NBA’s CBA Contains New Investment Opportunities For Players

NBA players can now invest in independent WNBA teams and sports betting operators thanks to a new collective bargaining agreement. 

The league’s newly signed seven-year labor deal with the National Basketball Players Association — memorialized in a 676-page document — will impose big changes on how the sport operates.

Agreed in principle in April, the deal creates a second luxury-tax level to curb spending by high-revenue teams, implements a new in-season tournament to elevate the six-month regular season, and establishes a 65-game minimum for players to be eligible for key awards such as All-NBA teams and MVP.

The agreement also details many other, lesser-known elements:

• Individual players can own up to 4% of WNBA clubs not owned by a NBA team owner, and up to 8% of such a team collectively.
• On behalf of all players, the NBPA can invest in private funds acquiring equity stakes in NBA teams, with the union investment capped at 5% of the fund’s aggregate capital.
• Players may hold passive, non-controlling interests in sports betting or fantasy companies. Those equity stakes are limited to 1% for companies offering NBA-related bets or contests, and players can’t promote NBA-specific betting.
• Marijuana has been removed from the NBA’s banned substances list. Players may also promote and invest in companies producing CBD products.

The labor deal presents the league with a key element of certainty as it seeks a lucrative new set of media rights deals. 

Teams and player agents will also need to quickly absorb the document and its ramifications as the window for NBA free-agent negotiations opens at 6 p.m. ET Friday.