KEY POINTS
The following are the key points agreed to by the NBA and the Players Association in their new 6-year collective bargaining agreement:
Players will be guaranteed to receive 57 percent of league revenues (BRI), the same percentage paid to players the last two seasons. (This is the first time the league has ever agreed to guarantee the players an agreed-upon percentage of revenues.)
The Salary Cap will increase from 48 percent of BRI to 51 percent of BRI. All Cap exceptions will remain unchanged, including the Mid-Level Exception ($4.9 million per team this past season).
The amount of money that can be withheld from player salaries under the “escrow” system will be reduced from 10 percent of salaries in year 1 of the new deal to 9 percent in years 2 through 5 and 8 percent in year 6. The 57 percent escrow level will increase with revenue growth.
The effect of the existing luxury tax on teams will be reduced and there will be no additional taxes. The tax level will be set at 61percent of league revenues (the same level as in the 2001-02 – 2003-04 seasons). Tax treatment for injured players and minimum salary players will be liberalized.
The maximum length of a player contract will be reduced by 1 year, from 7 years for a team’s own players and 6 years for other players to 6 years and 5 years.
The league will guarantee that, on average, all teams will have 14-player rosters.
The maximum annual increases in multi-year player contracts will be reduced from 12.5 percent for a team’s own players and 10 percent for other players to 10.5 percent and 8 percent.
Players will be subject to 4 random drug tests per season and penalties for use of performance-enhancing drugs will be increased.
The age limit for entering the draft will increase from 18 to 19 (plus one year removed from high school).
Players will have the right to an arbitrator’s review of Commissioner suspensions for on-court misconduct of more than 12 games (currently, no arbitrator review is permitted regardless of the length of the suspension).
Players in their first two seasons in the league may be placed on teams in the NBA Development League for skills development.
There will be an increase in the minimum salary and benefits. Pension benefits will be increased subject to IRS approval.
While the agreement is being reduced to a definitive writing, the moratorium on free agent signings presently scheduled to expire on July 14 will be extended to July 22. During this period, summer leagues may be conducted, rookies may be signed, and free agents will be permitted to negotiate, but may not sign, new contracts.
