Adrian WojnarowskiNBA Senior Insider4 minute read
As discussions on a new labor agreement continue, the NBA and National Basketball Players Association are expected to extend Wednesday’s early withdrawal deadline, allowing the league and union to continue negotiations on a new collective bargaining agreement at long term, sources told ESPN. Monday.
As the parties pursue an early labor agreement, an important part of what moved talks forward was the NBA’s willingness to ease from its initial push for an upper limit on payroll spending. teams – a de facto hard cap, sources said.
The NBA’s seven-year ABC expires after the 2023-24 season, but Wednesday’s deadline – already extended from Dec. 15 – pushes back both sides’ ability to opt out of the current deal on June 30 and risk the possibility of a lockout.
The NBA Board of Governors voted on Friday to give the league’s labor relations committee approval to issue a June 30 disqualification notice on a labor agreement or extend that disqualification again, officials said. sources at ESPN. The league’s and union’s expected decision to extend that date a second time is rooted in the belief that there is enough commonality in the talks to continue to seek an early labor agreement – without inviting the uncertainty that would come with the declaration of an opt-out.
If the league or union withdraws from the current agreement in effect at the start of free agency on that date, league operations would be shut down. Free agent trades and acquisitions would cease without a new collective bargaining agreement. The risk of losing regular season games would begin in October.
The introduction of the upper spending limit in the talks was rooted in the desire of smaller-market teams to limit spending by franchises such as the Golden State Warriors, LA Clippers and Brooklyn Nets, sources said. In the wake of these big-deal contenders racking up outsized payrolls and luxury tax penalties, the NBA had proposed a system that would replace the luxury tax with a hard limit that teams could not exceed to pay salaries, indicated sources.
The league’s upper spending limit proposal was met with resistance from unions, to the point where it became clear that the upper spending limit was unlikely to be implemented without the will of the NBA. to suffer a lockout and work stoppage, sources said. There is no way to get the new union leadership – President CJ McCollum and Executive Director Tamika Tremaglio – to essentially agree to a hard salary cap at such early stages of negotiations – if ever, sources said.
Wider economic concerns loom for the league which are driving a new working agreement in the weeks and months to come – including the potential bankruptcy of regional sports networks Sinclair/Diamond Sports, which is responsible for broadcasting of 16 of the league broadcasts. teams on local offers. The longer the labor negotiations drag on, the more the owners’ positions are moderate and may harden on financial issues and risk encountering deeper difficulties in reaching a new labor agreement.
Beyond the NBPA, there was also skepticism among the NBA’s smaller markets, who fear that an upper spending limit will achieve the competitive parity the league hopes to achieve, instead forcing well-constructed teams to small markets to break up competing talent nuclei despite a drive to enter the luxury tax, sources said. Under the current system, teams can re-sign their own players and add free agency salary through various exceptions to exceed the salary cap. The NBA’s hard cap would have ended luxury tax payments shared with many small-market teams, forcing the league to find a new mechanism to supplement revenue sharing, sources said. For now, discussions are focused on keeping those elements of the system going and finding other ways to limit the mechanics used by high-spending teams to retain and acquire talent, sources said. The union wants to create more opportunities for mid- and low-spending teams to sign players as well, sources said.
Twenty of the NBA’s 30 teams are currently below the $150.3 million luxury tax threshold – with the other 10 teams due to pay a league-record $689 million in luxury tax penalties during the season 2022-23. Of them, 58% of that is split between the Warriors ($176.5 million), Clippers ($145 million) and Kyrie Irving-Nets post ($80 million). These three teams contributed 73% of luxury tax penalties in 2021-22.
Among other top collective bargaining priorities for the league, sources said:
• Find mechanisms to incentivize top players to participate in more regular season games, which the league considers essential competition, and maximize the league’s impending media rights deals.
• Work on a “smoothing” plan to gradually add the one-time revenue boost into the league’s impending media deal, which would avoid a repeat of the cap spike in 2016 that disproportionately rewarded a class of free agents and selected teams.
• To end the “one-and-done” early entry rule and allow 18-year-old high school players to return to the NBA Draft.
ESPN’s Bobby Marks contributed to this report.
