The CBA Glossary

General Prohibition

Collusion is coordinated behaviour between multiple parties to manipulate the market or avoid competition. Teams must make their own decision about signing players, and cannot secretly co-ordinate with other teams to manipulate the player market.

The CBA's general proclusion of collusion (my rhyme, not theirs) effectively states that no team, employees or agents - be it explicitly or implicitly - can conspire and/or contract to gain an unfair competitive or financial advantage during contract negotiations, trades or free agency. This is prohibited both through action (e.g. a team making off-the-books promises such as future ownership shares to convince a player to sign) and/or exclusion (i.e. the opposite, and conspiring not to sign a player, such as through mutual agreements not to offer them a contract in order to keep their market value down). An NBA team or its executives cannot make agreements with another to refuse to negotiate with a player or place any co-ordinate conditions on negotiations, refuse to negotiate with free agents, refuse to both sifn and match offer sheets, nor co-ordinate the salary or contract length of offers to players. ⓘArticle XIV (Anti-Collusion Provisions) Section 1 (No Collusion):

Subject to Section 2 below, no NBA Team, its employees or agents, will enter into any contracts, combinations, or conspiracies, express or implied, with the NBA or any other NBA Team, their employees or agents: (a) to negotiate or not to negotiate with any Veteran or Rookie; (b) to submit or not to submit an Offer Sheet to any Restricted Free Agent; (c) to offer or not to offer a Player Contract to any Free Agent; (d) to exercise or not to exercise a Right of First Refusal; or (e) concerning the terms or conditions of employment offered to any Veteran or Rookie.

What counts as collusion?

It is of course unrealistic to create an entirely exhaustive list of what constitutes collusive behaviour, and it would be counter-productive to try. After all, if only conduct expressly listed counted as collusion, newly discovered ways would not be punishable. So what the CBA does do is explicitly rule some things out as not being collusive behaviour - matters that, on the face of it, could otherwise parse as multiple parties working together to engage in cost control through the denial of a truly free market.

The following is expressly permissible and not deemed to be collusion:

● The NBA and its teams working together to negotiate CBAs with the NBPAArticle XIV (Anti-Collusion Provisions) Section 2 (Non-Collusive Conduct):

The following is a non-exhaustive list of conduct that shall not be deemed a violation of Section 1 above:

(a) the formulation and negotiation of collective bargaining proposals [...]

● Teams can agree to trades that involve either veteran players signing a new or amended contract (such as an extension), or a drafted rookie signing a contract (for example, if a team would only want to trade for a veteran on the condition they would sign an extension upon arrival, it is expressly permitted that all parties to the trade can talk that out in advance)Article XIV (Anti-Collusion Provisions) Section 2 (Non-Collusive Conduct):

The following is a non-exhaustive list of conduct that shall not be deemed a violation of Section 1 above:

[...] (b) agreements between NBA Teams necessary to the assignment of a Player Contract of a Veteran or the assignment of the exclusive negotiating rights to a Draft Rookie, where such assignment is contingent upon (i) the signing by the Veteran of an amendment to an existing Player Contract (including, for example, an Extension), or (ii) the signing by the Draft Rookie of a new Player Contract; provided, however, that if such contingency is fulfilled by the Veteran entering into an amended Player Contract (including, for example, an Extension) or the Draft Rookie entering into a new Player Contract, this subsection shall only apply if the assignment is actually consummated [...]

● Sign-and-trade deals are, of course, not collusionArticle XIV (Anti-Collusion Provisions) Section 2 (Non-Collusive Conduct):

The following is a non-exhaustive list of conduct that shall not be deemed a violation of Section 1 above:

[...] (c) an agreement between NBA Teams concerning the signing of a new Player Contract by a Veteran Free Agent with his Prior Team, where such agreement is necessary for the subsequent assignment of the new Player Contract between the agreeing Teams; provided, however, that this Section 2(c) shall apply only if the subsequent assignment is consummated, and only if the agreement and the new Player Contract comply with the provisions of Article VII, Section 8(e) [...]

● Conduct expressly allowed elsewhere in the NBA Draft rulesArticle XIV (Anti-Collusion Provisions) Section 2 (Non-Collusive Conduct):

The following is a non-exhaustive list of conduct that shall not be deemed a violation of Section 1 above:

[...] (d) conduct authorized by the terms and conditions of the NBA Draft (as set forth in Article X above) [...]

● Anything else expressly permitted by the CBAArticle XIV (Anti-Collusion Provisions) Section 2 (Non-Collusive Conduct):

The following is a non-exhaustive list of conduct that shall not be deemed a violation of Section 1 above:

[...] (e) conduct authorized by any provision of this Agreement or conduct by the NBA League Office, undertaken in good faith, that reflects a reasonable interpretation of this Agreement or a Player Contract [...]

● The NBA can suspend, discipline, or remove players from the league when authorized by the CBA.Article XIV (Anti-Collusion Provisions) Section 2 (Non-Collusive Conduct):

The following is a non-exhaustive list of conduct that shall not be deemed a violation of Section 1 above:

(f) any action taken by the NBA League Office to exclude from the NBA, suspend, or discipline any player for any reason authorized or permitted by any provision of this Agreement (this Section 2(f), however, shall not affect any other rights of any player or the Players Association to contest such action) [...]

● The Commissioner may reject or disapprove player contracts, extensions, renegotiations, or amendments when authorized to do so, without it being deemed collusionArticle XIV (Anti-Collusion Provisions) Section 2 (Non-Collusive Conduct):

As above, it is much less easy to list what might count as collusion. The CBA tries, though, when it prescribes that a team cannot refuse to negotiate with or sign a player simply because of the player's prior contractual history or free agent status. Specifically, teams cannot refuse to deal with a player because:

● another team once owned his draft rights ⓘArticle XIV (Anti-Collusion Provisions) Section 3 (Individual Negotiations):

No NBA Team shall fail or refuse to negotiate with, or enter into a Player Contract with, any player who is free to negotiate and sign a Player Contract with any NBA Team, on any of the following grounds:

(a) that the player has previously been subject to the exclusive negotiating rights obtained by another NBA Team in an NBA Draft [...]

● because he previously refused to sign a contract containing an option clause ⓘArticle XIV (Anti-Collusion Provisions) Section 3 (Individual Negotiations):

No NBA Team shall fail or refuse to negotiate with, or enter into a Player Contract with, any player who is free to negotiate and sign a Player Contract with any NBA Team, on any of the following grounds:

[...] (b) that the player has previously refused or failed to enter into a Player Contract containing an Option [...]

● because a player has reached free agency ⓘArticle XIV (Anti-Collusion Provisions) Section 3 (Individual Negotiations):

No NBA Team shall fail or refuse to negotiate with, or enter into a Player Contract with, any player who is free to negotiate and sign a Player Contract with any NBA Team, on any of the following grounds:

[...] (c) that the player has become a Restricted Free Agent or an Unrestricted Free Agent [...]

● because another team previously had matching rights over him. ⓘArticle XIV (Anti-Collusion Provisions) Section 3 (Individual Negotiations):

No NBA Team shall fail or refuse to negotiate with, or enter into a Player Contract with, any player who is free to negotiate and sign a Player Contract with any NBA Team, on any of the following grounds:

[...] (d) that the player is or has been subject to a Right of First Refusal.[...].

(I don't really know why some of that needed expressly providing for, but the CBA did it anyway.)

Simply showing that a team never contacted a player, made an offer or signed him does not automatically prove a violation. A player would still need evidence that the team avoided him for one of the prohibited reasons listed above. ⓘArticle XIV (Anti-Collusion Provisions) Section 3 (Individual Negotiations):

The fact that a Team has not negotiated with, made any offers to, or entered into any Player Contracts with players who are free to negotiate and sign Player Contracts with any Team, shall not, by itself, be deemed proof that such Team failed or refused to negotiate with, make any offers to, or enter into any Player Contracts with any players on any of the prohibited grounds referred to in this Section 3.

The league office is prohibited from acting as an information-sharing hub during free agency negotiations. Specifically, the league office cannot knowingly tell one team that another team is negotiating with a player; in the case of restricted free agents, negotiations are confidential until an official offer sheet has been delivered to the player's original team. This is to prevent the sharing of information that could influence how teams behave and potentially facilitate collusion. ⓘArticle XIV (Anti-Collusion Provisions) Section 4 (League Disclosures):

The NBA League Office shall not knowingly communicate or disclose, directly or indirectly, to any NBA Team that another NBA Team has negotiated with or is negotiating with any Restricted Free Agent, unless and until an Offer Sheet (as defined in Article XI, Section 5(b)) shall have been given to the ROFR Team (as defined in Article XI, Section 4(a)), or any Free Agent prior to the execution of a Player Contract with that player.

Complaints procedure

A collusion claim can be brought by either an individual player or the Players Association on behalf of the affected player/s, with the case heard by an arbitrator. To win a collusion case, the player or NBPA must show, by a clear preponderance of the evidence, that the teams violated the anti-collusion rule and that the violation caused the player(s) financial harm. If both things are are proven, the arbitrator decides both liability and damages in the same proceeding. The NBPA can also still bring a collusion case even if no actual economic harm can be or was proven. They can still seek a declaration from the arbiter that collusion has occurred, and/or an order to stop it. Economic harm must exist to receive monetary damages, however. ⓘArticle XIV (Anti-Collusion Provisions) Section 5 (Enforcement of Anti-Collusion Provisions):

(a) Any player, or the Players Association acting on behalf of a player or players, may bring an action before the System Arbitrator alleging a violation of Section 1 above. Issues of relief and liability shall be determined in the same proceeding (including the amount of damages, pursuant to Section 9 below, if any). The complaining party will bear the burden of demonstrating by a clear preponderance of the evidence that the challenged conduct was in violation of Section 1 above and caused economic injury to such player(s); provided, however, that the Players Association may, in the absence of economic injury to any player, bring an action before the System Arbitrator claiming a violation of Section 1 above (which must be proved by a clear preponderance of the evidence) and seeking only declaratory relief or a direction to cease and desist from the challenged conduct. (b) The provisions of this Agreement are not intended to create any substantive rights in any party, other than as provided for herein. This Agreement may be enforced, and any alleged violations may be remedied, only as provided for herein.

Simply showing that teams did not make offers and/or that a player remains unsigned is not enough by itself to prove collusion. Even if the player is reasonably widely considered to have NBA talent and still not get any offers, it is still not enough. Collusion =/= unsigned. To prove collusion - which as above is coordinated behaviour between multiple parties to manipulate the market or avoid competition - there must be additional evidence suggesting teams actually coordinated in their behaviour. ⓘArticle XIV (Anti-Collusion Provisions) Section 6 (Satisfaction of Burden of Proof):

The failure by a Team or Teams to submit Offer Sheets to Restricted Free Agents, or to make offers or sign Contracts for the playing services of Free Agents, shall not, by itself or in combination only with evidence about the playing skills of the player(s) not receiving such offers or Contracts, satisfy the burden of proof set forth in Section 5 above. However, such evidence may support a finding of a violation of Section 1 above, but only in combination with other evidence that either by itself or in combination with the evidence referred to in the immediately preceding sentence indicates that the challenged conduct was in violation of Section 1 above and, except in cases where the Players Association seeks only declaratory relief or a direction to cease and desist from the challenged conduct, caused economic injury to such player(s).

Punishment

If a collusion complaint is successful, multiple remedies are available.

Firstly, any player/players found to have been affected ("suffered economic injury") as a result of the collusive behaviour will have the right, within 30 days and after the exhaustion of all appeals, to terminate their contract. The termination will take effect immediately, if during the offseason, or at the end of the current season, if one is ongoing. Their free agency status is unaffected; that is to say, if a player would have been a restricted free agent at the unterminated conclusion of their contract, they still will be one even if they terminate. ⓘArticle XIV (Anti-Collusion Provisions) Section 8 (Remedies for Economic Injury.):

In the event that an individual player or players, or the Players Association acting on his or their behalf, successfully proves a violation of Section 1 above that has caused economic injury, the player or players determined by the System Arbitrator to have suffered economic injury as a result of the violation will have the right:

(a) to terminate his (or their) existing Player Contract(s) at his (or their) option (however, such termination shall not take effect until the conclusion of a then-ongoing NBA Season, if any). Such right of termination shall not arise until the recommendation of the System Arbitrator finding a violation is no longer subject to further appeal and must be exercised by the player within thirty (30) days therefrom. If, at the time the Player Contract is terminated, such player would have been an Unrestricted Free Agent pursuant to the provisions of this Agreement, he shall immediately become an Unrestricted Free Agent upon such termination. If, at the time the Player Contract is terminated, such player would have been a Restricted Free Agent pursuant to the provisions of this Agreement, such player shall immediately become a Restricted Free Agent upon such termination; however, any such player may choose to reinstate his Player Contract at any time up until September 15 of that year [...]

Of course, if the player/players that has/have suffered economic injury were not under a contract as a result of the collusion, the above is of no value. Therefore, damages are also payable. If the player terminates their contract and does not reinstate it, damages stop accruing once the termination takes effect, but if they keep or reinstate the contract, they can recover damages for the entire economic injury period. ⓘArticle XIV (Anti-Collusion Provisions) Section 8 (Remedies for Economic Injury):

In the event that an individual player or players, or the Players Association acting on his or their behalf, successfully proves a violation of Section 1 above that has caused economic injury, the player or players determined by the System Arbitrator to have suffered economic injury as a result of the violation will have the right:

[...] (b) to recover damages as described in Section 9 below. However, if the player terminates his Player Contract under Section 8(a) above and does not reinstate it pursuant thereto, he may not recover damages for the period after such termination takes effect. A player who does not terminate his Contract, or who reinstates it pursuant to Section 8(a) above, may recover damages for the entire period of his injury.

To calculate the damages, the CBA uses punitive multpliers. For a first offense, the damages will be equal to 200% of what the arbtirator deems to be the actual losses, with the colluding teams being jointly responsible for paying it. For a second offense, that rises to 300%. For a third offense upwards, it is 300% plus a $4 million fine per team that has committed at least a third violation. ⓘArticle XIV (Anti-Collusion Provisions) Section 9 (Calulcation of Damages):

Upon any finding of a violation of Section 1 above that has caused economic injury, compensatory damages (i.e., the amount by which any player has been injured as a result of such violation) and non-compensatory damages (i.e., the amount exceeding compensatory damages) shall be awarded as follows:

(a) Two (2) times the amount of compensatory damages, in the event that all of the Teams found to have violated Section 1 above have committed such a violation for the first time. Any Team found to have committed such a violation for the first time shall be jointly and severally liable for two (2) times the amount of compensatory damages.

(b) Three (3) times the amount of compensatory damages, in the event that any of the Teams found to have violated Section 1 above have committed such a violation for the second time during the term of this Agreement. In the event that damages are awarded pursuant to this Section 9(b): (i) any Team found to have committed such a violation for the first time shall be jointly and severally liable for two (2) times the amount of compensatory damages; and (ii) any Team found to have committed such a violation for the second time during the term of this Agreement shall be jointly and severally liable for three (3) times the amount of compensatory damages.

(c) Three (3) times the amount of compensatory damages, plus, for each Team found to have violated Section 1 above for at least the third time during the term of this Agreement, four million dollars ($4,000,000), in the event that any of the Teams found to have violated Section 1 above have committed such violation for at least the third time during the term of this Agreement. In the event that damages are awarded pursuant to this Section 9(c): (i) any Team found to have committed such a violation for the first time shall be jointly and severally liable for two (2) times the amount of compensatory damages; (ii) any Team found to have committed such a violation for at least the second time during the term of this Agreement shall be jointly and severally liable for three (3) times the amount of compensatory damages; and (iii) any Team found to have committed such a violation for at least the third time during the term of this Agreement shall, in addition, pay a fine of four million dollars ($4,000,000) [...]

There is also a clause about how colluding teams are to be held "jointly and severally liable". Because liability is joint and several, the player does not have to collect proportional shares of their owed damage from each team. The player can potentially collect the entire award from whichever liable team can pay, and then the teams sort out reimbursement among themselves later through the contribution process outlined below. ⓘArticle XIV (Anti-Collusion Provisions) Section 9 (Calulcation of Damages):

[...] In the event that damages are awarded pursuant to this Section 9(c): (i) any Team found to have committed such a violation for the first time shall be jointly and severally liable for two (2) times the amount of compensatory damages; (ii) any Team found to have committed such a violation for at least the second time during the term of this Agreement shall be jointly and severally liable for three (3) times the amount of compensatory damages; and (iii) any Team found to have committed such a violation for at least the third time during the term of this Agreement shall, in addition, pay a fine of four million dollars ($4,000,000).

It should be noted that the damages do not all go to the player. Damages are split into two categories - compensatory and non-compensatory - and only the compensatory damages (i.e. making up the exact amount that the player was deemed to have lost due to collusion) goes to the player. Everything above the player's actual loss, the non-compensatory portion, goes to the Players Association. ⓘArticle XIV (Anti-Collusion Provisions) Section 10 (Payment of Damages):

In the event damages are awarded pursuant to Section 9 above, the amount of compensatory damages shall be paid to the injured player or players. The amount of non-compensatory damages, including any fines, shall be paid to the Players Association, which may use it for any purpose other than to pay it to any player who has received compensatory damages, except that any such player may receive some portion of a non-compensatory damage award as part of a proportional distribution to Players Association members.

With regards to the salary cap, the league again distinguishes between compensatory damages and non-compensatory penalties. The compensatory damages paid to the player count against the salary cap (and are also included in BRI calculations), while the punitive, non-compensatory penalties and fines are not. This prevents colluding teams from inflating salary-cap calculations through penalties, should they ever think that was a good idea for some reason. ⓘArticle XIV (Anti-Collusion Provisions) Section 11 (Effect of Damages on Salary Cap):

In the event damages are awarded pursuant to Section 9 above, the amount of non-compensatory damages, including any fines, will not be included in any of the computations described in Article VII above. The amount of compensatory damages awarded will be included in such computations.

As alluded to above, after a collusion judgment, teams can fight among themselves about who should ultimately bear the cost. If five teams were found to have colluded, the CBA holds that the NBA Commissioner decides how responsibility should be allocated. The Commissioner's decision is final, and the teams cannot appeal it, although the Player's Association can if more than four teams are involved. ⓘArticle XIV (Anti-Collusion Provisions) Section 12 (Contribution):

Any Team found liable under Section 1 above shall have the right to seek contribution from any other Team found liable for the same violation in a proceeding before the Commissioner who shall determine what contribution, if any, is fair and equitable. The Commissioner’s determination with regard to contribution shall be final and binding upon and unappealable by any Team. A contribution determination by the Commissioner may be appealed by the Players Association to the System Arbitrator, except that if such a determination involves fewer than four (4) Teams found to have committed a violation of Section 1 above and allocates damages equally among the Teams found liable, there shall be no appeal to the System Arbitrator. In the event of a contribution determination by the Commissioner, the NBA shall provide the Players Association with the data and information that the Commissioner used or relied upon in making his determination. Any contribution determination appealed by the Players Association to the System Arbitrator shall be upheld unless it is clearly erroneous.

A guilty team cannot avoid punishment by having another team or the NBA reimburse it. Therefore, the team must pay its own penalties, pursuant to the aforementioned Commissioner's determination if applicable. The intent is to ensure the punishment actually affects the offender. The goal is to ensure the punishment actually hurts the offending club. ⓘArticle XIV (Anti-Collusion Provisions) Section 13 (No Reimbursement):

Any damages awarded pursuant to Section 9 above must be paid by the individual Teams found liable and those Teams may not be reimbursed or indemnified by any other Team or the NBA, except to the extent of any award of contribution made pursuant to Section 12 above.

The CBA also holds that the arbitrator can punish frivolous claims and frivolous defenses. There are also time limits at play; a claim must be filed within either 90 days after the player knew (or reasonably should have known) about the collusion, or 90 days after the start of the NBA season in which the violation allegedly occurred, whichever is later. ⓘArticle XIV (Anti-Collusion Provisions) Section 14 (Costs):

In any action brought for an alleged violation of Section 1 above, the System Arbitrator shall order the payment of reasonable attorneys’ fees by any party found to have brought such an action or to have asserted a defense to such an action without any reasonable basis for asserting such a claim or defense.


Article XIV (Anti-Collusion Provisions) Section 17 (Time Limits):

Any action under Section 1 above must be brought within ninety (90) days of the time when the player knows or reasonably should have known that he had a claim, or within ninety (90) days of the start of the NBA Season in which a violation of Section 1 above is claimed, whichever is later. In the absence of a System Arbitrator, the complaining party shall file such claim for breach of this Agreement pursuant to Section 301 of the Labor Management Relations Act in either the U.S. District Court for the Southern District of New York or the U.S. District Court for the District of New Jersey. Any party alleged to have violated Section 1 shall have the right, prior to any proceedings on the merits, to make an initial motion to dismiss any complaint that does not comply with the timeliness requirement of this Section 17.

The nuclear option

Believe it or not, if collusion is that rife, the NBPA can terminate the entire Collective Bargaining Agreement.

There are three different thresholds over which that can happen. If collusion findings in a single season involve five or more teams and harm five or more players, or, If collusion findings across two consecutive seasons involve seven or more teams and harm seven or more players, or, the union proves by clear and convincing evidence that:ten or more teams engaged in collusion and one or more players suffered economic injury, the union may terminate the CBA. ⓘArticle XIV (Anti-Collusion Provisions) Section 15 (Termination of Agreement):

The Players Association shall have the right to terminate this Agreement (pursuant to the procedure set forth in Article XXXIX, Section 3 of this Agreement), under the following circumstances:

(a) Where there has been a finding or findings of one (1) or more instances of a violation of Section 1 above with respect to any one NBA Season during the term of this Agreement which, either individually or in total, involved five (5) or more Teams and caused injury to five (5) or more players; or

(b) Where there has been a finding or findings of one (1) or more instances of a violation of Section 1 above with respect to any two (2) consecutive NBA Seasons during the term of this Agreement which, either individually or in total, involved seven (7) or more Teams and caused economic injury to seven (7) or more players. For purposes of this Section 15(b), a player found to have been injured by a violation of Section 1 above in each of two (2) consecutive Seasons shall be counted as an additional player injured by such a violation for each such NBA Season , or

(c) Where, in a proceeding brought by the Players Association, it is shown by clear and convincing evidence that during the term of this Agreement ten (10) or more Teams have engaged in a violation or violations of Section 1 above, causing economic injury to one or more NBA players.[...]

Difference between collusion and tampering