October 2020 Basketball Wiretap

NBA To Set Salary Cap At $109M, Luxury Tax At $132M For 20-21 Season

Oct 28, 2020 10:18 PM

The salary cap for the 20-21 season is expected to be $109 million with the luxury tax line at $132 million, multiple sources tell Shams Charania of The Athletic.

Michele Roberts revealed to The Athletic that the NBA and NBPA are close to agreement on the salary cap and tax.

If the league were to keep the salary cap as a percentage of basketball related income, it would likely be approximately $90 million. The NBA and NBPA are artificially smoothing the cap in order to protect teams from exorbitant luxury tax payments and also to help the 2020 free agency class sign deals with future earnings tied to a percentage of the cap more aligned to what the figure would have been if not for the COVID-19 pandemic. 

Shams Charania/The Athletic

Tags: NBA, NBA CBA

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NBPA Won't Be Rushed Into Decision On Dec. 22nd Start By End Of This Week

Oct 28, 2020 10:13 PM

The NBA and NBPA have a deadline of Friday for either side to serve notice to terminate the collective bargaining agreement, but Michele Roberts told The Athletic that the players will review the league's proposal and does not anticipate a decision on the Dec. 22 start to the season by the end of the week.

“The union and the players are analyzing all of the information and will not be rushed,” Roberts told The Athletic. “We have requested and are receiving data from the parties involved and will work on a counterproposal as expeditiously as possible. I have absolutely no reason to believe that we will have a decision by Friday. I cannot and will not view Friday as a drop dead date.”

Both sides can extend negotiations beyond the Friday deadline.

“This summer, up through just two short weeks ago, our players accepted the challenges posed by and risks to their personal health and safety in order to save our season. Separated from their communities and their families, these men lived in isolation for months. Each day could have been met with the news that this awful virus had invaded their space and they were exposed to likely infection. They stayed the course, followed the protocol and, as a result, were able to deliver fabulous competition and completed the season able to crown a champion. It has been reported that those efforts generated an additional $1.5 billion dollars of revenue to be enjoyed by the players — and the team owners.”

The NBA is proposing a 72-game season amid the ongoing COVID-19 pandemic that is getting worse in most parts of the United States.

“The players are now being asked to re-pack their bags and head back to camp in a little over a month. The prospective loss of revenue largely forms the basis of this proposal. Since its receipt a week ago,  the NBPA  — as is our practice — is reviewing and assessing the proposal and its underlying thesis. We will do so as expeditiously as practicable. Our focus will also include an analysis of any relevant health and safety implications. Simultaneously, we will be addressing these issues with our players. And, while we are all anxious to resolve these and other substantive issues outstanding between the parties, we plan to proceed at a pace that provides our players ample opportunity to determine the best way to proceed.”

The gaps between the NBA and NBPA center around the Dec. 22nd start date as well as the player escrow and total revenue situation. 

Shams Charania/The Athletic

Tags: NBA, NBA CBA

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NBA Likely To Artificially Keep Cap At $109M Instead Of True Figure Of $90M

Oct 28, 2020 5:07 PM

The NBA and NBPA are negotiating methods of artificially inflating the 20-21 salary cap to keep it around $109 million.

If the NBA and players were to link the salary cap to overall league revenue using its normal formula, it would have fallen to around $90 million.

Those discussions on the salary cap and luxury tax are at the core of what needs to be decided to finalize a revised collective bargaining agreement. The two sides must also agree to an escrow system to account for the anticipated shortfall.

The union is having its own internal discussions with its membership considering spreading the hit over multiple years to not put one subset of players at a disadvantage. 

Adrian Wojnarowski, Zach Lowe/ESPN

Tags: NBA, NBA CBA

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NBA's Revenue Declined By Just 10 Percent During 19-20 Season

Oct 28, 2020 5:02 PM

The NBA's revenue for the 19-20 season dropped by just 10 percent to $8.3 billion due to the COVID-19 pandemic.

The balance of the finances included an $800 million loss in gate receipts and a $400 million loss in sponsorships and merchandise. 

The NBA also believes there was a $200 million "net negative impact" from its splintering of a partnership with China following Daryl Morey's Tweet supporting Hong Kong a year ago.

The NBA bubble in Orlando recouped $1.5 billion in revenue that would've been lost without restarting the season. The bubble cost the league $190 million, which was $10 million more than originally estimated. 

The league is projecting a 40 percent loss in overall revenue, or approximately $4 billion, if the 20-21 season advances without fans and accompanying gate-night receipts. 

Adrian Wojnarowski, Zach Lowe/ESPN

Tags: NBA, NBA CBA

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Substantial Faction Of Players Pushing For Jan. 18th Start Date, Free Agency On Dec. 1st

Oct 28, 2020 4:55 PM

A substantial factions of NBA players, including many of its stars, are pushing for the 20-21 season to begin on Martin Luther King Day on January 18th instead of the currently proposed start date of December 22nd.

Under the players' preferred plan, free agency would begin on December 1st, which would give free agents substantially more time to negotiate their contracts.

The league believes there would be $500 million in additional revenue during the 20-21 season if it begins the season before Christmas Day, which would also allow for a return to the NBA's normal calendar for the 21-22 season.

Chris Haynes/Yahoo! Sports

Tags: NBA, NBA CBA

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Salary Cap For 20-21 Season Unlikely To Drop Below $109M

Oct 26, 2020 1:54 PM

The salary cap for the 20-21 season is expected to be no less than $109 million, according to the messaging teams have received from the league office.

"The teams I've talked to have said the cap will be no lower than $109 million," said Bobby Marks on The Lowe Post. "That's what they've been assured. It could be $111 million.

"When it comes to 21-22, teams are using $115 million as the number right now. I think that's potentially going to be higher because I think revenue for 21 and 22 gets back to some type of normalcy. And that will certainly have what the league will use as a projection."

Unlike most seasons, the cap won't be an accurate representation of projected BRI.

Bobby Marks/ESPN

Tags: NBA, NBA Misc Rumor, NBA CBA

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NBA Optimistic Players Will Agree To Mid-December Start Of Season

Oct 26, 2020 10:53 AM

The NBA and NBPA are widely expected to agree to revised collective bargaining agreement this week, which is their deadline to start the season by mid-December.

"I don't really think the players have much of a leveraging point here," said Brian Windhorst on his podcast. "They're probably going to have to agree to this.

"In talking to people on the league side this past week, they didn't act like getting the players to agree was going to be that big of a stumbling block. I'm sure some people are going to be upset, but I'm not sure what they can do about it."

The start of the season will take place 72 days after Game 6 of The Finals featuring the Los Angeles Lakers and Miami Heat.

Brian Windhorst/ESPN

Tags: NBA, NBA CBA

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NBA Could Withhold 40 Percent Of Player Salaries In Escrow During 20-21 Season

Oct 23, 2020 9:58 PM

NBA agents are bracing for the possibility that the league will withhold up to 40 percent of player salaries during the 20-21 season in escrow, sources tell ESPN's Bobby Marks.

That money would offset anticipates losses incurred by the league due to a drop in revenue in having either a limited number of fans attend games in person or no fans together. 

Players and owners split all basketball related income 51-49.

The salary withheld is roughly $1.6 billion based on $4 billion of projected salary for the 2020-21 season.

Bobby Marks/ESPN

Tags: NBA, NBA Misc Rumor, NBA CBA

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NBA, NBPA Hold Productive Talks On CBA Ahead Of Oct. 30 Deadline

Oct 23, 2020 12:47 PM

Negotiations between the NBA and union have been productive on making the necessary financial allowances on 20-21 salary cap and luxury tax thresholds to account for the massive losses in revenues from the COVID-19 pandemic.

The NBA and NBPA agreed they would set a deadline of October 30th to complete their modifications to the CBA for 20-21. If a deal is reached by then, they could conceivably start the season on Christmas Day.

Ongoing talks are centering on increased escrow taken from players' salaries.

The two sides have met several times since the conclusion of The Finals to discuss both financial issues and scheduling challenges. 

Adrian Wojnarowski, Brian Windhorst, Zach Lowe/ESPN

Tags: NBA, NBA CBA

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NBA's Next CBA Could Allow Players To Use Marijuana Without Penalty

Oct 20, 2020 8:15 AM

The NBA didn't test players for marijuana during the restart in Orlando, which could have contributed to the elevated quality of play and may be something that gets negotiated into the next collective bargaining agreement.

Under current NBA rules, a player only receives a five-game suspension after their third positive test.

"Honestly, I think pot becomes legal in the next collective bargaining agreement," said Bill Simmons on the Zach Lowe podcast. "That was another lesson we learned from this bubble. They weren't testing for pot. Could that have been one of the factors [why] quality of play was better? Maybe? Recovery?"

"If you're going to have players live in the bubble in Disneyworld for three-and-a-half money, you've got to make some allowances," replied Lowe.

The MLB and NHL have already essentially eliminated punishments for positive marijuana tests.

Bill Simmons/The Ringer

Tags: NBA, NBA CBA

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NBA Preserved $1.5 Billion In Revenue With Bubble

John Lombardo/Sports Business Journal

NBA, NBPA Agree To Extend CBA Termination Deadline To Oct. 30

Adrian Wojnarowski/ESPN

Michele Roberts: NBA Will Remain An Incredible Revenue-Generating Machine

Shams Charania/The Athletic

Adam Silver, Michele Roberts Met On Sunday To Set Foundation For Bargaining Talks

Shams Charania/The Athletic

Adam Silver Expects 'Some Difficult Negotiations Ahead' With Players

RealGM Staff Report