On April 1, the National Basketball Association and National Basketball Players Association announced that they had reached an agreement on a new collective bargaining agreement. The new deal, which runs through the 2029-30 season, is relatively unremarkable as there do not appear to be any major changes to the league’s operations. Instead, what is remarkable is that the new contract caps a run of successful labor negotiations in sports over the past two years.

In those two years, six contracts have been executed in professional sports:

• The agreement between the United Soccer League and the USL Players Association concerning USL Championship, reached in October 2021.
• The agreement between the National Women’s Soccer League and the NWSL Players Association, reached on February 1, 2022.
• The March 2022 agreement between Major League Baseball and the MLB Players Association.
• The November 2022 agreement between the USL and the USL Players Association concerning League One.
• The recently announced contract between MLB and the MLB Players Association concerning minor league baseball.
• The new NBA agreement.

These agreements follow new agreements executed in the National Hockey League and Major League Soccer in 2020 and 2021, respectively, and agreements in the National Football League and the Women’s National Basketball Association in 2020.

The new agreements

Notably, four of the contracts executed in late 2021 and 2022 are the first ever in those leagues, helping to provide uniformity and stability to the leagues’ operations.

USL. The USL operates two men’s professional soccer leagues. The USL Championship is a Division II league according to the standards of the United States Soccer Federation, just below Major League Soccer, which is the country’s only Division I league.  USL League One is a Division III league, below USL Championship. In common parlance, both the USL Championship and League One are minor leagues, in a sport which is often considered to have second-tier status in the United States. Consequently, the October 2021 and November 2022 contracts are largely focused on core employment matters, such as the terms of the Standard Player Agreement, the length of player contracts (February 1 to November 30), club termination rights (broad), clubs’ rights to transfer players (also broad), a salary cap called a “Benefit Spend” ($1.97M in the Championship and $1.3M in League One for 2023), minimum monthly salaries ($2,250 in the Championship and $2,000 in League One for 2023), workers’ compensation, and grievance procedures. The contracts do not require health insurance or retirement plans, and there is no player draft.

NWSL. The National Women’s Soccer League contract is similarly brief and focuses on core economic items. The contract sets minimum salaries of $36,400 for 2023, establishes free agency for players after five years, and includes the concept of a salary cap but leaves the amount of the cap generally within the discretion of the League. Unlike the USL, the NWSL agreed to provide its players with a variety of benefits, including full salary protection in the event of pregnancy.  The contract was perhaps most remarkable for its level of cooperation with the union, including an agreement to provide confidential league financial information and the creation of a joint council to address and evaluate ongoing league matters. Indeed, Meghann Burke, Executive Director of the Players Association, was a part of the committee that selected Jessica Berman as the new Commissioner of the NWSL.

MiLB. Finally, there is now a collective bargaining agreement in minor league baseball. The quick execution of the agreement is surprising, given that it was only in September 2022 that MLB even recognized the Players Association as the bargaining representative for minor league players.  The deal should provide stability to the players and clubs. After the settlement of a lawsuit in which MLB agreed to pay $185 million to minor leaguers for alleged violations of the Fair Labor Standards Act, the parties agreed to minimum annual salaries ranging from $19,800 in rookie ball to $35,800 in Triple A, a substantial increase from prior minimums. The agreement also improves off-season pay, housing, meals, and travel for players. Finally, control over player name, image, and likeness reverted to the players.

The experienced leagues

The seemingly peaceful negotiation of the minor league baseball agreement was also surprising, given the contentious labor negotiations involving MLB and the major league players in early 2022. The league locked the players out in December 2021, and the start of the 2022 season was delayed until the parties finally reached a deal in March 2022. That lockout is a blemish on this recent run of labor peace but is also notable for preserving the status quo. Despite some thought that the Players Association would seek to change the standards of free agency or salary arbitration for the first time in decades, no such changes were made. Instead, the League agreed to a $50 million performance-based bonus pool to be paid to players who were not yet eligible for arbitration. Moreover, the parties incentivized teams to call up young players in time to earn a full year of service by providing the teams the chance to earn additional draft picks depending on player performance. The draft itself is now also a lottery. But recent rule changes, such as the pitch clock and elimination of defensive shifts, were unilaterally implemented by MLB.

As mentioned above, the new agreement between the NBA and its Players Association is benign. The parties added a second salary cap level over which teams can no longer take advantage of certain roster construction methods, including the mid-level player exception to the salary cap (which permits clubs to pay one player the average NBA salary and not have that salary count toward its salary cap). The limit on salaries in contract extensions was raised from 120 percent of a player’s prior year salary to 140 percent. To address concerns over player rest, players must now play at least 65 games to earn postseason awards, such as Most Valuable Player. Finally, the most interesting change is the possibility of a mid-season tournament. 

Lessons learned

The recent run of labor peace is in stark contrast to the era from the 1970s through mid-2000s, when most contract negotiations in professional football, baseball, basketball, and hockey involved work stoppages and litigation. For better and worse, that litigation largely resolved major legal issues concerning labor relations in sports. Specifically, the significance and scope of the non-statutory labor exemption was clarified, even if its exact end point is still not clear. Additionally, many of the attorneys who fought those battles have since left the scene, including Paul Tagliabue and David Stern on the league side and Don Fehr and Jim Quinn on the players’ side.

Perhaps the biggest driver of labor peace has been the gradual change in ownership. Owners who years ago believed that free agency and out-of-control player salaries would lead to their financial ruin are generally no longer in control of clubs. Newer owners have grown up with the financial realities of labor relations in sports, including players’ rights to free agency and a share of league revenues. Acceptance of these realities has helped the parties in each league to work together to grow their respective pies while avoiding the calamity of missed games.

Next on the docket

The next contract up for negotiation is that between the NHL and its Players Association, which expires after the 2025-26 season. That negotiation pits Gary Bettman, NHL Commissioner since 1992 and League-side attorney before that, against Marty Walsh, the new head of the NHL Players Association, former Secretary of the U.S. Department of Labor, and former Mayor of Boston.  Mr. Bettman has overseen three lockouts that resulted in a considerable loss of games, and may see the coming negotiation as an opportunity to crown his career with wins for the owners. A major issue in those negotiations will be player participation in the Olympics.

Turning to football, the current agreement between the NFL and its Players Association runs through March 2031. The Players Association has reportedly begun its search for a replacement for Executive Director De Smith, who is expected to leave the post he has held since 2009. NFL Commissioner Roger Goodell is reportedly set to sign an extension that will keep him on as Commissioner through the 2027 season, when he will be 68 years old and may retire. As the league with the most litigious labor relations history, the possible introduction of new chief executives on both sides may spell the end of a sustained era of labor peace.