NBA and Players Union Working on Plan to Withhold 25% of Player’s Salaries if Season Canceled

The NBA and the player’s union are making plans to withhold 25 percent of the player’s remaining salaries in escrow, if the league cancels the rest of the season due to the coronavirus.

The league has not yet made any decisions about the last few games and the playoffs. But if they do end up canceling the final segment of the 2019-2020 season, the National Basketball Players Association wants to make sure that the players are protected financially as best as they can, ESPN reported.

The contract the NBPA negotiated with the league maintains that a player loses one percent of his salary for every canceled game. This clause covers catastrophic circumstances, which would include epidemics and pandemics, such as the Wuhan virus scare.

If the two parties don’t implement any plan, the players will get paid their full salary in April but will have to pay some of it back to the league, depending on how many games are canceled if that comes to pass.

The complication for the players is serious if they take in a full salary but are then expected to pay some back at a later date. Already the players lose ten percent of their wages into an escrow account in case of the sort of catastrophic issues that player contracts label “force majeure” cancellations.

But the league and the union are hoping to raise the withholding just in case the rest of the season ends up going by the wayside. The hope is that the players won’t be stuck trying to pay back millions in salaries they had already been paid.

“The NBA doesn’t want a scenario in which it has to pursue players for payment on canceled games, which is part of why the league is working with the NBPA on ways for players to budget the loss of income on this season’s salary over an extended period,” ESPN noted.

Any agreement, though, is not viewed as an admission that the season is expected to be canceled. The two groups are just trying to make plans to protect themselves just in case.

NBA officials are also taking pay cuts in response to the coronavirus. About 100 top league officials took a 20 percent pay cut for April due to the coronavirus shutdown.

Follow Warner Todd Huston on Facebook at: facebook.com/Warner.Todd.Huston.