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History of the NBA CBA

The National Basketball Association (NBA) has been the top professional basketball league for over 75 years. Chief among them is its collection of talent from all over the world and its organizational structures which allow its players and teams to thrive and achieve their full potential. One such key structure is the Collective Bargaining Agreement (CBA) between the league itself (particularly the commissioner and team owners) and the players’ union – the National Basketball Players Association (NBPA) – and governs the relationship between the two to ensure that day-to-day as well as the “big picture” basketball operations run smoothly. In order to truly appreciate the NBA CBA, one needs first to understand its long history and the many changes it has undergone over the years.

The Origins of NBA CBA (the BAA-NBL Rivalry)

Unlike the stellar working conditions that NBA players have today, players who played in the first few years after its inception had a variety of work-related challenges. Some of the challenges could have been attributed to the growing pains that most young leagues experience while most were brought about by the lack of adequate policies that advocated for the welfare of players.

A quick look at the policies that were enacted after the formation of the league in 1946 (then the Basketball Association of America or BAA) reveals that the league itself set a salary cap of $55,000 for its inaugural 1946-47 season. The logic behind the salary cap was simple – to ensure competitiveness among the teams in the league and protect teams from excessive spending since the league was an infant and did not bring in much revenue.

Players earned an average of between $4,000 and $5,000 with the exception of a few star players who raked in higher salaries on account of their stellar skills on the court. It was also not uncommon at the time for some players to take up additional front-office duties to supplement their income. A good example is Tom King – star guard of the now defunct Detroit Falcons.

The existence of the National Basketball League (NBL) which predated the BAA by almost a decade created a rivalry that ultimately benefited players and saw players like Hall of Famers George Mikan and Bod Davies sign multi-year deals worth tens of thousands of dollars which was unprecedented at the time.

In an attempt to exert its authority as the premier basketball competition in the United States, the BAA poached four top franchises (Minneapolis Lakers, Fort Wayne Zollner Pistons, Indianapolis Kautskys, and Rochester Royals) from the NBL.

As a rebuttal to the passive act of aggression, the NBL awarded a franchise to a group of ex-University of College players who were top prospects. The developments resulted in a steady rise in players’ salaries as each league battled to hold on to its top stars and the fans that came with them, and ultimately culminated in the merger of the two rival leagues in August 1949 to form the NBA that is known and loved today.

Even in the 1940’s the Pro League’s understood that talent brought fans and fans brought money.

The Celtics Legend Who Sparked Change

From the late 1940s through to the early 1950s, the league experienced steady growth in both its quality and following. Player working conditions however largely remained the same. Despite the fact that the average player’s salary had increased to around $8,000, players lacked most of the protections and privileges that are viewed as normal today.

Chief among the problems was the lack of a minimum wage, which was further compounded by the absence of a pension plan, health benefits, and per diem. The latter was particularly insulting since it meant that players were responsible for their own lodging, meals, and any related incidental expenses which put a dent in their already meager earnings.

An excerpt from a publication by Gonzalo Vázquez named 101 NBA Histories put the sad state of things at the time into perspective. The sad tale details how players would often have to be woken from their sleep and have to carry their bags for around a mile to the nearest towns since they couldn’t afford to take trains that ferried fans to the games.

The trips would often start late at night or in the wee hours of the morning making it highly likely that the players would run into unscrupulous individuals who they had to ward off. They would then divide themselves into groups and share cabs across tens of kilometers to arrive at the venue of play.

Looking to change the status quo, former Celtics point guard Bob Cousy conceptualized the idea of forming a player’s union to advocate for players’ rights and check against excesses by the league and franchise owners. To kick start his campaign, the six-time NBA champion first wrote to a top player from each of the teams in the league. The 1957 NBA MVP’s idea was to introduce the idea to players through a leader in their team that they respected to maximize the chances that the players would get on board with it.

The said top players were Paul Arizin (Philadelphia Warriors), Don Sunderlage (Milwaukee Hawks) Carl Braun (New York Knicks), Bob Davies (Rochester Royals), Dolph Schayes (Syracuse Nationals), Paul Hoffman (Baltimore Bullets), and Andy Phillip (Fort Wayne Pistons).

Cousy’s strategy worked as all of the top players welcomed the idea with the exception of Philip, who avoided the topic since it was well known that the then owner of the Fort Wayne Pistons, Fred Zollner – a machine works plant owner – was categorically against unions and any idea of unionizing.

Having ensured his fellow players’ cooperation, Cousy then approached former NBA commissioner Maurice Podoloff at the 1955 NBA All-Star Game with a list of issues that players wanted to be addressed. They included:

  1. That the NBA holds a maximum of 20 exhibition season games per year and the even distribution of profits from said games among players.
  2. Ensuring that former Baltimore Bullets players received back payments of their wages (the team had folded in November 1954 becoming the last NBA franchise to do so).
  3. The abolition of the $15 “whispering fine” that NBA officials could give players during games to encourage more accountability.
  4. The creation of an impartial board of arbitration to settle disputes between players and franchise owners.
  5. The payment of player salaries in 10 installments rather than 12 to provide a cushion for players who may be cut during the season.
  6. The payment of $25 to players for public appearances other than league-related media obligations and charity activities.
  7. The payment of transportation costs (per diem) and relocation/moving expenses for traded players.

Podoloff initially showed a willingness to address the concerns and even dealt with the issue at hand – the back-payments to former Baltimore Bullets players – by agreeing to the payment of two weeks’ salaries to six players and pledging to meet with player representatives within a fortnight to iron out the remaining issues.

The Need For a CBA

Rather than meet on the date they had agreed upon, Podoloff and the owners continuously postponed the sitting leaving players with a bad taste in their mouths. Further compounding the problem was the fact that the league and franchise owners hadn’t officially recognized the NBPA as a union which made them not accord the matters they raised the seriousness they deserved.

In order to remedy the situation, Cousy began talks with officials of the American Federation of Labor and Congress of Industrial Organizations (AFC-CIO) in January 1957 with the aim of having the NBPA join it.

The crafty move finally jolted Podoloff and league owners into action and resulted in a meeting that was held the following season where the NBPA was officially recognized by the NBA’s Board of Governors. The concerns that they had raised through Cousy at the 1955 NBA All-Star Game were also addressed as follows:

  1. The league agreed to a per diem of $7 along with other reasonable traveling expenses.
  2. The league agreed to pay moving expenses for players traded during the season provided they were reasonable.
  3. The league agreed to abolish the “whisper” fine on a probationary basis.
  4. Exhibition games within three days of the season opener or on the day prior to a regular season game were abolished. There would also only be a maximum of three exhibition games during the season
  5. A previous rule that required regular players to report to training camp earlier than four weeks prior to the season was abolished.
  6. Disputes between players and owners would be heard by either the NBA League President or a committee of three NBA Governors that would be chosen by the player(s) in question.
  7. Teams were required to draft and mail new player contracts no later than September 1.
  8. Teams were to ensure that players who made radio and television appearances were treated accordingly.
  9. The number of teams in the 1957-58 playoff pool would be increased to encourage more competition.

After registering its first victory in 1958, it became apparent that there was a need for a flexible long-term framework between the NBPA and the league in order to ensure a cordial relationship between stakeholders.

The realization that the success of the negotiations came down to the unyielding will of the NBPA’s representatives and its president, Cousy, also made the union weary of the need for continuity. The need for stability became evident especially after Cousy resigned as president in 1958 following the refusal by a majority of players to pay the NBPA’s annual $10 union subscription fees – fees that were meant to aid the NBPA in its advocacy activities.

The First NBA CBA  – 1964

Before the signing of the first NBA CBA in 1964 much change would have to happen in the league.

After Cousy’s departure as president in 1958, he was replaced by his Celtics teammate Tom Heinsohn. The former power forward initially took Cousy’s passive approach during negotiations with the league. Among his first objectives was to institute a pension plan which would pay retired players over the age of 65 a monthly stipend of $100 and $200 for at least 5 and 10 years of service respectively.

The league and franchise owners initially showed a willingness to adopt the idea and even agreed in principle to a pension plan whose finer details were to be worked out at a subsequent meeting. Negotiations however failed to bear any fruit prompting Heinsohn to take a more aggressive tone by hiring Lawrence Fleisher – a renowned labor attorney and hard-nosed negotiator – as the NBPA’S General Counsel in 1962.

Fleisher injected some much-needed professionalism and set the necessary structures to give the NBPA more bargaining power ahead of the historic 1964 NBA All-Star game. The league had experienced a surge in growth as a sports commodity thanks to improved teams and star players like 11-time NBA Champion Bill Russell, Wilt Chamberlain, and Jerry West.

Advancements in TV such as the improvement in the quality of color pictures and the addition of channels had positioned the NBA for its introduction to a nationwide audience making the game with its biggest stars – the All-Star game – an important opportunity for the NBA to establish itself as one of the leading professional leagues in the country.

Sensing the unique position that the developments put them in, players threatened to boycott the January 1964 All-Star game unless their immediate concern – a rock-solid pension plan – was agreed upon.  Their determination to follow through with the boycott prompted then-NBA President, Walter Kennedy, to extend an olive branch by personally guaranteeing that a pension plan would be agreed upon in the league’s next owners’ meeting that May.

 Other issues the NBPA wanted to address included the removal of Saturday night games which preceded televised Sunday afternoon games, an increase in player per diem (that was commensurate to the increased cost of living), a reduction in the number of preseason games, the allowing of player free agency, and making the use of team trainers a standard practice for all teams.

These concerns formed the bulk of the first NBA CBA in 1964 and marked the first significant victory for the NBPA. The initial agreement underwent several changes in the following years particularly after two-time Hall of Fame inductee Oscar Robertson (then of the Cincinnati Royals) took over as president from Heinsohn in 1966.

The Fallout of the First NBA CBA

Like his predecessors, “the Big O” quickly began ruffling the league’s and owners’ feathers by announcing that the players’ union intended to ask that exhibition games be reduced from 15 to 10 every season and that players be paid for exhibition games at the 1967 All-Star game. Displeased by the announcement, the league and owners threatened to cancel that season’s playoffs unless players complied with the terms of their current contracts.

In turn, the NBPA called their bluff by threatening to boycott the playoffs unless their pension plan was reviewed upward and to seek certification from the National Labor Relations Board, which would have made the league subject to stricter labor regulations and handed players more bargaining power.

The standoff proved to be the necessary catalyst that forced the warring parties to hold discussions in good faith resulting in arguably the most significant pro-player developments since the inception of the NBA. Its details included the following:

  1. The creation of a specialized committee that was tasked with reviewing standard player contracts ahead of the 1967-68 season. The said committee succeeded in getting the NBPA and the league to agree to the terms in 2 and 3 below.
  2. An increase in the minimum rookie salary was raised to $10,000 for their 1968-69 season and $13,000 for their 1970-71 campaign. This formed the basis for future NBA rookie contracts (four-year deals for first-round picks with team options for years three and four).
  3. An increase in veteran salaries to $12,500 for their 1968-69 and $13,500 for their 1969-70 seasons respectively. This formed the foundation for veteran minimum contracts which are currently capped at around $2.6 million.
  4. An 82-game cap on regular season games – this development provided the norm that stands to date.
  5. Significant improvements in insurance and medical benefits.
  6. The removal of games played before the All-Star Games – created the tradition of no regular season being held in the period right after the trade deadline.
  7. An increase in the monthly pension for players with at least 10 years of service to $600 a month at age 65. All active players at the time would also receive the pension retroactively to the beginning of their careers.

Key Victories of Subsequent NBA CBAs

With the emergence of the American Basketball Association as a serious competitor in 1967, changes in the NBA were nothing if not inevitable. Both leagues battled it out for the top players with each managing to acquire, retain or “steal” its own list of stars.

In order to reduce chances of poaching or defection to its rival, the NBA became more receptive to player issues resulting in a number of CBAs in the following years. Here are a few of the notable highlights of each:

1970 NBA CBA – the NBPA and the NBA agreed to a new three-year CBA that enforced increases in the number of teams in the playoff pool, the league’s minimum salaries, and players’ per diem allowances.

Talks of an NBA-ABA merger further allowed the NBPA to table other pressing issues such as the infamous option clause which teams exploited to tie a player to one franchise indefinitely and the college draft which forced players to only have negotiations with one club. The league gave in to the demands allowing players free agency and limiting teams’ rights to drafted players to only one year. Unsigned players were thereafter allowed to re-enter the draft.

1974 NBA CBA – the league and the players’ union signed a six-year CBA that increased the minimum salary from $20,000 to $30,000. Players’ per diem and pension benefits were also significantly increased the per diem along with term life insurance and medical coverage (including dental).

Players’ shares of All-Star games proceedings and the number of teams involved in the playoff pool were also revised upwards. These developments paved the way for the removal of a court order that barred the NBA-ABA merger which was finalized in 1976 allowing players the freedom to negotiate with any NBA team of their choice and to find contracts that suited them best.

1980 NBA CBA – a new three-year CBA was agreed upon between the NBA and the NBPA which abolished no-trade agreements and increased the league’s minimum salary. During the duration of this CBA, the league and its franchises experienced serious financial challenges that almost culminated in a players’ strike in 1982 since they owed over $80 million of deferred payments to players. A lingering drug problem had also tarnished the league’s image making it a near-unmarketable commodity.

1983 NBA CBA – in order to address the above-named challenges and cushion the NBA and its franchises from an imminent collapse, the NBPA and the NBA agreed to a four-year CBA which guaranteed players a share of licensing revenue ($500,000) and the retaining of at least 253 players in case some of its franchises folded.

The revolutionary introduction of a salary cap also ensured that players received a little over 50% of the league’s gross revenue which included broadcast revenue (local and national TV and radio, revenue from both pre-season and postseason games, and gate receipts).

1987 NBA CBA – this was the first CBA after former NBA commissioner, David Stern, who is credited with establishing the NBA as the top-tier league it is today. The six-year agreement sought to address three main issues: disputes between players and franchise owners concerning the salary cap, the right of first refusal clause that allowed teams to retain players if they matched offers from interested teams in free agency, and concerns about the size of the college draft.

The agreement ensured the continuation of the salary cap while awarding players 53% of the league’s revenue, abolished the right of first refusal after a player completed his second contract while allowing certain veteran players to enter into free agency, and limited the college draft to three and two rounds in 1988 and 1989 respectively.

NBA CBA Failures

While most of the NBA CBAs have acted as vehicles of change, there have been instances where the agreements have fallen short of expectations, left loopholes that either party has exploited to the other’s detriment, or resulted in disputes which caused the stakeholders to fail to agree to a new deal.

In the NBAs illustrious 75-year history, there have only been four lockouts as a result of the failure of the NBA and the NBPA to agree on a new CBA. They are as follows:

The 1995 NBA lockout – the first lockout in NBA history occurred after the 1987 CBA lapsed after the end of the league’s 1993-94 season. The lockout caused the majority of league business to cease including contract extensions, summer leagues, the signing of free agents, and trades.

Only the annual NBA draft and an NBA expansion draft (that brought on the Toronto Raptors and Vancouver Grizzlies) were allowed. The stalemate was resolved after the NBA and the NBPA signed a new CBA ahead of the 1995-96 season which allowed league business to continue as usual.

The 1996 NBA lockout – often considered as more of a “strike” than a lockout, the 1996 NBA lockout lasted only a few hours on July 10, 1996, after the league and the players’ union failed to agree on the division of $50 million of revenue from television rights.

Players demanded more than 50% of the revenue that the league was initially willing to part with. The league in turn countered with an offer of an extra $14 million towards player salaries in the last four years of their then-ongoing six-year deal.

The 1998-99 NBA lockout – the third and longest lockout in NBA history began after owners voted to re-open their then-current CBA in March 1998 to advocate for two issues: to put a hard cap or ceiling on players’ salaries and to suggest changes to the league’s salary cap at the time. Players in turn demanded the raising of the league’s minimum salary.

The infamous lockout lasted a full 204 days from July 1, 1998, to January 20, 1999, resulting in the playing of only 50 games that season. The All-Star game and break were also canceled. The league through commissioner David Stern and the NBPA ended the standoff by hurriedly signing a deal on January 6 which introduced a pay scale for NBA rookies and allowed players to seek maximum salaries.

The 2011 NBA lockout – the fourth and final NBA lockout lasted for 161 days from July 1, 2011, to December 8, 2011. It started after the NBA and NBPA failed to agree on a new CBA following the expiry of the six-year-long 2005 NBA CBA.

Teams were rendered incapable of signing, trading, or contacting players with the season being reduced to 66 games from the normal 82. The bones of contention were proposals by owners to reduce the players’ revenue share from 57% to 47% as well as the introduction of a hard salary cap and stiffer luxury tax penalties to encourage competitiveness throughout the league.

Players largely countered by demanding 53% of the revenue share as the other two issues mainly affected NBA franchises. The parties agreed to a revenue share of between 49% and 51.2% and the two remaining proposals.

What to Expect in the Upcoming CBA (Another Lockout)?

In the years since the 2011 NBA lockout, the NBA and the NBPA have enjoyed a cordial relationship making it highly unlikely that there will be another lockout in the foreseeable future. While both parties have largely remained tightlipped on the contentious issues that will be addressed, insiders suggest that talks will largely revolve around two concerns: players’ contracts and a proposal by the NBA to introduce an upper spending limit in order to keep the league competitive.

Respected pundits like Adrian Wojnarowski, Stephen A Smith, and Chris Broussard have gone on record to state that franchise owners will likely “take it out” on the players by demanding certain performance guarantees from players, especially those who sign max deals.

Cases such as those involving Brooklyn Nets duo Kyrie Irving (during the COVID-19 pandemic) and Ben Simmons (during his ill-reputed exit from the Philadelphia 76ers) as well as that of former Houston Rockets and Washington Wizards point guard, who got paid a little over $44 million to sit out for an entire season while healthy is highly likely to form the subject of the discussions.

When is the next NBA CBA negotiation due?

The current NBA CBA agreement is due to expire in June 2023, at the end of the 2023 NBA Finals. The two parties have already agreed to extend the deadline to opt out of the current CBA from 15th December 2022, to the 8th February 2023. This date is looming and unless an agreement is made to extend that deadline again, the June 2023 expiration for the current CBA will be locked in.

Will there be a lockout ahead of the 2023/24 season?

It is entirely possible that there will be a lockout ahead of the 2023/24 NBA season. While it’s never guaranteed and players and franchise owners alike have a mutual interest to keep the machine rolling, it does form a singular opportunity for both sides to push for the change they feel is most needed.

Don’t rule it out.