On Tuesday, the NBA announced that the proposed plan to play a truncated 72 game season, which was approved by the Board of Governors and the NBA Player’s Association (“NBAPA”). In addition, the two sides agreed to amend the current collective bargaining agreement (“CBA”). The most important issues addressed under the amended CBA were the basketball related income (“BRI”) split and the 2020-2021 salary cap and luxury tax.
The league announced that the salary cap and luxury tax would be set at $109.1 million and $132.6 million, respectively, the same figures set prior to the 2019-2020 season. Further, the salary cap will gradually increase by a minimum of 3% each season for the duration of the current CBA, which ends following the 2023-2024 season. The amended CBA also provides if the league’s BRI is lower than its initial projections, each team’s luxury tax, or tax payments, will be reduced proportionate to that decrease in income.
Finally, the escrow system was adjusted under the amended CBA. Typically, when the player’s share of the BRI exceeds the agreed upon designation, a 10% escrow withholding, or reduction, is applied to each player’s salary. Under the amended CBA, this 10% reduction is still in place with the caveat that any reduction of more than the 10% will be spread over a span of up to 2 seasons and that no more than 20% of player’s salary may be withheld in a single season.
The NBA’s 71 day turnaround from the last game played in October to the approved December 22nd start is the fastest in the history of the four major sports. The shortened 2020-2021 season will also mark the third time since 2012 that the NBA failed to play a full 82 game season.