What happens if NBA players back out of restart in Orlando?

NBA players back out
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Friday night, about 20% of NBA players were on a Zoom call discussing the NBA’s plan for a restart of the season down in Orlando. Kyrie Irving led a group saying they didn’t think players should go to Orlando, for social justice and health reasons. Those are legitimate concerns that lead to a personal decision for each player.

What happens if NBA players back out of restart in Orlando?

It becomes a financial disaster for the league, one that would impact players’ salaries this season, force a renegotiation of the entire Collective Bargaining Agreement (CBA) in the middle of a pandemic, and reshape the NBA for years to come in ways that will not benefit players.

In the short term, players would see their paychecks this season shrivel, with $1.2 billion in player salaries lost, according to Bobby Marks of ESPN. After negotiating with the players’ union, teams are already holding back 25% of player paychecks to help prepare to balance the books this season (players and owners split the league’s “basketball-related income,” or BRI, 50/50, so when revenue fell off from canceled games players’ income had to do the same). If NBA players back out of this season there would be about $2 billion in lost revenue for the league, according to Marks.

Next season things would be far worse for everyone.

The owners would use the force majeure clause to tear up the CBA and force a total renegotiation, doing so in the middle of a pandemic (the owners have until September to do that. The league will have lost billions in revenue, would be looking at losing more next season, and the owners would target a larger slice of the BRI pie. The players would have little leverage, and they could lose some of their guaranteed contract money for next season.

There almost certainly would be a lockout, with the billionaire owners able to wait out the millionaire players to get what they want (there are far more minimum-salary players in the NBA than there are guys making eight figures who can chill during a lockout). This would look a lot more like the 2011 NBA lockout, a situation where the players went into it getting 57% of the BRI and came out of it with a 50/50 split with owners. The players got crushed in that negotiation. It would happen again.

Beyond that, the league’s television contracts would need to be renegotiated, both national and regional. The NBA had seen a dip in traditional ratings last season. While the league can argue it is on the forefront of streaming to get younger viewers to watch games, television networks would be looking to lower their costs and recoup money on games they were not able to broadcast.

There is a strong economic argument that players should get behind a return to play in Orlando. It’s the case Chris Paul and other superstar players have been making, and the league chose a 22-team restart because it generated the most revenue.

However, with health concerns and vital social justice issues on the other side, money is not the most important factor for many players. Some NBA players are ready to back out of the restart plan, and the league has said they can back out without fear of punishment (although they do not get paid).

How many players will stay home rather than go to Orlando, and will it be enough to kill the restart, remains to be seen. Their choice will impact the NBA for years to come.