​ $1.7 billion downfall to smash the NBA ​

The NBA reportedly is considering enforcing the force majeure provision in the collective bargaining agreement to recoup player salaries for future cancelled games due to the coronavirus pandemic.

The league sent a memo to teams Friday informing them that player salaries are expected to be paid on April 1, but “left open the possibility” to withhold pay for the next period on April 15, according to ESPN’s Adrian Wojnarowski.

“As the coronavirus pandemic paralyses the NBA and nation, the cancelled games and loss of revenue are causing the NBA to leave itself financial flexibility based on the force majeure provision (in the CBA),” the report stated.

According to the CBA, force majeure enables the NBA to withhold a portion of player salaries due to catastrophic circumstances such as war, natural disasters and epidemics or pandemic illnesses. ESPN reported players could be docked 1/92.6 of their yearly salary per cancelled game based on a force majeure formula of five pre-season games, 82 regular season and 5.6 playoff games per team.

NBA Commissioner Adam Silversaid Saturday the league is considering all options - best-case, worst- case and countless ideas in between - as it tries to come to grips with this new normal. But definitive answers on any front are in short supply.

“It’s too soon to tell what the economic impact will be,” Silver said. “We’ve been analysing multiple scenarios on a daily if not hourly basis and we’ll continue to review the financial implications. Obviously, it’s not a pretty picture but everyone, regardless of what industry they work in, is in the same boat.”

Saturday marked the 10th full day of the NBA’s shutdown, a stoppage that has cost the league 75 games and counting so far, a total that will reach triple digits on Wednesday and will eventually get to 259 on April 15 - the day the regular season was supposed to end.
 

The NBA informed teams that league will provide "additional guidance" on the April 15 payment date, per memo today. Force Majeure language in CBA allows for a percentage of contracts to be withheld in extreme circumstances. It isn't a surprise NBA would wait on April 15 date. https://t.co/eTmCNL0UH5

— Adrian Wojnarowski (@wojespn) March 21, 2020

Play isn’t going to resume by then. The financial losses will be massive and will obviously just keep growing if this season cannot resume or if next season is affected.

According to fivethirtyeight.com, those losses could reach $US1 billion ($A1.7bn) quite easily.

Additionally, ESPN’s Bobby Marks, a former Nets executive, reported that NBA players on a payment schedule of 12 instalments that began on Nov. 15 will have been paid 90% of their salary through the April 1 payments, but those who elected to be paid over the entire calendar year are still owed a projected 60% of their yearly salary.

The NBA expects to notify teams and players before the April 15 payments are due about the league’s plans, the memo stated. If force majeure is enforced, players still could recoup missed payments if those games are made up if/when play resumes at a later date.

Play was suspended by NBA commissioner Adam Silver on March 11 after Utah Jazz centre tested positive for coronavirus. Nine other players have since been confirmed to have contracted COVID-19, including Kevin Durant and three unidentified teammates on the Brooklyn Nets.

This article originally appeared on the NY Post and was reproduced with permission.