The NBA plans to deliver players full salaries due on April 1, but left open the possibility of recouping future salaries for canceled games on April 15, according to a league memo shared with teams Friday.
As the coronavirus pandemic paralyzes the NBA and nation, the canceled games and loss of revenue are causing the NBA to leave itself financial flexibility based on the force majeure provision in the collective bargaining agreement.
Force majeure allows for the withholding of 1/92.6 of a player’s seasonal salary per canceled game based upon catastrophic circumstances. The provision encompasses several scenarios including war, natural disasters and epidemics/pandemics. (For the purposes of force majeure, the league considers each team to have played five preseason games, 82 regular-season games and 5.6 playoff games.)
The NBA plans to inform teams and players ahead of the April 15 payment date about the league’s intentions, the memo said. Most NBA players will have received around 90% of their seasonal salary after the April 1 payments, according to ESPN’s Bobby Marks.
Commissioner Adam Silver suspended play on March 11 after Utah’s Rudy Gobert tested positive for the coronavirus. NBA games are lost every day, practice facilities have been shuttered indefinitely and Silver says that it’s unclear when — or even if — the NBA season can resume.
The league has been pursuing arena dates through the end of August in hopes of pushing back the season and minimally salvaging the playoffs. NBA owners are bracing for massive financial losses — especially if the season is unable to resume.
If the NBA exercised the force majeure to reflect missed games now, the league could pay the players later if those games were somehow made up during a later resumption of play. Most players are paid in 24 checks annually, and the first 12 checks include the 10% escrow tax.
Even prior to the coronavirus outbreak, the league had been projecting that the players would not receive 100% of their escrow back.