NBA Collective Bargaining Agreement

NBA Collective Bargaining Agreement - T he NBA Collective...

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The NBA Collective Bargaining Agreement (CBA) The National Basketball League (NBA) and National Basketball League Players Association (NBPA) have an agreement in place that governs almost every aspect of the NBA’s business. From player contracts, to the salary cap, to agents; the Collective Bargaining Agreement sets the rules and regulations for all entities of the league. The CBA’s main purpose is to define all rules which every entity of the NBA must abide by. Without a CBA in place, the league would not be able to be as productive as it is. The CBA establishes a salary cap for each year based on basketball related income (BRI). The CBA defines the percentage of BRI which will go to players’ salaries. BRI includes any income received by the NBA or any of its entities such as ticket sales, parking, television deals and much more. The CBA states that the percentage of BRI for players salaries for 2004-2005 season is 49.5% and 51% up till the end of 2011-2012 season. This led to a salary cap of total team salaries of $49.5 million in 2005-2006, $53.135 million for the 2006-2007 season and $55.62 million for the 2007-2008 season. Total team salaries include the salaries of all active and inactive players, verbal agreements, the scale amount of a teams first round pick, and other exceptions and cost related to each specific team. The CBA also guarantees players that players receive 57% of BRI each year, which include player salaries and benefits. Because BRI is a projected figure, players have a certain amount of salary (from 8-10%) withheld in escrow each year. At the end of the year, the money in escrow is either returned to the owners or players after the calculations are complete. The NBA’s salary cap is what is known as a soft cap. This allows teams to go over the stated amount of the cap while using certain exceptions. However, teams that are over a predetermined level of spending are required to pay a dollar for dollar tax when over this limit. The tax money received from the teams over the tax amount are then evenly disturbed (1/30 th ) to all teams below the tax level. The CBA sets minimum team salary of 75% of the cap. If a team falls below this threshold, they are open to fines from the league. The CBA also provides teams with exceptions to be used on certain types of players. These exceptions let teams that are over the cap or would be over the cap with the acquisition of a player, sign players that could not
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normally sign. These are the types of exceptions and who they can be used
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This note was uploaded on 03/10/2010 for the course SPORTS 41506 taught by Professor Clark during the Spring '10 term at Arkansas State.

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NBA Collective Bargaining Agreement - T he NBA Collective...

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