- The NBA began a 25% decrease in player salaries on Friday, equaling $30 million, as the suspension for the coronavirus pandemic continues.
- Six of the top 10 highest-paid players, including LeBron James and Stephen Curry, did not see a reduction, as they have already been paid in full, and will make up the reduction in the form of “IOUs” next season.
- The NBA faces potentially dire financial circumstances as they lost business in China this season, games due to the suspension, and possibly gate revenue next year if they play behind closed doors.
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With the NBA season still suspended due to the coronavirus pandemic, NBA teams reduced player salaries by 25%, according to ESPN’s Bobby Marks.
The reduction is part of a temporary pay-cut agreed upon by the league and the players union. ESPN’s Adrian Wojnarowski described it as: “something of an escrow account that would return money to the players should all the remaining regular-season games be played in a resumption of the season. Otherwise, teams would keep a percentage of the money based on the cancellation of games.”
In total, teams are cutting $30 million in player salary on Friday, May 15.
According to Marks, if the NBA has to cut regular season games and go right to the playoffs, the reduction could go as high as 40% of player salary. If the NBA has to cancel the season, players will lose an estimated total of $1 billion in salary.
However, some of the league’s highest-paid players will not immediately be affected by the reduction, according to Marks. That group consists of LeBron James, Stephen Curry, John Wall, Blake Griffin, Paul George, and Kevin Durant.
Those six players have already been paid in full and instead will have an “IOU” per paycheck for the 2020-21 season for each time there is a 25% reduction, according to Marks.
Marks reported that while teams have been instructed how to preserve the funds, they are free to spend them how they want. Marks said teams contacted by ESPN had no plans to spend the money, but some that are short on cash could use the money now.
The move comes as the league faces potentially dire financial circumstances. Commissioner Adam Silver estimated that the league could lose as much as $400 million in lost business from its controversy with China in the beginning of the season. One estimate said the league could lose as much as $1 billion if it can’t resume the season from the coronavirus. And Silver recently warned players that fans and gate revenue make up about 40% of the league’s revenue each season. The league could lose a sizable amount of money if games are played behind closed doors for the foreseeable future.
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