The NBA has proposed to the National Basketball Players Association that players accept a 50% pay check reduction beginning on April 15, sources tell Shams Charania of The Athletic (Twitter link). According to Charania, the NBPA has issued a counter-proposal that would see players’ pay checks reduced by 25%, beginning in mid-May.
It would be in both sides’ best interest to resolve these negotiations – which were reported earlier in the week by ESPN’s Adrian Wojnarowski – fairly soon, since the players’ next checks are due in 12 days.
Thus far, team owners have assumed the brunt of the financial losses from the NBA’s stoppage of play, but the impact of that lost revenue will soon hit the players, since the league’s Collective Bargaining Agreement calls for approximately a 50/50 revenue split between the two groups.
The NBA already holds 10% of players’ salaries in an escrow account and would normally either pay out or withhold some or all of that money at season’s end, depending on whether the players were overpaid or underpaid over the course of the year, relative to the revenue split.
Given how much money the league projects to lose this season, the amount in that escrow – approximately $380MM, per Eric Pincus of Bleacher Report – likely won’t be enough to cover the players’ half of the losses, which is why the NBA is looking to recoup an additional portion of its players’ salaries.
The exact amount that the NBA gets back from players will depend on whether or not any part of the season can be salvaged this summer and how much revenue the league ultimately loses. As Pincus notes in a tweet, the NBA’s proposal – a 50% reduction beginning on April 15 – may suggest that the league believes its losses this season will total more than the $1.2 billion he estimated in his article.
If the two sides can’t come to a satisfactory agreement that helps maintain the revenue split, the players would simply be delaying rather than avoiding the financial impact of the suspended season. The effects would be felt if and when the NBA invokes the “force majeure” clause for canceled games, which would unilaterally reduce players’ salaries and could result in re-opened CBA negotiations. The salary cap for 2020/21 could also drop substantially if players earn a much larger portion of the revenue split than owners in ’19/20.
a reduced salary cap could have a huge impact on free agency
Almost around 40 million per team. Interesting…..
If there is no games then the players shouldn’t be paid.
Nice handle, Richard.
I hope they maintain social distance while negotiating.
50% seems like a pretty good offer considering they really don’t have to do anything for the money.
Little confused why players think they should get paid for staying home. There is no revenue, there is no money to pay salaries. Not hard to figure out. They can demand whatever they want, can’t squeeze water from a rock.
There are still some revenues. NBATV is still on the air making money. They are still selling jerseys and other memorabilia. The owners are not making full profits, but they are not going to be filing bankruptcy anytime soon either.
The point is if they are at home because they do not wanna play, then they shouldn’t be paid, but they are at home against their will, just like most workers around the world, if you are forbidden from work, you must still be paid.
The point should be who pays them, not if they get paid, the government should step in & pay the salaries of all the business they have been closing down.
Gov has and likely will continue to pay the majority of those costs. Id imagine stimulus packages they have or will pass will include financial assistance of some kind for employer losses, but gov rarely foots the entire bill. Still when you look at the the jobs sector, employees losing income due to layoff already get part of that back in unemployment, if they really do toss 1300 or so to everyone for a couple of month’s id imagine that covers most low end workers losses. High end workers like the players lose more money, dont recoup as much, but their losses are trivial by comparison. This isnt publishers clearing house this is your money being spent and its not enough so well have to borrow and rack up the deficit just to fit this expenditure into the fiscal budget. Of course corps get tax breaks, its for being so nice for lending us the money.
Should just go ahead and split the difference and make a deal now. A 37.5% pay cut starting on May 1st.
Can very easily and quickly readjust if play resumes.
Would also be great PR for everyone on both sides.
paid far too much to begin with. make it a permanent cut.
Jealousy is truly unbecoming!!!
If owners cannot agree on a restart, their force majuer case for a 100% paycut loses steam.