HOUSTON – At least 25% of the salary of North American professional basketball players will be reduced as of May 15, according to what was known this Friday by the salary plan prepared by both the league and the NBA union.
However, the checks that players will receive on May 1 will arrive without reduction.
Although the league has not released the final content of the plan, journalistic sources assured that it aims at a gradual reduction in the salaries of the players before accepting the labor agreement that allows the league not to pay for greater causes as a pandemic.
This would have to be adopted if the cancellation of the regular season matches is promulgated from May.
This would allow the league to establish a deposit account guaranteeing to return players in the event that the regular season can be completed, with 259 games remaining to be played.
Otherwise, the teams would keep a percentage of the money based on the cancellation of the games, which is calculated to be more than two million dollars per game.
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Withholding wages would avoid a scenario where players could go multiple pay periods without wages, if the NBA canceled most or all of the remaining games of the regular season.
According to the plan drawn up by the NBA and the union, both parties will distribute salary deductions in the first four pay periods, until November and December, of the 2020-2021 season.
The NBA has no immediate plans to announce the cancellation of any regular season games, and the union has informed its associates that it will not be until June 15 when the players know if the games are canceled.
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According to the collective agreement, players lose 1% percent of the salary for each game canceled, according to the force majeure provision that covers various catastrophic circumstances, including epidemics and pandemics.
Once the game cancellation occurs, the force majeure is automatically activated under the current collective agreement that is in force within the NBA.
The use of force majeure further protects against a big drop in the salary cap and the luxury tax for next season.
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Force majeure is yet another mechanism for the NBA to make the financial formula work to deliver players the agreed 51 percent share of revenue with owners.
The league already has 10 percent of players’ wages withheld.
The significant decrease in revenue would result in the projected 380 million escrow returning to all 30 NBA teams after the season.
If the amount of projected loss of revenue without the application of force majeure exceeds the current amount of retention available to teams, the NBA would need other means to compensate for the loss.
In the event that wages decrease as a result of missed matches to the point that there is a shortage of the retention system, the 10 percent% currently retained would likely be returned to the players.