lucrative contracts, and the new CBA will continue that trend. The highest-paid players in NBA history will continue to be able to sign supermax contracts, which can be worth up to 35% of the salary cap. The new CBA will also allow teams to sign two designated veteran players to supermax contracts, up from one in the previous agreement. The NBA and NBPA agreed to eliminate restrictions that limited a team to two designated super-max contract players on a roster.
Teams also weren’t allowed to have more than two players on their roster who had signed super-max contracts. This rule was designed to prevent teams from hoarding talent and creating these super-teams (editorial note: super-teams rarely actually work – see: Nets – and are bad for the league). The new CBA will also allow teams to sign two designated veteran players to supermax contracts, up from one in the previous agreement. The new CBA funds health insurance for retired players and increased benefits for current players.
However, (and it’s a massive “however”) the new agreement will create a very small class of very rich players, a class of players earning the minimum, and will seriously harm most of the players earning money in the middle of the range – which is very bad for basketball.
The NBA’s new collective bargaining agreement will create a new class of players who will earn the minimum salary. The minimum salary will increase from $925,258 to $1,000,000 in the first year of the new CBA. The minimum salary will increase by 5% each year of the agreement. The new CBA will also create a new class of players who will earn the maximum salary.
The maximum salary will increase from $39.7 million to $42.6 million in the first year of the new CBA. The maximum salary will increase by 5% each year of the agreement. The new CBA will also seriously harm most of the players earning money in the middle of the range. The middle class of NBA players will see their salaries decrease under the new CBA.
The new CBA will reduce the percentage of the salary cap that teams can spend on players in the middle of the range. The new CBA will also reduce the amount of money that teams can spend on players in the middle of the range. The new CBA will create a new class of players who will earn the minimum salary.
The minimum salary will increase from $925,258 to $1,000,000 in the first year of the new CBA. The minimum salary will increase by 5% each year of the agreement. The new CBA will also create a new class of players who will earn the maximum salary. The maximum salary will increase from $39.7 million to $42.6 million in the first year of the new CBA. The maximum salary will increase by 5% each year of the agreement.
Phew! That’s admittedly a lot to digest. When we look at this more summarily and granularly, rather than this deep dive into the terms and numbers, what we’re left with really isn’t great for the players. Well, it’s great for the top 2% of the players, who will become more wealthy than ever, indeed wealthier than any NBA player probably ever dreamed of becoming.
But it’s going to create a super-uncomfortable super-gulf between these highest earners and a new NBA underclass. Sure, it’s a bit off referring to a person who makes a million dollars a year as a part of a labor underclass, but that’s the reality under the new NBA CBA. With the middle class of NBA players seeing their salaries decrease under the new CBA and pay gaps heading to up to $60 million per season or more between the highest and lowest paid players on a team’s roster, The NBA and its players will have to work together to ensure that the new CBA is as fair and equitable for all players as possible – and that’s going to be a massive challenge ahead.
About Aron Solomon
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the Chief Legal Analyst for Esquire Digital and the Editor-in-Chief for Today’s Esquire. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Forbes, CBS News, CNBC, USA Today, ESPN, TechCrunch, The Hill, BuzzFeed, Fortune, Venture Beat, The Independent, Fortune China, Yahoo!, ABA Journal, Law.com, The Boston Globe, YouTube, NewsBreak, and many other leading publications.
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the Chief Strategy Officer for AMPLIFY. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Newsweek, The Hill, Fast Company, Fortune, Forbes, CBS News, CNBC, USA Today, ESPN, TechCrunch, BuzzFeed, Venture Beat, The Independent, Fortune China, Abogados, Today’s Esquire, Yahoo!, ABA Journal, Law.com, The Boston Globe, and many other leading publications across the globe.
Discover more from Today's Esquire
Subscribe to get the latest posts sent to your email.