June 21, 2005
NBA Commissioner David Stern and NBA Players Association Executive Director Billy Hunter held a joint press conference in San Antonio, Texas before Game 6 of the NBA Finals to announce the NBA and the NBA Players Association have reached a new collective bargaining agreement.
The agreement is subject to the approval of the NBA Board of
Governors and the membership of the Players Association.
The current Collective Bargaining Agreement (CBA) came into effect in 1999 after a 7 1/2 - month long lockout. This current seven year-old CBA was set to expire on June 30 with a lockout starting on July 1 if both sides did not come to an agreement. Both sides recently resumed having talks and a new CBA was agreed upon. Details from the press conference and key points of the new CBA can be found below.
With a new CBA coming into effect, teams and players will be participating in the upcoming
summer leagues shortly after the NBA Draft on June 28.
From the Press Conference:
Press Conference Video
The NBA and the National Basketball Players
Association announced today that they have reached an agreement in
principle on the key items of a new 6-year collective bargaining agreement.
NBA Commissioner David Stern, Players Association Executive Director
Billy Hunter and President Michael Curry announced the new six-year CBA agreement prior to
Game 6 of The Finals in San Antonio.
“This new agreement creates a strong partnership with our players,
which is critical to our prospects for continued growth on a global basis,”
said Stern. “Once the deal is finalized, the NBA and its players will be
able to focus on the enormous opportunities we have together.”
“Although a definitive written agreement must still be completed,”
Hunter added, “we believe we have reached the framework for a deal that
preserves and enhances gains that the players have made under the expiring
agreement. The new CBA deals fairly with the issues that are important to
the league, and gives our sport the continuity that will be so important to
its growth and to its fans.”
The agreement includes an increase in the salary cap, a lessening of
the impact of the luxury tax, a decrease in the escrow withholding over the
term of the deal (to 8%), and a guarantee by the league that the players
will receive no less than 57% of basketball related income (a percentage
that will increase as revenue increases). The maximum length of player
contracts will be reduced to 6 years, from their current 7, and maximum
annual increases in salaries will be reduced from 12½ to 10½ percent for
teams resigning their own players and from 10% to 8% for teams signing free
agents.
On non-economic matters, the minimum entry age will be increased from
18 to 19 years and teams will have the ability to assign players with less
than 2 years experience to the NBA Development League. The number of
random drug tests as well as the penalties for violations will be
increased. The league will guarantee that, on average, all teams will have
14-player rosters, and players suspended for more than 12 games for
on-court misconduct will be able to challenge the suspension before a
neutral arbitrator.
While the agreement is being reduced to a definitive writing, the
moratorium on free agent signings presently scheduled to expire on July
14th will be extended to July 22nd. 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.
The agreement is subject to the approval of the NBA Board of
Governors and the membership of the Players Association.
Key Points of the New CBA:
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% 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% of BRI to 51% 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% of salaries in year 1 of the new deal to 9% in years 2 through 5 and 8% in year 6. The 57% 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 61% 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% for a team’s own players and 10% for other players to 10.5% and 8%.
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.
Draft Party
Draft Central
Summer League
