The NBA is increasingly optimistic about its ability to continue the 2019-20 season amid a COVID-19 pandemic, according to ESPN Adrian Wojnarowski, but some potentially controversial financial battles might loom in the coming months too.
“force majeure“The NBA bargaining agreement clause gives the league the right to terminate CBA within 60 days of an event that forces the cancellation of regular season or playoff matches (such as, say, a global pandemic). Although the league has not officially canceled any games, the NBA and National The Basketball Players Association agreed last Monday to push the deadline out until September, according to Wojnarowski.
That means the NBA will have the nuclear option to hang over the heads of players – the immediate cessation of CBA now – if both parties cannot reach agreement on many issues regarding the remainder of the 2019-20 season and beyond.
“This CBA was not built for a long pandemic,” Silver told players in a call earlier this month, per Wojnarowski. “There is no mechanism in it that functions to set limits correctly when you have a lot of uncertainty; when our income can be $ 10 billion or it can be $ 6 billion. Or less.”
The league sets its salary cap every year based on projections of income related to basketball for the coming season. Usually using BRI the previous year as a baseline and then increasing that number by a fixed percentage, but canceling each regular season match and / or playoff is likely to throw that option out the window for the 2020-21 season.
The NBA and NBPA can instead agree to collectively bid reasonable estimates for BRI’s projections for 2020-21. However, making accurate BRI projections may be almost impossible given the uncertainty regarding the trajectory of the virus over the coming months.
In a call last week, Silver player being warned that the league is preparing for the possibility of fans not being able to attend matches in 2020-21, according to Wojnarowski. He also noted that “the money built around the night game in the arena” comprises 40 percent of league income, which speaks to significant financial challenges that have the potential to hide.
“To start next season without [the revenue from fans attending games], a small market team that really relies on gate receipts, which doesn’t have a large local TV offering, it’s very successful for them, “said Wojnarowski Sports centerScott Van Pelt on Monday. “And then larger market teams that help subsidize smaller market teams by revenue sharing – lots of teams in the small market that earn more than $ 20 million-plus per year in revenue sharing – well, what income is there to share if there is fans in the arena? “
On Friday, Wojnarowski reported The NBA is “learning how teams can be creative” with regard to fans who attend matches in 2020-21, whether by allowing limited capacity or requiring all present to wear masks.
“… Assuming the vaccine won’t come soon, are there things we can do in our arena where maybe we can’t have 19,000 people, but maybe we can have 5,000 people?” Perak tells the players, per Wojnarowski. “Maybe we can have 8,000 people? Maybe there’s a protocol that allows for that?”
However, before the NBA answers those questions, they must set a salary limit for the 2020-21 season. From there, it becomes a matter of baking the remaining uncertainty into the equation.
As ESPN Bobby Marks Recorded Thursday, league executives have done a lot of ideas.
To protect from steep income shortages, the league can ask players to place a higher percentage of their 2020-21 salary on Escrow, like them currently. If BRI is indeed far below projections, the team will retain a portion of the players’ salaries at the end of the season.
To avoid a big one-year drop in the event that fans cannot attend matches throughout the 2020-21 season, the league and NBPA can instead agree to spread financial damage over the next few years. If the NBA expects revenue to return to normal after next season – its initial limit is projected to rise to $ 125 million by 2021-22 – both parties can agree to artificially raise the threshold next year while simultaneously reducing the 2021-22 projection.
According to Wojnarowski, “some teams are afraid that hats and taxes could go down to $ 25 million to $ 30 million” from now Projection of $ 115 million in 2020-21. That would place most of the league above the luxury goods tax threshold, which could effectively cause free agents to stop this offseason because the team’s tax bill jumped.
The League and NBPA have billions of reasons to find common ground in the remainder of the 2019-20 season and issues such as how to set new salary limits and luxury tax routes in 2020-21 and beyond. Los Angeles Lakers forward Jared Dudley stressed what might be at stake if the rest of the 2019-20 season was canceled.
The nuclear option to rip the CBA doesn’t seem to be on the table for now, but the NBA has the card in its back pocket if negotiations with the players’ union strike at any point. That possibility will have to stop players if the two parties cannot reach agreement on various financial issues that they must bargain collectively in the coming weeks.