By Christopher R. Deubert, Senior Writer
On April 1, the National Basketball Association (NBA) and National Basketball Players Association (NBPA) announced they had reached an agreement on a new collective bargaining agreement (CBA). The new deal, which runs through the 2029-30 season, is relatively unremarkable as there do not appear to be any major changes to the league’s operations. Instead, what is remarkable is that the NBA-NBPA CBA caps a fairly remarkable run of successful CBA negotiations in sports over the past two years.
In those two years, six CBAs have been executed in professional sports: (1) the October 25, 2021 CBA between the United Soccer League (USL) and the USL Players Association (USLPA) concerning USL Championship; (2) the February 1, 2022 CBA between the National Women’s Soccer League (NWSL) and the NWSL Players Association (NWSLPA); (3) the March 2022 CBA between Major League Baseball (MLB) and the MLB Players Association (MLBPA); (4) the November 1, 2022 CBA between USL and the USLPA concerning League One; (5) the recently announced CBA between MLB and the MLBPA concerning minor league baseball; and, (6) the new NBA-NBPA CBA.
These CBAs come on the back of new CBAs executed in the National Hockey League (NHL) and Major League Soccer (MLS) in 2020 and 2021 respectively during the pandemic and CBAs in the National Football League (NFL) and Women’s National Basketball Association (WNBA) in 2020 just before the pandemic.
The New CBAs
Notably, four of the aforementioned CBAs are the first ever CBAs in those leagues, helping to provide uniformity and stability to those leagues’ operations.
Start with the USL. The USL operates two men’s professional soccer leagues. The USL Championship is a Division II league according to the standards of the United States Soccer Federation, just below MLS as the country’s only Division I league. USL League One is a Division III league, below USL Championship. In common parlance, both USL Championship and League One are minor leagues, in a sport which is already of second tier status in the United States. Consequently, these CBAs were largely focused on core employment matters, such as the terms of the Standard Player Agreement, the length of player contracts (February 1 to November 30), club termination rights (broad), clubs’ rights to transfer players (also broad), a salary cap called a “Benefit Spend” ($1.97M in the Championship and $1.3M in League One for 2023), minimum monthly salaries ($2,250 in the Championship and $2,000 in League One for 2023), workers’ compensation, and grievance procedures. The CBAs do not require health insurance or retirement plans and there is no player draft.
The NWSL CBA is similarly brief and focused on core economic items. The CBA set minimum salaries of $36,400 for 2023, established free agency for players after five years, and includes the concept of a salary cap but leaves the amount of the cap generally within the NWSL’s discretion. Unlike the USL, the NWSL agreed to provide its players with a variety of benefits, including full salary protection in the event of pregnancy. The CBA was perhaps most remarkable for its level of cooperation with the union, including an agreement to provide confidential league financial information and the creation of a joint council to address and evaluate ongoing league matters. Indeed, NWSLPA Executive Director Meghann Burke was a part of the committee that selected Jessica Berman as the NWSL’s new Commissioner.
Finally, there is the CBA in minor league baseball. This CBA’s quick execution is surprising given that it was only in September 2022 that MLB even recognized the MLBPA as the bargaining representative for minor league players. Nevertheless, a deal was reached that should provide stability to the players and clubs. After the settlement of a lawsuit in which MLB agreed to pay $185 million to minor leaguers for alleged violations of the Fair Labor Standards Act, the parties agreed to minimum annual salaries ranging from $19,800 in rookie ball to $35,800 in Triple A, a substantial increase from prior minimums. The CBA also improves offseason pay, housing, meals, and travel for players. Lastly, control over player name, image, and likeness reverted back to the players.
The Experienced Leagues
The seemingly peaceful negotiation of the minor league baseball CBA was also surprising given that MLB and the MLBPA had a contentious labor negotiation in early 2022. The league locked the players out in December 2021 and the start of the 2022 season was delayed until the parties finally reached a deal in March 2022. That lockout is a blemish on this recent run of labor peace but is also notable for preserving the status quo. Despite some thought that the MLBPA would seek to change the standards of free agency or salary arbitration for the first time in decades, no such changes were made. Instead, the league agreed to a $50 million performance-based bonus pool to be paid to players not yet eligible for arbitration. Moreover, the parties incentivized teams to call up young players in time to earn a full year of service by providing the teams the chance to earn additional Draft picks depending on player performance. The Draft itself is now also a lottery. Nevertheless, the recent rule changes, such as the pitch clock and elimination of defensive shifts, were unilaterally implemented by MLB.
As mentioned above, the new NBA-NBPA CBA is similarly benign. The parties added a second salary cap level over which teams can no longer take advantage of certain roster construction methods, including the mid-level exception. The limit on salaries in contract extensions was raised from 120% of a player’s prior year salary to 140%. To address concerns over player rest, players must now play at least 65 games to earn postseason awards such as MVP. Finally, the most interesting change is the possibility of a mid-season tournament.
Lessons Learned
The recent run of labor peace is in stark contrast to the era from the 1970s through mid-2000s when most CBA negotiations in the NFL, MLB, NBA, and NHL involved work stoppages and litigation. For better and worse, that litigation largely resolved major legal issues concerning labor relations in sports. Specifically, the significance and scope of the non-statutory labor exemption was clarified, even if its exact end point is still not clear. See Brown v. Pro Football Inc., 518 U.S. 231 (1996). Additionally, many of the attorneys who fought those battles have since left the scene, including Paul Tagliabue and David Stern on the league side and Don Fehr and Jim Quinn on the players’ side.
Perhaps the biggest driver of labor peace has been the gradual change in ownership. Owners that years ago claimed that free agency and out of control player salaries would lead to their financial ruin were proven wrong and are generally no longer in control of clubs. Instead, newer owners have grown up with the financial realities of labor relations in sports, including players’ rights to free agency and a share of league revenues. Acceptance of these realities have helped the parties in each league to work together to grow their respective pies while avoiding the calamity of missed games.
Next on the Docket
The next CBA up for negotiation is that between the NHL and NHLPA, which expires after the 2025-26 season. That negotiation will be interesting in that it pits Gary Bettman, NHL Commissioner since 1992 and league-side attorney before that, against Marty Walsh, the new head of the NHLPA and former Secretary of the U.S. Department of Labor and Mayor of Boston. Bettman has overseen three lockouts that resulted in a considerable loss of games and may see the upcoming negotiation as an opportunity to crown his career with wins for the owners. A major issue in those negotiations will be player participation in the Olympics.
The current NFL-NFLPA CBA runs through March 2031. The NFLPA has reportedly begun its search for a replacement for Executive Director De Smith, expected to leave the post he has held since 2009. NFL Commissioner Roger Goodell is reportedly set to sign an extension that will keep him at the league through the 2027 season, when he will be 68 years of age and may retire. As the league with the most litigious labor relations history, the possible introduction of new chief executives on both sides may eventually spell the end of a sustained era of labor peace.
Deubert is Senior Counsel at Constangy, Brooks, Smith & Prophete LLP.
