Report: NBA, NBPA May Hold Up to 25 Percent of Player Salaries in Escrow

Tyler Conway@jtylerconwayFeatured ColumnistApril 1, 2020

SAN FRANCISCO, CALIFORNIA - MARCH 07: A detail shot of the gam e ball during the game between the Golden State Warriors and the Philadelphia 76ers at Chase Center on March 07, 2020 in San Francisco, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Lachlan Cunningham/Getty Images)
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The NBA and NBPA are discussing the possibility of holding up to 25 percent of remaining player salaries in escrow if some regular-season games get canceled due to the coronavirus pandemic.

ESPN's Adrian Wojnarowski reported the league and the players' union are weighing how to financially handle the potential of canceled games. The NBA has missed nearly three weeks of games so far, and the White House announced Monday that social distancing measures will continue through at least April.

The NBA has no plans to announce a cancellation of games in the immediate future, according to Wojnarowski. Once games are canceled, players would automatically lose 1.08 percent of their salary for each canceled game, based on the force majeure provision in the collective bargaining agreement.

Uncertainty regarding when (or if) games will resume has led the union and league to get ahead of any potential issues.

Withholding salaries now would avoid a situation in which players would later owe their teams money in the event of game cancellations.

The NBA already holds 10 percent of player salaries in an escrow account. That money is distributed to players at the end of the league year if player salaries fail to reach the collectively bargained percentage of revenue given to players. If player salaries exceed the agreed-upon percentage, the difference is then distributed to the owners.

Adding the second escrow payments would likely eliminate any scenario in which players had to pay money back out of their own pockets. For certain players who have already received the majority of their salary for the 2019-20 season—Wojnarowski estimates it's less than 10 percent of the player pool—the league could garnish the difference from next season's salary.

Commissioner Adam Silver and the league's office's top executives agreed to take a 20 percent pay decrease to offset losses caused by the coronavirus pandemic.

The NBA and NBPA will also likely have to negotiate other items, like the salary cap, that would be affected by the loss of games. The NBA may have to refund television partners for games missed because the contracts were negotiated based on an 82-game regular season.