The league had previously proposed to the National Basketball Players Association that players accept a 50% pay check reduction beginning on April 15 due to the suspension of the season, with the NBPA counter-proposing that players take a 25% reduction beginning in mid-May. Today’s news doesn’t mean the union’s proposal won out, but – as Wojnarowski tweets – it does suggest that May 1 will be the next payment date to watch as negotiations between the two sides continue.
The NBA’s Collective Bargaining Agreement calls for approximately a 50/50 revenue split between the teams and players. For now, team owners are bearing the brunt of the NBA’s lost revenue due to the coronavirus pandemic, but that dynamic will have to shift at some point.
As cap guru Albert Nahmad and others have explained, in the event that regular-season and/or playoff games are canceled, the “force majeure” clause in the CBA would allow the NBA to recoup a portion of players’ salaries — approximately 1% per canceled game. However, as long as the remainder of the 2019/20 season is considered to be “postponed” rather than canceled, the league has little leverage to withhold players’ pay for the time being.
If they continue to receive their pay checks in full, players will likely put themselves in a position where they have to return some of that money to the NBA down the road – if and when games are canceled – to balance the revenue split. That’s especially true for players who only receive their annual salaries in 12 installments through May 1 instead of 24 installments through November 1, since those players have nearly been paid in full already for 2019/20.
Not all players will necessarily have to return money to the NBA in the coming weeks or months, even if games are canceled. Jabari Young of CNBC, who wrote earlier in the week about this issue, suggested that for players whose deals run beyond the current season, team owners may instead recoup a portion of their salaries over the length of those contracts.