The NBA plans to deliver players full salaries due on April 1, but left open the possibility of recouping future salaries for cancelled games on April 15, according to a league memo shared with teams on Friday.
As the coronavirus pandemic paralyzes the NBA and nation, the cancelled games and loss of revenue is causing the NBA to leave itself financial flexibility based upon the Force Majeure provision in the Collective Bargaining Agreement.
Force Majeure allows for a withholding of 1/92.6 payment per cancelled game based upon catastrophic circumstances. The language includes several scenarios such as war, natural disasters and epidemics/pandemics.
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 percent of their season’s 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 percent escrow tax.
Even prior to the coronavirus outbreak, the league had been projecting that the players wouldn’t receive 100 percent of their escrow back.