Article 39 TERM OF AGREEMENT
39.1 Effective Date and Expiration Date.
This Agreement shall be effective from July 1, 2023 (except with respect to provisions that the parties have specifically agreed herein will commence earlier) and, unless terminated pursuant to the provisions of this Article XXXIX, shall continue in full force and effect through June 30, 2030 (except with respect to provisions that the parties have specifically agreed herein will survive expiration or termination).
39.2 Mutual Options to Terminate Following Sixth Season.
The NBA and the Players Association shall each have the option to terminate this Agreement on June 30, 2029 by serving written notice of its exercise of such option on the other party on or before October 15, 2028.
39.3 Termination by Players Association/Anti-Collusion.
- In the event the conditions of Article XIV, Section 15 are satisfied, the Players Association shall have the right to terminate this Agreement by serving written notice of its exercise of such right within thirty (30) days after the System Arbitrator’s report finding the requisite conditions (pursuant to Article XIV, Section 15) becomes final and any appeals therefrom have been exhausted or, in the absence of a System Arbitrator, by serving such written notice upon the NBA within thirty (30) days after any decision by a court finding the requisite conditions (pursuant to Article XIV, Section 15). In the latter situation, if the finding of the court is reversed on appeal, the Agreement shall be immediately reinstated and both parties reserve their rights with respect to any conduct by the other party during the period from the date of service of the termination notice to the date upon which the Agreement was reinstated.
- If the Players Association exercises the right accorded it by Section 3(a) above, this Agreement shall terminate as of the June 30 immediately following the service of the termination notice.
39.4 Termination by NBA/National TV Revenues.
- For the purposes of this provision: (i) “National TV Revenues” shall mean the rights fees or other non-contingent payments stated in the NBA’s third-party national broadcast network (e.g., ABC) and cable network (e.g., TNT or ESPN) television agreements (each, a “National TV Agreement”); and (ii) “Other Media Income” shall mean the aggregate net income earned by any League-related entity (as defined in Article VII, Section 1(a)(1)) (but excluding net income attributable to ownership interests in any such League-related entity that is not owned by the NBA, NBA Properties, Inc., NBA Media Ventures, LLC, and/or a group of NBA Teams) or by the NBA on behalf of the Teams from agreements that provide for the transmission of live (or delayed) NBA games, on a domestic or international basis, by means of television, radio, internet, and any other mode of delivery referenced in Article VII, Section 1(a)(1)(ii), net of reasonable and customary expenses related thereto.
- If, during the term of this Agreement, (i) the sum of the average annual National TV Revenues provided for under the Successor Agreements (as defined in Article VII, Section 1(c)(2)), plus one hundred four and one-half percent (104.5%) of Other Media Income for the most recent Salary Cap Year, will be at least thirty-five percent (35%) less than (ii) the sum of the average annual National TV Revenues provided for under the NBA/ABC and NBA/TBS Agreements, plus Other Media Income for the 2022-23 Salary Cap Year, the NBA shall have the right to terminate this Agreement effective as of the June 30 immediately preceding the first Season covered by the Successor Agreements, by providing written notice of such termination to the Players Association at least sixty (60) days prior to such June 30. During the period following delivery of such written notice of termination and through such June 30, the NBA and the Players Association shall engage in good faith negotiations for the purpose of entering into a successor agreement and the provisions of Article XXX shall remain in full force and effect.
39.5 Termination by NBA/Force Majeure.
- “Force Majeure Event” shall mean the occurrence of any of the following events or conditions, provided that such event or condition either (i) makes it impossible for the NBA to perform its obligations under this Agreement, or (ii) frustrates the underlying purpose of this Agreement, or (iii) makes it economically impracticable for the NBA to perform its obligations under this Agreement: wars or war-like action (whether actual or threatened and whether conventional or other, including, but not limited to, chemical or biological wars or war-like action); sabotage, terrorism, or threats of sabotage or terrorism; explosions; epidemics; weather or natural disasters, including, but not limited to, fires, floods, droughts, hurricanes, tornados, storms, or earthquakes; and any governmental order or action (civil or military); provided, however, that none of the foregoing enumerated events or conditions is within the reasonable control of the NBA or an NBA Team.
- In addition to any other rights a Team or the NBA may have by contract or by law, if a Force Majeure Event occurs and, as a result, one or more Teams are unable to play one or more games (whether Exhibition, Regular Season, Play-In, or playoff games), then, for each missed game during such period (the “Force Majeure Period”) that was not rescheduled and replayed, the Compensation payable to each player who was on the roster of a Team that was unable to play one or more games during the Force Majeure Period shall be reduced by 1/92.6th of the player’s Compensation for the Season(s) covering the Force Majeure Period. For purposes of the foregoing calculation, and notwithstanding the actual number of games that any Team played, was scheduled to play, or could have played during the Seasons(s) affected by the Force Majeure Event, each Team shall be deemed to play five (5) Exhibition games, eighty-two (82) Regular Season games, and 5.6 playoff games during each such Season.
- In the event that Section 5(b) above applies, the applicable Compensation reduction from each player shall be withheld by the player’s Team from the first Compensation payment (or payments, if the first such payment is insufficient to satisfy the reduction) that is (or are) due or to become due to such player following the commencement of the Force Majeure Period (whether under the Player Contract that was in existence at the commencement of the Force Majeure Period or any subsequent Player Contract between the player and the Team). If such Compensation payment (or payments) is (or are) insufficient to cover the Compensation reduction required by Section 5(b) above, then either (i) the player shall promptly pay the difference directly to the Team (“old Team”), or (ii) if he subsequently enters into a Player Contract with, or is traded to, another NBA Team (“new Team”), such difference shall be withheld from the first available Compensation payment (or payments, if the first such payment is insufficient to satisfy the remaining reduction) that is (or are) due to the player from the new Team and shall be remitted by the new Team to the old Team.
- Upon the occurrence of a Force Majeure Event satisfying the terms of Section 5(a) above, the NBA shall have the right to terminate this Agreement as of the sixtieth (60th) day following delivery to the Players Association of a written notice of termination, which must be delivered to the Players Association within sixty (60) days of the Force Majeure Event. During the sixty-day period following delivery of such written notice of termination, the NBA and the Players Association shall engage in good faith negotiations for the purpose of entering into a successor agreement, and during such period the provisions of Article XXX shall remain in full force and effect.
39.6 Mutual Right of Termination.
If at any time during the term of this Agreement any provision contained in Article VII, X, XI, or XIV of this Agreement is enjoined, vacated, declared null and void, or is rendered unenforceable by any court of competent jurisdiction, then the NBA and the Players Association shall each have the right to terminate this Agreement by serving upon the other party written notice of termination at least sixty (60) days prior to the effective date of such termination.
39.7 Mutual Right of Termination – League Financial Results.
If, as determined by the Governing Audit Report for a Salary Cap Year (the “Trigger Salary Cap Year”):
- The sum of (i) Team Content Expenses, (ii) League Content Expenses, and (iii) any amortized amount of prior year expenses deductible pursuant to Article VII, Section 1(a)(6)(vi) above, deducted from BRI for the Trigger Salary Cap Year exceeds twenty-five percent (25%) of the sum of Team Content Revenues and League Content Revenues; or
- BRI for the Trigger Salary Cap Year is less than ninety-five percent (95%) of the highest BRI amount for any prior Salary Cap Year;
then (i) the NBA and Players Association shall negotiate in good faith to agree upon adjustments to the provisions of this Agreement to take effect beginning with the Salary Cap Year immediately following the Trigger Salary Cap Year, and (ii) if the parties are unable to agree to adjustments to this Agreement in accordance with the foregoing, then the NBA and Players Association will each have the option to terminate this Agreement effective as of the June 30 of the Salary Cap Year immediately following the Trigger Salary Cap Year, by serving written notice of its exercise of such option on the other party on or before the date that is sixty (60) days following the issuance of the Governing Audit Report for the Trigger Salary Cap Year. During the period following delivery of such written notice of termination through the last day of the Salary Cap Year immediately following the Trigger Salary Cap Year, the NBA and the Players Association shall engage in good faith negotiations for the purpose of entering into a successor agreement and during such period the provisions of Article XXX shall remain in full force and effect.
39.9 Mutual Right of Termination – League Entity Transaction.
In the event a sale or transfer of ownership interests in a League-related entity that, prior to such sale or transfer, generated $50 million or more of annual revenues included in BRI results in such entity ceasing to be a League-related entity, including in circumstances where a League-related entity continues to hold a non-controlling minority ownership interest in such entity following such sale or transfer, the parties shall negotiate in good faith such modifications to the CBA as may be appropriate, to take effect beginning with the Salary Cap Year in which such sale or transfer occurs and taking into account all relevant facts and circumstances including the amounts included in BRI prior to such sale or transfer, to ensure a fair inclusion of amounts in BRI following such sale or transfer. In the event the parties are unable to reach an agreement on CBA modifications within thirty (30) days of such a sale or transfer, either party may thereafter for a period of thirty (30) days elect to terminate the CBA, by written notice to the other party, effective as of the June 30 immediately following the service of the termination notice (or, if later, as of the first June 30 that is at least sixty (60) days following the service of the termination notice). Should either party terminate the CBA in accordance with the foregoing effective as of any June 30, then:
- For the Salary Cap Year encompassing such June 30:
- BRI shall be calculated in accordance with the provisions of this Agreement, except as set forth in subsection (a)(ii) below;
- the treatment of BRI relating to such sale or transfer shall be determined by agreement of the parties in a successor Collective Bargaining Agreement; and
- the completion of the Audit Report, and the performance of the calculations and reconciliation processes described in Article VII, Sections 12(d)-(g) (including, for clarity, the distribution of any Overage Amount or Shortfall Amount) shall be deferred pending the completion of an agreement by the parties on a successor Collective Bargaining Agreement, which shall specify the time period for completing such Audit Report, calculations, and reconciliation processes in accordance with the provisions of subsections (a)(i) and (a)(ii) above; and
- For the Salary Cap Year immediately following such June 30, each of the Salary Cap, Minimum Team Salary, Tax Level, First Apron Level, and Second Apron Level shall increase to an amount that is equal to one hundred five percent (105%) of its amount for the Salary Cap Year encompassing such June 30, subject to any modification of the foregoing on which the parties agree in a successor Collective Bargaining Agreement.
39.10 No Obligation to Terminate; No Waiver.
The grant to either party of a right or option to terminate pursuant to the provisions of this Article XXXIX shall not carry with it the obligation to exercise that right or option; and the failure of the NBA or the Players Association to exercise any right or option to terminate this Agreement with respect to any playing Season in accordance with this Article XXXIX shall not be deemed a waiver of or in any way impair or prejudice the NBA or the Players Association’s right or option, if any, to terminate this Agreement in accordance with this Article XXXIX with respect to any succeeding Season.