NBA, union ratify new CBA; goes into effect July 1

The NBA and National Basketball Players Association announced Wednesday night they have ratified the recently agreed-upon new collective bargaining agreement, one that will ensure labor peace through the remainder of this decade.

The new deal will go into effect July 1 and remain in place until at least the summer of 2029, when both sides will have the option — as they did in the current deal — to either opt into the final year of the deal or opt out to negotiate a new one.

The new agreement has several new elements designed to curb spending for the league’s highest-paying teams, specifically the Golden State Warriors and LA Clippers. Chief among them: the creation of a “second apron” above the luxury tax, one that will severely hamper teams if they go over it.

Some of those limitations include the inability to sign any free agents for more than a minimum contract, being unable to use cash in trades and being unable to sign players on the buyout market after the trade deadline.

The new agreement, however, creates a lot of flexibility for everyone besides the handful of teams that don’t go over that second apron. The lower bands of the luxury tax were reduced to make it less painful to spend into it, trade restrictions were loosened to make deals more possible — including the midlevel exception now allowed to be used as a trade exception — and increasing the size of both the midlevel and biannual exceptions.

The deal also codifies the much discussed in-season tournament, which will begin next season, and increased the limits on veteran extensions from 120% of their previous salary to 140%, while also providing opportunities to invest in funds through the NBPA that will allow them to have small stakes in both NBA and WNBA teams, giving players a chance to directly benefit from rising franchise valuations.

Both sides came to the new agreement in the early morning hours of April 1, shortly after the deadline for both sides to opt out of the current agreement had expired at midnight on March 31. If there hadn’t been an agreement, the NBA had already indicated it was going to opt out of the current deal, and there would have been a labor stoppage this summer.

Instead, there is continued labor peace in the NBA, something that has been the case since 2011, as this is now the second straight agreement that has been achieved without a work stoppage.

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