The Long Read: With business thriving, the NBA is a picture of unity

The National Basketball Association (NBA) is revelling in an unprecedented bounty, buoyed by surging popularity, a colossal new TV rights deal and, now, the prospect of continued labour peace.

The Long Read: With business thriving, the NBA is a picture of unity

“In terms of the game, it’s never been better.” 

That was how commissioner Adam Silver described the state of the game in the National Basketball Association (NBA) shortly before June’s record-breaking finals, and it is fair to say few argued with his assertion.

Even in a league that has become synonymous with fortune and fame, a league that exudes confidence and oozes swagger at every turn, rarely has life looked quite this good. Whichever way you look at it - and there are, of course, many ways to look at it - the NBA business is booming.

A month into the new season and overall revenues are up well above US$5 billion, underpinned by a colossal new national TV rights deal worth some US$24 billion over the next nine years. Last year - a year which culminated in the Cleveland Cavaliers’ first-ever championship and the highest-rated finals series in history - the league broke its all-time attendance record. Nearly 22 million fans piled into arenas throughout the regular season, helping the league to rack up a record 723 sell-outs and a never-before-seen per-game attendance of 17,864.

But those stats tell only part of the story. According to league figures, TV viewership has risen 19 per cent in the past year and subscriptions to NBA League Pass, the league’s over-the-top (OTT) streaming service, are on a similarly upward trajectory, as are visits to its official website and social platforms. Franchise valuations, perhaps the best indicator of a league’s present and perceived profitability, are at record highs, too. Forbes estimates the average NBA franchise to be worth US$1.25 billion, up 13 per cent on 2015, while player salaries have not only shot through the roof this year, but sailed off into the stratosphere.

This season’s salary cap stands at a record US$94.15 million, a US$24.15 million year-on-year jump that represents the league’s biggest-ever single-season increase. (To put that leap into perspective, the league’s wage ceiling had never previously risen by more than US$8 million in a single summer.) Buoyed by their newfound spending power, teams collectively agreed to shell out more than US$2 billion on player contracts in less than 48 hours after free agency opened at the start of July. The result: role players and the league’s rank and file - players like the nuisance back-up guard Matthew Dellavedova and his fellow former Cav, Timofey Mozgov - found themselves the recipients of eye-watering offers. And at the upper end of the spectrum, there was the usual round of mega-deals.

When Dwyane Wade, a three-time NBA champion and 12-time All-Star, swapped Miami for his hometown of Chicago in July, he did so armed with a new contract worth US$47 million over two years. When Kevin Durant, the 2014 MVP and this year’s most high-profile free agent, left Oklahoma for the Golden State Warriors the same month, he arrived in California having been promised more than US$54 million over the same period. And then there was LeBron James, for years the league’s most consistent performer who, fresh off helping deliver the Cavs’ maiden title, put pen to paper on an agreement worth US$100 million over three years, a deal that will make him the highest-paid player in the NBA’s 70-year history.

Such an unprecedented bounty is clear evidence of the NBA’s current profile and popularity, and much of the credit must go to its top executive. Since taking the helm in February 2014, Silver has guided the league through a period of sustained commercial growth whilst cementing its reputation as a forward-thinking entity. Long regarded as a master negotiator - recent sponsorship contracts that include huge revenue increases with the likes of PepsiCo, Tissot, Verizon and Nike are testament to that - he has also proved himself to be a progressive and personable commissioner.

NBA commissioner Adam Silver.

At a time when troubling divisions are plainly apparent across US society, Silver’s open and articulate manner has helped instil an air of unity and understanding in a league that hasn’t always seen eye-to-eye. His firm handling of the Donald Sterling racism scandal in 2014 earned him support and widespread praise in the early days of his commissionership, and he has since shown he is not shy of tackling similarly sensitive issues head-on. This June, for example, he oversaw the relocation of next year’s All-Star Game from Charlotte to New Orleans, tactfully negotiating the move after attempting to lobby local businesses and government officials into initiating a rethink of North Carolina’s controversial HB2 bill.

Yet the strongest validation of Silver’s steady leadership could lie in what is about to come. Adding to the prevailing sense of harmony, the league and its players’ union, the NBPA, are said to be on the verge of concluding a new collective bargaining agreement (CBA). Those involved in the ongoing discussions - talks led by Silver and NBPA executive director Michele Roberts, both of whom are presiding over their first CBA negotiations in their current roles - are optimistic a new deal will be finalised before an opt-out clause kicks in on 15th December. 

Should that happen, any fears that the new TV deal with Disney and Turner could spell doom for the league’s labour peace would appear misplaced. Indeed, while more than a few doomsayers predicted the influx of riches would lead to an all-out cash-grab and, potentially, a repeat of the damaging work stoppage of 2011, it is to both sides’ credit that the opposite is true. Both the league and the union, fully aware that the NBA business is in a healthier position than it ever has been, agree that to disrupt things now would be counterproductive, if not entirely foolish.

"I think the fortunes of the league, the fact that there is more money to distribute among our players and teams, has created an atmosphere that makes it more conducive to continue a deal that looks a lot like the current deal," said Silver, who has credited the involvement of Michael Jordan, the NBA legend and widely respected owner of the Charlotte Hornets, as a key factor in smoothing discussions this time round. ”I think there is a sense across the table that we have a system that we both fought hard for in the last round of collective bargaining that for the most part is working pretty well.”

Yahoo! Sports reports that the new CBA will start next season and run for seven years, with no opt-out clause until 2022. Details of any changes in the revised agreement will not be made public until a deal is ultimately ratified, but sources with knowledge of discussions have suggested it will likely include a pay hike for rookies and veterans, as well as two-way contracts between the NBA and its farm system, the D-League, a shorter pre-season and new drug-testing procedures.

Like Silver, NBPA executive director Michele Roberts is presiding over her first CBA negotiations.

Perhaps most importantly, though, both sides are said to have agreed some time ago to maintain the existing split of Basketball Related Income (BRI), traditionally the fiercest battleground in CBA negotiations. Sources with knowledge of discussions say players will continue to receive between 49 and 51 per cent of revenues, with the rest going to the team owners. It is understood, however, that the definition of BRI has been broadened out to include previously omitted revenue streams such as sales of luxury suite packages that cover NBA game nights.

"We've made tremendous progress," Silver said at the end of last month’s Board of Governors meetings in New York. "Hopefully we will be back to all of you in the not-too-distant future to say that negotiations have been completed.”

There remain, however, a few rumblings of discontent. Chief among them concerns the impact the injection of new TV money is having specifically on competitive balance in the league. The past two seasons have effectively been a two-horse race between the Cavs and the Warriors, so when the latter was able to add a top player like Durant to their roster on a maximum contract, creating a so-called ‘super-team’ in the process, persistent fears the best talent could end up clustering at the best teams or in the largest markets were only exacerbated. 

Silver himself has acknowledged that a skewed talent base would not be ideal for the league. He says he wants to create a system built on parity, one in which every team has an equal opportunity to win a championship, regardless of market size. That desire is likely to have featured high on the league’s agenda during CBA negotiations this time round, particularly with the salary cap projected to rise again to as much as US$102 million next summer.

Still, there is no denying such a headache is a welcome one for any major league commissioner. With more money pouring into the system and the league enjoying unprecedented popularity at home and overseas, the NBA’s current zenith only looks set to continue.

Michael Long (@_MichaelLong) is SportsPro's Americas editor.