The NBA’s Collective Bargaining Agreement allows teams to reduce players’ salaries in event of a Force Majeure Event – things like war, terrorism, natural disaster, government action and epidemics. Of course, an epidemic has become relevant as the NBA season is on hiatus due to the coronavirus.
If the 2019-20 season is over, players could lose 22%-27% of their salaries (depending on their team’s games remaining). Even just a reduction in season length could lead to (lower) salary reductions.
The players’ union apparently warned its members about that possibility.
In a correspondence to players addressing the uncertainty surrounding the NBA’s indefinite suspension of play, the National Basketball Players Association on Friday spelled out terms on a doomsday provision included in the Collective Bargaining Agreement that could free owners from paying players a percentage of their salaries should the rest of the season be lost to the coronavirus pandemic.
In the email, the union told players that there had been no discussion with the league on the provision.
A salary reduction seems unlikely. The union is just doing its duty by alerting members of the possibility. Because the impact would be so significant – even if the possibility is remote – players should begin to prepare just in case.
But they also shouldn’t panic.
NBA owners have made many gains by making players feel as if they’re partners in the business. Triggering that clause would cause massive backlash from players and undo much of that progress. It’s probably not worth it.
The NBA will likely lose a lot of money from this hiatus. Even if the full season is played after resumption – not the most likely scenario – there are other complications. Would games have to be played outside primetime (e.g., on weekday afternoons) because arenas are booked with other events? Would next season have to be shortened because this one would eat up so much of the planned offseason?
The lost revenue will be felt by both sides, as owners and players split Basketball Related Income. That’s how the partnership was designed, and that’s probably the extent to which it’ll apply to this crisis.