NBA Labor Deal Allows for Pay Cuts for Games Lost to Coronavirus
NBA Labor Deal Allows for Pay Cuts for Games Lost to Coronavirus
(Bloomberg) -- If the coronavirus outbreak ultimately forces the National Basketball Association to cancel games, the league has terms in its labor agreement that could soften the blow for owners.
Under the force majeure clause in the contract, each player on the roster could forfeit about 1% of his pay per game canceled. The formula takes into account preseason, regular season and potential postseason play.
Some sporting events have already been lost to the outbreak. The BNP Paribas tennis tournament was canceled Sunday after public health officials in California declared a emergency. Sports across Europe, including soccer matches that involved marquee teams and players, are being staged without fans. Italy has halted all events through April 3.
The clause in the NBA contract was negotiated after the Sept. 11 attacks, and includes events like war, sabotage, terrorism, natural disasters, explosions, government orders and epidemics.
So the Los Angeles Lakers, for instance, would withhold about $404,000 per canceled game from LeBron James’s salary of about $37.4 million.
The NHL, which like the NBA is heading toward its playoffs, has a similar clause in its standard contract, though it doesn’t specify epidemics. It, too, calls for a prorated reduction in pay for “any condition arising from a state of war or other cause beyond the control of the league.”
Neither contract offers team owners any pay concessions if games are played without fans in the seats, resulting in revenue lost from concessions and parking.
The NBA’s salary cap, or the total amount teams can pay their players, is tied to revenue. A dip in revenue would mean a lower cap, which translates into lower player salaries.
The NBA regular season ends April 15, while the NHL’s ends April 4.
To contact the reporter on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum
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