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NBA Could Hold Player Salaries In Escrow If Games Are Cancelled During COVID Suspension

NBA salary cut: As a result of the extended NBA suspension, the league and NBPA are considering holding at least 25% of all player salaries in escrow.

NBA

As a result of the extended NBA suspension, the league and the National Basketball Players Association (NBPA) are considering holding at least 25% of all the player salaries in escrow. The salary cut will happen if some regular-season games get cancelled amid the coronavirus outbreak. If the NBA is looking to start the NBA 2020-21 season by December, they might have to forgo the regular-season and start with the playoffs. 

Also read | NBA suspension could cause league whopping $1 billion loss in revenues: Report

NBA salary cut: NBA suspension could result in a salary cut if regular-season games are cancelled

According to ESPN, the league is currently figuring out ways to deal with the financial impact caused by the NBA suspension. With social distancing measures extended till at least April, the NBA will be missing more than a month of games. Cancelling games will lead to the players losing just over 1% of their salaries for every game cancelled, which is based on the 'force majeure' clause in the Collective Bargaining Agreement (CBA). 

Also read | Kevin Durant, Donovan Mitchell confirm participation in upcoming NBA 2K tournament

NBA salary cut: Withholding salaries is a preventive measure taken by the league

The league already holds 10% of player salaries in an escrow account, which is given to the players if the salaries given fail to reach the 'collectively bargained percentage' of revenue for the players. If the salaries exceed the amount, the amount is distributed among the owners. Adding another account for escrow payments will most likely eliminate the possibility where a player has to pay from his own pocket. For players who have received a majority of their salary, the difference could be covered next season. Apart from the NBA salary cut, next season's salary cap is also being discussed by the league. NBA executives, including NBA commissioner Adam Silver, will lose 20% of their annual salaries. 

Also read | NBA 'very determined' to resume season, could propose shortened playoffs

NBA salary cut: NBA executives will need to deal with a short-term impact to prevent overall losses

NBA players with coronavirus

Currently, there are 10 NBA players with coronavirus. Utah Jazz's Rudy Gobert tested positive on March 11, after which the NBA suspension was announced. Apart from the NBA players, five NBA members have also contracted the virus. However, Gobert, Donovan Mitchell, two unnamed LA Lakers players and Boston Celtics' Marcus Smart have already been cleared of the virus. While the NBA is trying to make a return in June, no official statement has been made. 

Also read | NBA season cancelled: NBA executives including Adam Silver to lose 20% of salaries after COVID-19 impact

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