North American basketball’s NBA and its player’s union the NBPA have announced the official ratification of their new seven-year collective bargaining agreement (CBA), which will start with the 2023-24 season.

The new CBA will take effect on July 1 and is due to run through the 2029-30 season but includes a mutual opt-out clause after the sixth year.

Among the significant inclusions is the long-discussed in-season tournament – similar to European soccer competitions like England’s FA Cup or Spain’s Copa del Rey. The new tournament will begin next season as an eight-team, single-elimination event, with the winning team to receive $500,000 per player in prize money.

A minimum game requirement has been included for major end-of-season awards, with players having to appear in at least 65 games to be eligible for individual awards such as Most Valuable Player.

Another major element of the agreement is a new secondary luxury tax level that aims to curb the ability of the highest-spending teams, like the Golden State Warriors and the LA Clippers, to continue running up enormous luxury tax bills that sometimes exceed their total player salary payrolls.

The league and some teams were pushing for a hard salary cap, which would have given a ceiling on how much teams could spend to help balance the playing field. However, the second luxury tax compromise will see teams lose several key team-building mechanisms if they run $17.5 million over the tax line, including the taxpayer mid-level exception, utilizing cash in trades, and signing free agent players in the buyout market.

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The deal also includes an increase to the upper limits on veteran players’ contract extensions from the current 120% to 140%.

Additionally, the CBA officially removes marijuana from the anti-drug testing program and allows players to invest in both NBA and Women’s National Basketball Association teams, as well as promote and invest in sports betting and cannabis companies.

Other noteworthy features include the creation of two-way contracts for the NBA Development League. There will also be a healthcare program for former players, better benefits for current players, and a shorter preseason.

The ratification comes weeks after the two sides struck an in-principal agreement for the new CBA earlier this month (April 1), just hours ahead of a deadline that would have allowed either side to opt out of the current agreement.

Negotiations over the deal lasted for more than a year. The process saw the pair agree to delay the deadline to opt out of the current CBA twice from December 2022 to February 2023 and then to midnight (ET) on April 1 to reach a new agreement.

Had either party chosen to opt out of the CBA, it would have ended on June 30, and if the two sides had not been able to agree on a new deal by the April deadline, the risk of a labor stoppage would have increased significantly.

The last NBA lockout was in 2011 and resulted in the 2011-12 season being reduced to 66 games.

Meanwhile, ESPN, the international sports broadcaster and domestic rightsholder of NBA rights, has announced its coverage of weeknight NBA Finals games will be aired at 8:30PM (ET) – half an hour earlier than the traditional 9PM start.

Finals games scheduled on Sunday will continue to be aired in its traditional 8PM slot.

The move marks the first time since 2003 that the league has moved up the start time of the Finals games as it looks to increase viewership.

NBA games are shown on Disney’s pay-television broadcaster ESPN and free-to-air channel ABC networks, as well as on Warner Bros. Discovery-owned TNT under an existing tie-up running until the end of the 2024-25 season worth $24 billion.

Image: Jamie Schwaberow/Getty Images