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NBA players to push for equity stakes in league franchises

National Basketball Association (NBA) players may look to overturn a rule that inhibits them from owning equity stakes in league franchises, according to the league union's executive director.

NBA players to push for equity stakes in league franchises

Michele Roberts, who heads the National Basketball Players Association (NBPA), confirmed the news during the SporticoLive event recently, where she claimed players were considering the option of overturning the rule during negotiations for their next collective bargaining agreement (CBA) with the league's owners.

Under the current CBA, signed in 2016 and set to run until the end of the 2023/24 season, players receive roughly 50 per cent of league revenue. Revenue growth in recent years has benefited players, however, the NBA's salary cap, which sits at $109.1 million, has not risen in line with the inflation of franchise valuations.

“We’ve got a collective bargaining agreement that says we can’t [own stakes], and hopefully down the road we’ll make some changes,” explained Roberts.

“The players will be the last to suggest that we want to see the game’s value, or teams’ values, in any way diminish, but it sure would be nice to be able to go to the party.”

Reports have detailed that the NBA is considering relaxing team ownership rules to allow for potential private equity investment funds to buy into franchises in the league. Last year, Dyal Capital Partners took pass stakes across multiple franchises and Arctos Sports Partners is also exploring a route into purchasing stakes in NBA teams.

The reason for relaxing ownership rules in the league comes after concerns that valuations are pricing-out potential buyers, after it was revealed that the average franchise is now worth $2.4 billion.

“If [private equity investment] happens,” added Roberts, “I will have players complain bitterly that, ‘Wow, we helped create this wealth, we helped create this value, and some private equity guy can come in and I can’t?’"

Author: Jake Wilkin