The NBA and NBPA announced Wednesday that the final version of their collective bargaining agreement has been completed and signed. The seven-year deal kicks off July 1 and runs through the 2029-30 season.
The NBA’s Board of Governors and PA officially ratified the CBA two months ago, but this is the first look at the full 676-page version.
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The agreement introduces new restrictions on high payroll teams; requires minimum games played for awards with several caveats; and introduces positionless voting for All-NBA and All-Defensive Team voting. Many of the biggest changes involve new opportunities for players to invest.
The current CBA is the first that will allow players to capture some of the rising tide of NBA team valuations. Players can’t invest directly in teams, but the players association will be permitted to passively invest on behalf of all players in one or more funds that invest in teams. Final fund approvals and details are still being determined, but the CBA released Wednesday sheds some more light and codifies the plan.
Investments by the PA are capped at 5% of the aggregate capital of a fund. The union will be required to comply with the same restrictions and rules that apply to other investors in these funds, such as minimum investment thresholds. The players association is prohibited from any active participation rights in the funds and can not serve on their advisory committees.
The NBA and NBPA will form a joint investment committee to “study and discuss in good faith” issues related to the investments. The committee is tasked with confirming that any investments comply with existing labor laws. It will be made up of three members appointed by the NBA and three appointed by the PA. “At least one of the members appointed by each of the NBA and the players association must be knowledgeable of private investment funds and their structures,” per the CBA.
The new CBA also offers full details on how NBA players can invest in WNBA teams, another new allowance under this labor accord. Those specifics, which were previously reported by Sportico, stipulate that investments by the player and his family cannot exceed 4%, and that he can only invest in one team. NBA players collectively can hold a maximum of 8% in a WNBA club, and they must sell if the team is later purchased by an NBA owner.
The agreement allows for increased flexibility for players and owners to invest alongside each other in businesses outside of the NBA. The previous 5% safe harbor limit was more than doubled to 12.5%. It is a small tweak but reflects the advantages both see in doing more business together.
The new CBA also details a new framework for NBA players getting involved in two newly legal U.S. businesses—sports betting and marijuana. Players are allowed to buy into sportsbooks as long as 1) the investments are passive, and 2) the player’s equity isn’t more than 1% of the gambling entity. (For betting companies that don’t take NBA wagers, a player can own up to 50%). All of those investments must be disclosed to both the NBA and the union.
NBA players are also allowed to endorse betting companies as long at their participation is limited to general wagering or non-NBA wagering. The rules are similar for marijuana. Players are allowed to invest in marijuana brands as long as those investments are passive and the player’s ownership interest is less than 50%.
The CBA also removed marijuana from the list of prohibited substances, but players are still banned from promoting marijuana brands.
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Source: Yahoo Sports