NBA collective bargaining agreement notes: On player investment, draft combine changes and more

The NBA’s new collective bargaining agreement has finally been released. It’s a nice 676-page read, if you’re into that sort of thing. The Athletic also has put together a shorter primer on the whole thing, which focuses on the new economic system that teams will operate under starting July 1.

But there is plenty in the new CBA, and a whole lot of interesting new rules that deal with other aspects of the league. Nothing might be as novel and ripe for conversation as the new rules that will allow NBA players to invest in NBA teams and WNBA teams, as The Athletic reported in April.

•  NBA players will now be able to take their small slice of the skyrocketing franchise valuations that have turned NBA teams into multi-billion dollar entities. While a player still cannot have a direct ownership stake in an NBA team or any company that owns a stake in a team, the National Basketball Players Association can now invest in an investment fund approved by the NBA to buy a passive, minority share in an NBA team. That investment may not be for more than 5 percent of the money raised for that fund.

As of right now, however, this process is still in its early stages, and the details are being filled in on how this will work, according to a league source. The NBA has currently approved three private equity funds to invest in NBA teams — Arctos Sports Partners, Dyal HomeCourt Fund and Sixth Street — but the NBPA has not invested in any of them. The league and the union are still working to ensure the process abides by the appropriate labor and securities laws.

The union and the NBA will form a joint committee that will examine player investment in NBA teams. They will also look at the possibility of amending the CBA in the future to allow for individual players to invest collectively through a pooled fund or individually into NBA-affiliated businesses (reworded slightly). This investment committee will be made up of six people, with the NBA and the union each appointing three of them.

NBA players may also own less than 1 percent of any publicly traded securities in a company that directly or indirectly owns an NBA team — down from 5 percent in the 2017 CBA.

An NBA player will now be allowed to buy stakes in WNBA teams, though those franchises must be ones in which no NBA team owner, or family member of the owner, has an ownership stake. The player cannot buy more than a 4 percent stake in a WNBA team, and players combined cannot own more than 8 percent of a WNBA team. If an NBA owner buys a controlling share in a WNBA team in which an NBA player is invested, then the player will have to sell his stake. No player agents or representatives may invest in WNBA teams.

• Players will now be able to invest in sports betting and cannabis companies too. They can invest in sports betting and fantasy sports companies as long as their ownership stake does not exceed 1 percent in any company taking NBA bets or contests, and it must be less than 50 percent in gaming companies that don’t take NBA wagers. They must be passive stakes. Players can also publicly promote or endorse these kinds of companies; the promotion is limited to general brand promotion or promotion of bets on leagues other than the NBA. (It’s unclear whether promotion of bets on the WNBA is allowed.)

•  Players can now hold direct or indirect ownership shares in companies that sell CBD products but do not produce or sell marijuana products. Players can have passive ownership stakes in companies that sell marijuana products but they must hold less than a 50 percent interest in that company. A player can promote or endorse any CBD product or company that sells only CBD products, but he needs to request permission from the NBA and the union to promote any CBD products that are sold by a company that also sells marijuana products.

Combine changes

The NBA Draft Combine will be changing going forward, as all invitees are now required to attend and participate in testing and drills (live scrimmages remain optional). Prospects will also have to undergo medical testing and exams, which were previously optional. If a player doesn’t fulfill those obligations, he will be made ineligible for the draft.

This will address what had been an issue for some teams in the past: High-profile draft prospects refusing to share their medical history with certain teams. That medical information will now be shared selectively. The league will set up a ranking system for the players in the draft (using two publicly available draft rankings and by using the rankings of two hand-selected individuals with that kind of experience — what the CBA calls a “Combine Player Ranker”) and share the medical information only with the appropriate teams.

The player ranked at the top of the draft class will have his medical info shared with the teams picking 1-10; players ranked 2-6 will have their info shared with teams drafting 1-15; players ranked 7-10 will have their info shared with teams drafting 1-25; all other players will have their information shared with all teams. If a team trades up in the draft, it will get the medical information for the players associated with that draft slot, though it’s unclear what would happen on draft-day trades, when deals are often agreed upon but not yet considered completed by the league.

The NBA and the NBPA will also consult each other to create a list of jointly recommended questions they can provide to teams to use at interviews during the combine. Teams are not bound to use those questions.

About those awards…

As The Athletic previously reported, there will be a games played requirement to win postseason awards or to make an All-NBA or All-Defensive team.

A player will have to have either played in 65 games that season or played in at least 62 games, suffered a season-ending injury (as defined by the CBA) and played in at least 85 percent of his team’s games before he got hurt. To hit those 65 games, the player must have played in at least 20 minutes in all but two of those games and played at least 15 minutes in the other two games.

There is a grievance process set up for players to contest being left out of postseason honors. He can make the case his team willfully limited his minutes to deprive him of the postseason honors. But a player can bring a grievance only in a season in which making a postseason team or winning an award would have impacted his ability to reach the league’s criteria to earn more than 25 percent of the cap on a rookie extension or qualify for a veteran max extension.

Worse for wear?

There is a clear split between the NBA and the NBPA about whether wearables — devices worn during workouts that measure performance or physiological data such as heart rate — should be used during games. It’s laid out in the CBA. The NBA prefers players use wearables during games; the union doesn’t and would prefer it be an option for players but only if some rules about how the data are used are changed. To try to reconcile that, the two sides will continue to discuss wearables usage, but for now, they cannot be used in games, as has been the status quo. Teams can request that a player wears a kind of wearable during practice, but he can decline. Only pre-approved wearables can be used, and the CBA lists nine different companies and their specific products that have been approved.

Odds and ends

• Starting next season, teams will be able to play in a game on the same day that it traveled across two time zones. That won’t lead to a lot of back-to-back games after heavy travel. In fact, the use for this clause is expected to be minimal, and the players association will be notified ahead of the schedule being formalized to lodge any concerns if it has any. The change may lead to a few more back-to-backs into Phoenix, say from Texas or Oklahoma City, for example, toward the start and end of the season, when Phoenix is two hours behind those locations.
• Games on Jan. 1 and Good Friday can’t start before 6 p.m. local time.
• All NBA players, except for those on two-way and 10-day contracts, will receive free access to NBA League Pass.
• The prizes awarded to players for the NBA’s in-season tournament are as follows: $500,000 to each player on winning team; $200,000 to each player on the second-place team; $100,000 to each player on a semifinalist; $50,000 to each player on a quarterfinalist. These amounts will go up each season in proportion to basketball related income growth each cap year.

(Top photo: Jerome Miron / USA Today)