By Patrick Barron,
Sports Business Writer
The 2015-2016 NBA season is official underway, and basketball fans everywhere are excited to watch how the new season progresses.
Although fans are excited to watch their favorite teams and players play many do not focus on the business side of the sport. The NBA Collective Bargaining Agreement is a labor agreement between NBA team owners and the National Basketball Association Players Association (NBAPA) that rules the salary cap, player’s contracts, etc. That business side of the sport is gaining importance due to player’s bargaining for better rights and new contracts that the NBA signs with network distributors.
For example, the NBA signed a nine-year $24 billion contract extension with ESPN and TNT. The extension allows NBA games to be broadcasted on those stations until the 2025-26 season, when the parties have to come to a new agreement to continue their relationship.
Another important aspect of the Collective Bargaining Agreement is the salary cap which specifics how much a team can spend on its players for the upcoming season. If a team were to go over that amount they would be punished in adherence to the rules outlined in the agreement, and be faced with a financial punishment.
For example, the Brooklyn Nets were forced to pay $90.5 million in a luxury tax in the 2013-14, league record, for going over the cap. The NBA determines the salary cap by its revenue.
However, with the recent NBA developments, the salary cap is set to explode in the upcoming season from an already record $70 million to almost $90 million dollars.
In addition, with the large jump in mind, many NBA superstars and stars alike are expected to sign major record-breaking contracts in the near future. For example, LeBron James, the Cleveland Cavalier’s superstar player and arguably the best basketball player in the world signed a short deal worth the maximum amount. If there are no changes in the bargaining agreement, his current salary around $23 million can jump up to $30 million plus with a new contract, depending on the cap for the season.
The league’s current biggest and record breaking contract is the New Orleans Pelicans superstar player, Anthony Davis, who signed a 5-year $145 million maximum contract over the summer.
The NBA has proposed several options to the NBAPA in an attempt to lessen the jump in the cap, but the NBAPA did not accept their terms; therefore, the jump will occur. This also leads to speculation as to whether or not the NBAPA wants to have the maximum salary allowed removed from the agreement.
The future of the NBA is unknown at this point, and fans will be disappointed if the two disagreements lead to a lockout where there is a work stoppage between players and owners, meaning no more games for the fans.
Although, the latest bargaining agreement ends after the 2020-21 season the NBA or its player association can opt out by Dec. 15, 2016. If that happens, as some believe it will, the parties will have to agree to new terms for games to continue.
In the end, the NBA and NBAPA have to think of its fans when discussing business and try to come to a compromise because everyone loses out when no one plays.
A version of this article appeared in the Tuesday, November 3rd print edition.
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