The NBA and National Basketball Players Association have reached agreement on a new seven-year collective bargaining agreement, promising labor peace through the rest of the decade, sources told ESPN early Saturday morning.
The tentative deal, which starts with the 2023-24 season, was announced by the league and union and is expected to be ratified by league governors and players in the coming weeks. The deal includes a mutual opt-out after the sixth year, sources told ESPN.
Among the key elements of the deal described to ESPN:
The NBA is curbing the ability of the highest-spending teams, such as the Golden State Warriors and the LA Clippers, to continue running up salary and luxury tax spending while still maintaining mechanisms to add talent to the roster. The league is implementing a second salary cap apron -- $17.5 million over the tax line -- and those teams will lose several key team building mechanisms, including the taxpayer mid-level exception, utilizing cash in trades, moving first-round picks in drafts that are seven years away, signing free agent players in the buyout market and taking on more money than is being sent out in trades, sources said.
In recent years, there has been an average of three teams in this highest salary and tax range. The NBA decided punitive luxury tax penalties did not curb spending habits of some of league's wealthiest franchises to exceed cap, and league's hope is these measures will bring more parity to competition. The NBA initially wanted an upper spending limit -- essentially a hard cap -- but the union rejected that kind of monumental change in talks.
Under these changes, Golden State's Donte DiVincenzo, Milwaukee's Joe Ingles, Boston's Danilo Gallinari, Brooklyn's Patty Mills and former Clippers guard John Wall wouldn't have been able to sign with those teams last summer. The Clippers' acquisition of Norman Powell and Robert Covington last season would also not be allowed as LA took on more money than they sent out in the deal with the Blazers.
As a counter to those spending limitations, the new CBA focuses largely on increasing opportunities for the vast majority of teams -- both above and below the salary cap. There will be new spending and trade opportunities for teams at the middle and lower spectrum of payrolls, including larger trade exceptions and new and expanded exceptions to the salary cap. Also, there's a less punitive system for teams at the lower end of the luxury tax, sources said.
In an attempt to curb load management and lost games among star players, the NBA is tying eligibility for postseason awards -- such as All-NBA teams and MVP -- to a mandatory 65 games played. The 65-game minimum does come with some conditions.
The in-season tournament could arrive as soon as the 2023-24 season. The event will include pool-play games baked into the regular-season schedule starting in November -- with eight teams advancing to a single-elimination tournament in December. The Final Four will be held at a neutral site, with Las Vegas prominent in the discussion, sources said.
Each in-season tournament game would count toward regular-season standings; the two finalists would ultimately play an 83rd game that would not count in the regular season. Winning players and coaches will earn additional prize money.
The NBA and NBPA have agreed to increase the upper limits on extensions from a 120% increase on a current deal to 140%, which could have a significant impact on the futures of stars like Celtics forward Jaylen Brown.
Under the current rules, Brown would be allowed to sign a four-year extension worth $165 million. With the extension rules increased to 140%, however, Brown -- who is set to earn $31.8 million in the 2023-24 season, the final year of his current contract -- would be able to reach his four-year maximum of $189 million, according to ESPN's Bobby Marks.
Similarly, Sacramento Kings All-Star center Domantas Sabonis could currently sign a four-year, $111 million extension -- one that jumps up to $121 million with the increase to 140%.
The NBA and NBPA agreed to eliminate restrictions that limited a team to two designated super-max contract players on a roster. Teams weren't allowed to trade for a third super-max player, or sign one to a rookie extension. This rule change could have a near-term impact on the Cleveland Cavaliers, who have two designated super-max contract players -- Donovan Mitchell and Darius Garland - and burgeoning young star center Evan Mobley approaching his rookie extension.
The NBA and NBPA agreed on some improved leverage for restricted free agents, including a 10% increase in qualifying offers and shortening the matching period from 48 to 24 hours.
For the first time since the inception of the modern CBA in 1983, the team and league licensing revenue -- estimated to be worth $160 million for the 2023-2024 season -- will be added into the shared pool of Basketball Related Income (BRI). Owners and players split the BRI money, and that licensing revenue is expected to grow annually with the salary cap in ensuing years.
There is an increase in two-way contract slots, jumping from two to three per team. Two-way contracts were created in the 2017 collective bargaining agreement as a vehicle for teams to develop younger players. It has been seen as a success, as it's become a route to players earning long-term homes in the league, and in several cases becoming major contributors.
Some of the biggest success stories to emerge from the two-way pipeline include: Austin Reaves and Alex Caruso with the Los Angeles Lakers; Duncan Robinson and Max Strus with the Miami Heat; Anthony Lamb with the Warriors; Jose Alvarado with the New Orleans Pelicans; and Luguentz Dort with the Oklahoma City Thunder.
The agreement landed early Saturday morning after both sides agreed to extend a midnight ET deadline for the league to opt out of the final year of the previous CBA. NBA commissioner Adam Silver, NBPA executive director Tamika Tremaglio and negotiators on both sides -- including the NBA's Dan Rube and the union's Ron Klempner -- hammered out remaining details on the agreement, sources said.
After two extensions of the early opt-out deadline, the league's negotiations with Tremaglio and new NBPA president CJ McCollum delivered a deal months ahead of a possible work stoppage.
ESPN's Tim Bontemps and Bobby Marks contributed to this report.