On Monday, the NBA and National Basketball Players Association "mutually agreed to extend the deadline" to opt out of the league's current collective bargaining agreement from Feb. 8 to March 31, according to an official release. The CBA would expire on June 30 if either side does opt out, and it will run through the 2023-24 season if not.
The decision to push back the CBA opt-out deadline may complicate teams' plans ahead of the Feb. 9 NBA trade deadline. Without a new CBA in place, teams won't know the long-term financial ramifications of any trades they make involving players who are signed beyond this season.
The league was initially pushing to implement an "upper spending limit"—in other words, a hard salary cap—as some teams have grown concerned about their ability to keep up with their deep-pocketed counterparts. The Golden State Warriors and Los Angeles Clippers are currently in line to pay nine-figure luxury-tax bills this season, and the Brooklyn Nets were as well until they traded Kyrie Irving to the Dallas Mavericks.
The NBA is now willing "to soften from its original push for an upper spending limit on team payrolls," according to ESPN's Adrian Wojnarowski. The NBPA had deemed that a non-starter in negotiations, to the point that it had "little chance of implementation without the NBA's willingness to endure a lockout and work stoppage," he added.
Although teams seemingly no longer have to worry about the implementation of a hard cap forcing tough decisions in future years, that doesn't mean the current system will remain in place. According to Wojnarowski, the two sides are discussing "other ways to limit the mechanisms high-spending teams use to retain and acquire talent." Meanwhile, the union "wants to create more opportunities for middle- and lower-spending teams to sign players, too."
Details have yet to emerge about the exact mechanisms the two sides are discussing to limit high-spending teams, although a more punitive luxury-tax system is presumably on the table. If they raise the rates at which teams above the luxury-tax threshold are penalized, it could effectively create a hard cap for even the wealthiest team governors.
Fresh off winning last year's NBA championship, Golden State Warriors governor Joe Lacob told Tim Kawakami of The Athletic that a payroll north of $400 million (when combining salary and luxury-tax fees) was unrealistic.
"I’m going to tell you your numbers are kind of messed up,” Lacob said. “You were throwing numbers out like 400, 500 … those numbers are not even remotely possible. They’re just not."
"There are limits," Lacob added. "I’m not going to say what they are, but there are limits to what you can do.”
Teams don't know how the luxury-tax system will change in the new CBA (if at all) and when those changes will be implemented (whether in 2023-24, 2024-25 or later). That uncertainty might make it less palatable to acquire players on long-term contracts at the trade deadline, such at Atlanta Hawks big man John Collins (signed through 2025-26).
That isn't the only CBA-related complication teams must consider at the trade deadline, though. The league's current extension rules could also factor into whether to acquire a player who's signed only through the 2023-24 season.
Under the current rules, teams can offer a starting salary of no more than 120 percent of a player's previous salary or 120 percent of the estimated average salary on an extension, whichever is greater. When those players become free agents, they're eligible to sign a contract with a starting salary between 25 and 35 percent of the salary cap, depending on how many years of NBA experience they have.
Toronto Raptors forward O.G. Anunoby, who has been floating around the trade rumor mill in recent weeks, is emblematic of this dilemma. Since he's set to earn $18.6 million next season, the Raptors—or whichever team acquires him via trade—can offer him a starting salary no higher than roughly $22.4 million in an extension. His four-year extension offer tops out at around $100.2 million.
If Anunoby becomes a free agent in July 2024 by declining his $19.9 million player option for the 2024-25 season, he may be eligible for a starting salary north of $40 million on a new contract. Even if no team is willing to offer him a max contract in free agency, he could be passing up tens of millions of dollars by signing an extension under the current rules.
There's no guarantee that the new CBA will have these same extension rules in place, though. Perhaps the two sides will agree to allow teams to offer a higher percentage of a player's previous salary or offer what they can receive as a free agent. In either scenario, teams like the Raptors (with Anunoby), Boston Celtics (with Jaylen Brown) and Philadelphia 76ers (with De'Anthony Melton) could be in a far better position to sign their respective players to extensions before they ever hit the free-agent market.
Had the NBA and NBPA reached an agreement on a new CBA prior to the trade deadline, teams would have known whether the current extension rules would remain in place. Instead, the Raptors have to weigh whether to trade Anunoby without knowing how the new CBA might impact their ability to sign him to an extension this offseason. Teams interested in acquiring him face the same issue, too.
Every team is dealing with these same issues, so none of them have a leg up on one another. Some front offices may be willing to throw caution to the wind and deal with the ramifications later, while others might prefer to wait for the league's full long-term financial picture before going all-in.
How teams navigate these dynamics over the next few days will be one of the more interesting subplots of this year's trade deadline.
Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac or RealGM. All odds via FanDuel Sportsbook.
