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NBA Players Seeking Franchise Equity Stakes

N
ational Basketball Players Association (NBPA) executive director, Michele Roberts, has said NBA players are considering a push to abolish an NBA rule prohibiting them from owning equity stakes in NBA teams.

The rule will reportedly be opened for discussion during the next round of negotiations for the NBA’s collective bargaining agreement (CBA), which is due to run until the end of the 2023/23 NBA season.

NBA players have reportedly watched the value of NBA teams soar in recent years and could look to NBA team ownership stakes to increase their own earning potential with the NBA unlikely to increase the league’s salary cap of USD$109 million (AUD$140 million) due to the financial losses caused by the COVID-19 pandemic.

Roberts told a recent SporticoLive event the players hope to see the rules relaxed, so long as it doesn’t diminish the franchises’ values going forward.

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

“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…

“If [private equity investments] happens, 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?” she said.

This news comes as the NBA considers further relaxations on team ownership rules, allowing a larger number of private equity investment companies to purchase minority stakes in a number of different teams.

Sports Business Journal (SBJ) reported Dyal Capital Partners last year was allowed to take passive stakes across a number of teams, while being in the process of raising as much as USD$1 billion to purchase stakes in a number of teams.

Under the current CBA, NBA players receive around 50% of the league’s revenue, with reports the NBPA could push for a structure similar to employee stock options, to which Roberts said: “There’s a way, in other words, for players to enjoy equity in these teams that may be non-traditional.”

“It may be a little different from the way we do it on the private side, but I still think there’s an opportunity for us to talk about, think about, and ultimately resolve what I believe to be an inequity in the system,” Roberts said.