The Current Generation of NBA Players are Keeping it, Rather than Paying it Forward
Team owners have convinced current NBA players to take all they can from their former selves
The NBA is governed by a collective bargaining agreement between the owners of NBA teams and the NBA player’s union, which is called the National Basketball Player’s Association, or NBPA. The NBA engages in numerous anticompetitive business practices, including revenue sharing, player drafts, luxury taxes, and restrictions on team relocations. America’s antitrust laws — notably the Curt Flood Act of 1998 — permit (indirectly) these anticompetitive practices only if the league’s players are in on the hustle1. The NBA, along with the NFL and MLB, need to enter into an agreement with the players in order to operate.
Each league has a player’s union and the union collectively bargains with the league owners to come up with an agreement that spans several years. These agreements dictate compensation levels, roster sizes, revenue sharing, etc. It is through these agreements that the NBA decides to what degree it engages in player development. The NBA’s 2017 collective bargaining agreement created the G-League. The G League is the NBA’s minor league, with each NBA franchise now operating a team. For the most part, the players in this league are low paid aspiring players, with standard contracts paying around $50,000 per year. However, NBA teams can have up to three players on “two-way contracts”, that allow players to play in both the NBA and G League. In addition, players on an NBA roster with less than three years of experience can be “assigned” to the G League as well. LeBron James’s son Bronny refused to sign a two-way contract with the Los Angeles Lakers; he instead occupied an NBA roster spot and played in the G League during the 2024/25 season as an assigned player.
The G League is a very small step in the right direction in regards to player development: it allows thousands of fans to watch professional basketball and it allows players not yet ready for the NBA to play professionally. The NBA should do more for at least three reasons.
First, minor league basketball is an inferior product to second tier league basketball. The primary objective of a minor league basketball player is to impress the NBA team. The goal is for an individual player to become an NBA player. Team success is largely irrelevant. If you asked every G League player if they would rather win the G League or be on an NBA team, every player would answer the latter. The NBA, therefore, has a system of individual promotion and relegation. If the NBA had a system of team promotion and relegation, in which the team that won the G League championship was promoted to the NBA, and the team that finished last in the NBA was relegated to the G League, incentives would change. Team success would align with individual success, i.e., a team being promoted means every player on the team is promoted. Fans want many things from professional sports, but table stakes is competition: fans want the players they are watching to be competing to win. Competition is the essence of sport and something minor leagues get wrong.
Second, the G League is unlikely to improve the quality of NBA play in the long run because the two-way players that compete in both the NBA and G League, i.e., the players that the NBA is trying to develop, do not begin their training until they are 19 years old. This minimum age requirement is an outcome of the collective bargaining agreement. Waiting until players are 19 to begin training them is a terrible and unusual way to develop professional athletes. Roger Federer, regarded by many as the greatest tennis player of all time, was recognized as elite in his early teens and began receiving high quality, consistent training from the Swiss National program by age 14. Lionel Messi, regarded by many as the greatest soccer player of all time, moved from his home country of Argentina to be trained by FC Barcelona at the age of 14. Excellent European youth basketball players, including Luka Dončić, begin professional training as teenagers. Waiting for players to turn 19 before beginning to train them as professionals reduces the quality of NBA play.
The third and final reason the G League is an insufficient step is what happens to talented basketball players between the ages of 12 or so, when their talent or likely adult height or both begins to reveal itself, and 19, when the NBA takes an interest in their development. These players must navigate a world that is constantly seeking to exploit their talents, often with little regard for their well being. Current NBA players are aware of this because nearly all of them lived the experience. And they all know talented peers that did not make it to the NBA because they were not able to navigate these challenges successfully. Teenagers who happen to be tall or awesome at basketball should not have to spend their youth knowing that nearly every single person they interact with is trying to figure out a way to hustle them.
Current NBA players are fabulously wealthy. While previous generations of players advocated for change, they were far less able to take the risk of not getting paid for a season than current players. Never have NBA players had more leverage. They are the reason one of the world’s most popular sports league is popular. The highest paid players make over $50 million per season. The collective bargaining agreement is the time in which NBA players, acting through their union, get to decide how the largesse the NBA generates is distributed. These are the decisions the current players make:
Give money to the owners, who receive about half of operating profits, all expansion franchise fees, and all equity gains when franchises are sold.
Give even more money to the owners by not demanding expansion, which results in scarcity, which results in inflated team valuations, which exclusively benefits owners.
Give money to less talented NBA players via minimum salaries. Current NBA minimum salaries, which are at least $1 million and increase with years of service, are far higher than market value (i.e., billions — literally billions — of people would play professional basketball for $100,000 per year).
Take money from the best recently drafted players via maximum salaries.
Take money from the very best players via maximum salaries.
Take money from non-NBA players younger than 19 via an age restriction and requirement to enter the league via the draft, as well as maximum roster sizes.
It is this last decision that the NBPA should seek to change via collective bargaining. The point of a union is to advocate for the rights of labor. Labor, in the case of the NBA, should not be restricted to current NBA players. The lowest salary an NBA player can receive is $1,000,000 per season. The NBPA has done a great job making sure current NBA players are taken care of. It’s now time to do something for the players not yet in the NBA, including those that never make it.
The good news for the NBA is that developing NBA players is, relative to nearly every other sport, cheap and easy. Most NBA players are unusually tall and most teenagers who will become NBA players are unusually tall. Finding future Premier League soccer players is like finding a needle in a haystack; finding future NBA players is like finding a needle in a sewing store.
What if the NBPA advocated for the following:
Each NBA team creates one under 18 team, one under 16 team, and one under 14 team — call them “junior” teams.
All of the junior teams could be co-located in a single city or a cluster of cities (a la spring training in Arizona), to minimize travel and allow all the players to attend school together.
The collective bargaining agreement could dictate the minimum and maximum salary for the players on the team. For illustrative purposes, let’s set the maximum salary for each junior team player at $100,000 annually.
With roster sizes of 15 per team, this results in maximum annual salary costs of 30 franchises times 3 teams per franchise times 15 players per team times $100,000 per player, which is $135 million.
Let’s assume there’s an additional annual cost of, to be conservative, $270 million, to pay for lodging (including for family members), food, facilities, education, coaches, scouting, medical care, etc.
The total cost under this arrangement is about $305 million annually. The NBA is collectively expected to generate over $12 billion in revenue for the 2024-25 season. This amount of investment in future NBA talent represents about 3 percent of total revenues. This seems a small price to pay for ensuring the quality of NBA play is much, much higher for years to come.
A problem with this type of concerted player development effort is that it would likely be too successful. It would generate a surplus of NBA-ready players and once players reached the age of 18, many would have nowhere to play. A logical solution to this problem is to create a second tier NBA league via expansion, with a system of promotion and relegation. So many would win from this arrangement: smaller cities across the country would gain access to professional basketball; residents of larger cities could attend a professional basketball game without spending hundreds of dollars; talented American players could play in America, rather than abroad; the NBA would have additional live events to sell broadcasters, which benefits team owners and players; young players would have an alternative that did not involve pretending to be a college student. The losers would be few: highly paid NCAA coaches, highly paid high school coaches, as well as fans and owners of current NBA teams that are likely, over time, to be relegated (i.e., those in small markets and those with incompetent ownership). There’s nothing the NBA can or should do about highly paid NCAA and high school coaches: these coaches should not be highly paid and only are now because of the NBA’s decision not to develop players. The downside risk to select, current NBA franchises owners is the challenge, but one that can be easily overcome. Consider the following options:
Give owners equity in the new teams. The downside risk of massive expansion to existing NBA owners is that their teams could be relegated to the second tier, where revenues and valuations would be much lower. By giving existing owners equity in new teams, this downside risk can be eliminated. Owners of teams in small markets could receive a larger share of equity than owners of teams in larger markets, as these teams have a larger downside risk.
Set a price floor. The NBA could guarantee each owner a minimum purchase price for their team, say one that expires in 10 years or diminishes in value year-over-year. For example, Clay Bennett purchased the Seattle Supersonics in 2006 for $350 million. He moved the team to Oklahoma City in 2008. The Oklahoma City Thunder are now worth about $3.5 billion (side note: Mr. Bennett likely cost himself $2 billion or more by moving the team from Seattle to Oklahoma City). The NBA could guarantee Bennett a minimum purchase price of $2 billion and all parties would win: Mr. Bennett would be up over $1.5 billion on his investment and the NBA could sell the franchise rights if Bennett wanted to cash out. While massive expansion would reduce the value of individual franchises, it would increase revenue to the league as a whole, giving the NBA flexibility to recoup the cost of buying teams out via price floors.
NBA owners will object to these reforms, even though doing so has far more upside potential than the status quo. The most likely pathway to reform is a recognition by current players that they should pay their success forward by making sure young players are not only properly trained, but also compensated. They should think of all their friends who never made it to the NBA — due to injury, personal problems, or just bad luck. Would getting paid $100,000 per year from the ages of 14 through 18 have helped? Would being trained by professional coaches during these years have helped? What about receiving best-in-class education, nutrition, and medical care? Or having a reliable, safe place to live with your family for those without that opiton? It’s unlikely to hurt and worth the chance.
The NBA and the best NBA players are now unfathomably wealthy. We must ask them: why not do more to help younger players, to help your former selves, rather than keep yet another million for your present self?
Mechanically, the act makes it clear that current players have standing to sue. By collectively bargaining, the players are agreeing that the provisions are, in their view, are just.