New NBA collective bargaining agreement
The NBA Board of Governors has ratified a new
10-year collective bargaining agreement, enabling training camps and the
free agency period for the 2011-12 season to begin on Fri., Dec. 9 at 2
p.m. ET. As previously announced, the NBA will begin its 66th season on
“I am pleased to announce that we have concluded the collective bargaining
process and have reached an agreement that addresses many significant
issues that were challenges to our league,” said NBA Commissioner David
Stern. “This collective bargaining agreement will help us move toward a
better business model, a more competitive league and better alignment
between compensation and performance.”
The agreement includes a 50-50 split of basketball-related income, a higher
luxury tax with progressive tax rates and the retention of a soft salary
cap system. The maximum length of player contracts will be five years
(previously six) and maximum annual increases in salaries will be 7.5% for
teams re-signing their own players and 4.5% for teams signing other teams’
On non-economic issues, the league has bolstered its drug program to
include offseason testing, increased penalties for violations involving
performance-enhancing drugs, and blood testing for human growth hormone
(HGH) once the test is validated by a neutral panel of scientific experts.
Beginning this season, teams can assign veteran players with their consent
to the NBA Development League and, effective with the 2012-13 season, there
will be no limit on the number of times players with three years or less of
experience can be assigned to their team’s NBA D-League affiliate.
The NBA and NBPA have agreed to form a committee to discuss issues related
to the NBA Draft and NBA D-League, including Draft eligibility rules, the
Draft combine, the number of rounds in the Draft and rules related to the
assignment of NBA players to the D-League.
The NBA Board of Governors also voted Thursday to approve a new revenue
sharing plan that will quadruple the funds previously shared among NBA
“The Board realized that it was imperative that our revenue sharing program
be improved,” Stern said. “We have found a solution that should provide
our league with better competitive balance.”
Team training camps and the free agent period will open tomorrow with a
Salary Cap of $58.044 million, a tax level of $70.307 million and a minimum
team salary of $46.435 million.
KEY NBA COLLECTIVE BARGAINING AGREEMENT POINTS
The following are the key points agreed to by the NBA and the Players
Association in their new 10-year collective bargaining agreement:
· Players and owners agreed to a 50/50 split of basketball-related
income (BRI). However, depending on BRI, players can receive as
high as 51% or as low as 49%.
· The Salary Cap will remain soft and has been set for the 2011-12
season at $58.044 million.
· The maximum length of a player contract will be reduced by one
year, from six years for a team’s own players and five years for
other players, to five years and four years, respectively.
· Salaries in new player contracts may increase by up to 7.5% per
year for a team’s own players and 4.5% per year for other free
· Three Mid-Level exceptions now exist:
o For non-taxpayers: Mid-Level exception set at $5 million in
2011-12 and 2012-13, growing 3% annually thereafter; maximum
contract length is four years.
o For taxpayers: Mid-Level exception set at $3 million,
growing 3% annually thereafter; maximum contract length of
o For teams operating with salary cap room: Mid-Level
exception set at $2.5 million, growing 3% annually
thereafter; maximum contract length of two years.
· For the 2011-12 and 2012-13 seasons, the tax rate is $1 for every
$1 in salary over the tax level.
· Beginning with the 2013-14 season, tax rates for incremental
spending above the tax level will increase as follows
o $0-5 million over Tax level: $1.50 for $1
o $5-10 million over Tax level: $1.75 for $1
o $10-15 million over Tax level: $2.50 for $1
o $15-20 million over Tax level: $3.25 for $1
o Rates increase by $0.50 for each additional $5 million above
· The amount of money that can be withheld from player salaries
under the “escrow” system is 10%; if escrow funds are insufficient
to reduce salaries and benefits to 50%, 1% benefit fund is
available to make up shortfall.
· Traded Player Exception for non-taxpayers increased to the lesser
of 150% of salaries of players being traded or the salaries of
players being traded plus $5 million. For trades in which the
salaries being traded exceed $20 million in total, the Traded
Player Exception for non-taxpayers will be 125% of such salaries
· Traded Player Exception for taxpayers remains at 125% of the
salaries of players being traded plus $100,000.
· Except during the 2011-12 and 2012-13 seasons, teams are
prohibited from using a sign-and-trade if their team salary
post-transaction would exceed the tax level by more than $4
million. Sign-and-trade contracts will have a maximum length of
four years and receive 4.5% annual increases.
· For the first five years of the CBA, each team will be permitted
to waive one of its player contracts that was in effect prior to
the 2011-12 season and have 100% of the player’s salary removed
from the team’s salary for Salary Cap and Tax purposes. Each team
may use this provision only once over the life of the agreement.
· The NBA’s drug testing program has been strengthened to include up
to two offseason tests for performance-enhancing drugs per year,
increased penalties for performance-enhancing drugs and blood
testing for HGH once the test is validated by a neutral panel of
· Veteran NBA players can be assigned to their team’s NBA D-League
affiliate for rehabilitation assignments with the players’
consent. Beginning in 2012-13, players in their first three
seasons in the NBA may be assigned to the D-League an unlimited
number of times each year.
· The NBA and NBPA will create a committee to discuss issues related
to the NBA Draft and NBA D-League, including Draft eligibility
rules and rules related to the assignment of NBA players to the
· Non-discrimination language was added into the agreement that
protects players from discrimination, including based on sexual
· Term of the contract is 10 years, with both the NBA and NBPA
holding the ability to opt out after the sixth year.