March 2020 Basketball Wiretap

NBA, NBPA Likely To Start New Collective Bargaining Round Due To COVID-19

Mar 26, 2020 12:18 PM

The COVID-19 crisis and the suspension of the season will likely force the NBA and its players to have a completely unexpected round of collective bargaining in the coming weeks. The two sides will likely negotiate a change to the league calendar, temporary or permanent, as well as cap smoothing due to a decline of projected revenue. Other topics such as rules on entering the draft could also come into play.

"The NBA and the union are going to have to negotiate when they come back," said Brian Windhorst on his podcast. "They're going to have to open the collective bargaining agreement for simple things like changing the league year. The league year is going to change, but they're going to have to be concessions asked by the owners potentially and there are going to be some asks for the players.

"I believe we are heading for a bargaining session over the summer. The CBA, which was locked in for years, something like seven or eight years, I believe firmly is going to reopen over the summer. There are going to be certain things that can be negotiated. For example, if they're already opening the CBA about how to retrofit the NBA calendar or change the salary cap stuff, maybe they put one-and-done in there while they're doing it. There's going to be negotiations and horse trading. That is why the relationship between players and owners is something to watch right now. They're going to have to get agreement to start playing again. They're going to be outside their parameters that they've agreed to."

Brian Windhorst/ESPN


NBA Has July 1st Through Labor Day As Loose Cutoff Dates To Salvage Season

Mar 24, 2020 4:59 PM

Sources say the loosest of cutoff dates on completing the 2020 NBA Finals is Labor Day weekend in early November. Teams say that would necessitate games resuming by July 1st and practice facilities reopening weeks before that. Labor Day falls on Monday, September 7th this year.

Practice facilities are currently closed to players in compliance with CDC recommendations on limiting the spread of COVID-19.

No stakeholders in the NBA, from the owners to teams to players want to limit the possibility of the season being salvaged even if it finishes later than September. 

It is believed the NBA would prefer to finish the season before the start of the NFL season on Thursday, September 10th.

Adrian Wojnarowski/ESPN


NBA Still Receiving TV Payments, Could Do Makegood Over Several Years

Mar 19, 2020 3:30 PM

The NBA continues to receive payments from their broadcast partners despite the season currently being suspended due to COVID-19, according to sources that spoke with Bloomberg.

The NBA has a $2.6 billion annually deal with ESPN and Turner.

“This is an unprecedented situation,” ESPN said in a statement. “We have great relationships with our league partners and are confident we can address all issues constructively going forward.”

Said Turner: “We have strong, longstanding relationships with our partners, and we’re confident we will be able to find solutions that work for all of us, despite this truly unprecedented situation.”

The NBA's existing broadcast contracts expire after the 24-25 season and the value lost to the networks could be made up over the life of the deals, according to sources. That exact value must be negotiated.

Almost $700 million of ads will be at risk for Disney should the suspended season be fully canceled.

Scott Soshnick/Bloomberg


Michele Roberts: NBPA Actively On Same Page With NBA Trying To Save Season, Playoffs

Mar 17, 2020 9:23 PM

Michele Roberts spoke with Mark Medina of the USA Today about several important issues facing the National Basketball Players Association amid COVID-19.

“If you look at our CBA, there is some troubling language if you are a player," said Roberts. "I’m a lawyer by training and the concept of a ‘force majeure’ is common in any contract. ... No matter what differences we may have in the league in the past or going forward, we’re actively on the same page about trying to save our season and trying to save our playoffs. ...

"The revenue consequences are significant. Sure, there is language that allows the league to enforce what they perceive to be a ‘force majeure’ and that would have an impact on compensation for players going forward. But if it happens, there would be a recognition the league is prepared to lose tens of millions of dollars. If we can’t play games or we can’t have our playoffs, we’re going to have an economic hit.”

Roberts was asked whether conversations with the league have been more about salving the season and then figuring out addressing any potential clauses at a later date.

“That’s right on the money. We want to play games and we want to do it in a way that’s safe. ...It’s very difficult to say by ‘X date,’ we’re going to resume the games. That would be foolish. But we’re not throwing in the towel.”

Mark Medina/USA Today


NBA Raises Credit Line From $650 Million To $1.2 Billion

Mar 17, 2020 9:09 PM

The NBA is planning on raising its credit line up to $1.2 billion in response to COVID-19, sources tell ESPN's Adrian Wojnarowski.

The previous credit line used by the NBA has been $650 million.

NBA revenues were already expected to be down due to its decreased business with China this season, but the potential loss of games will further test the economic strength of the league and its owners. 

Adrian Wojnarowski/ESPN


NBA Willing To Entertain Test Of Christmas To August Season

Mar 16, 2020 10:04 PM

Atlanta Hawks CEO Steve Koonin recently proposed starting and ending the NBA season two months than they currently do in order to avoid footballl. Due to the NBA suspending the 19-20 season because of COVID-19, the league may be forced to adopt 

"I even had one team president, who I respect, who I think has some level of influence in the league said to me the other day that he never really liked that Koonin idea, but the more he thinks about it now, the more it does intrigue him," said Adrian Wojnarowski. 

"That will be interesting. It may come out of necessity that next season starts in December and ends deeper into the summer. It would be a fundamental change to the calendar. Summer League, the draft, free agency...they're all moved back.

"Would you do Summer League in Las Vegas in late August or early September?

"I do think that idea is going to be entertained because it seems as though, even in the best case scenarios, next season probably has to be moved back."

The NBA was already open to the idea before the suspension of the season.

"You're going to hear more about that idea and maybe it gets tested out of necessity."

Bobby Marks outlined what the new NBA calendar would look like.

Adrian Wojnarowski/ESPN


Players Would Lose Between 21-24 Percent Of Salary If Season Canceled Altogether

Mar 16, 2020 9:35 PM

NBA players have a force majeure condition in their contract stipulating that they lose 1/92.6 of their salary for every game missed. Players and other NBA personnel have this clause in their contracts.

"I think generally, my sense is this, if there are games canceled but there's a few regular season games left to remember, most teams have played about 20 percent of their schedule, 20 percent of their money left," said Adrian Wojnarowski. "Obviously some teams have played more games than others, but for the most part, for most players it might be that if they didn't play another games this year...I think they told the players (between) 21 and 24 percent of their salary based on those factors.

"If the league was able to finish the season. Play a few regular season games and then play the playoffs, I would be surprised if the owners even considered trying to take back the money off whatever missed games that were there. If they don't play again this year, if the season is canceled, it's different, although again the money is due April 1st and then April 15th and it will be interesting because I think as much as anything in talking to people, it will be somewhat of a negotiation because remember the owners need the players in whatever form the season comes back to, whatever next year might look like. They have to be able to work with the players on this. A lot of this is collectively bargained with the union. Don't underestimate the power the star players have in this instance over what the future landscape looks like. We're not there yet."

Adrian Wojnarowski/ESPN


Some NBA Teams Will Delay Charging Season Ticket Holders For 20-21 Renewals

Mar 16, 2020 9:04 PM

The NBA was already facing a decline in projected revenues this season due to its situation with China, but the impact of the coronavirus will be much more significant both in terms of likely loss gate receipts and the probability of a overall decline in the economy.

Teams typically receive deposits on season ticket renewals this time of year and may hold off on charging fans due to the uncertainity with the global economy amid the ongoing pandemic. 

"Everyone wants to get paid here: the players, the teams, the owners," said Adrian Wojnarowski on his podcast. "They want to play as many games as they can here so the financial hit is as limited as possible. It may not be possible and they may not have control over that. This is a year in which, I think financially for the owners and... health and the well-being people is... I believe is the number one priority. It has to be, but money plays a part because it does in everything.

"I think the league could have survived the hit on China financially with a bigger hit for Houston than it was for other teams. I think everybody was going to feel it just a little bit. This will be a much bigger percentage: whether it's television revenue, gate receipts, sponsorships and all the things going forward.

"This is the time of year when teams are clicking people's credit cards on renewals for next season. Some teams might put those through. Some, I'm told, may not. They may hold off on depositing that money right now in the wake of this. There's a lot at stake.

"The league, more than gate receipts ultimately, it's getting the games on television. Whether it's the regional networks and then the national deals that Turner, ESPN... Getting games in the postseason on TV and to that end, knowing that it is 'likely', 'possible', 'certain', wherever you want to fall on it, that if the games resume, they will probably do so without fans in the arena, at least initially. The league is open to not having these games in arenas."

Adrian Wojnarowski/ESPN


NBA Needs Full Playoff Schedule In Order To Hit Next Year's Cap Number

Mar 16, 2020 3:10 PM

The NBA almost certainly won't play an abbreviated playoffs such as a single elimination tournament.

"The league needs that four rounds of best of seven," said Brian Windhorst on The Hoop Collective Podcast. "When I say the need it, the revenue it brings from a television standpoint and the revenue standpoint for tickets, and we don't know if fans will be let into these games, but at least in theory as we're sitting working with the spreadsheet waiting for the world to get ahold of itself, they need that to hit next year's salary cap number."

If the 19-20 revenues come in far lower than expected, NBA players won't receive the 10 percent salary held in escrow and distributed at the end of the season. Teams could also withhold additional salary in 20-21 in order to make up the difference for the revenue shortfall. 

"That's why the players are highly incentivized to work with the league to get as much as the season as possible. Even if it means a shortened, or very uncomfortable summer."

Brian Windhorst/ESPN


NBA Would Like To Teams To Play At Least 70 Games To Deliver On RSN Contracts

Mar 16, 2020 3:00 PM

The NBA is not sure what will happen over the coming weeks, but they would ideally like to play at least 70 regular season games in order to retain 100 percent of the revenue the league receives from their regional sports network partners that air games in local markets.

"What they would love to do is to get to 70 games," said Brian Windhorst. "And the reason is it's 70 is a key number is because that is what the deliverable is to the regional sports networks. They are promised 70 games.

"Now, just because a team like the Lakers, for example, to get to 70 games... they wouldn't necessarily be able to deliver on that because they've had a lot of national games, but getting to 70 would be helpful in retaining revenue because they wouldn't have to refund some to the local TV."

Windhorst suggests the NBA could play an abbreviated regular season when an all-clear to resume games is given that will help fulfill that requirement and also serve as a way for teams to ramp back up before the playoffs begin.

"That's the concept they're working through right now," added Windhorst. 

Teams have all played approximately 65 games.

Brian Windhorst/ESPN


NBA, NBPA Agree To Pause Drug Testing During COVID-19 Hiatus

Chris Haynes/Yahoo! Sports

NBA Preparing Financial Projections For Three Separate COVID-19 Scenarios

Adrian Wojnarowski/ESPN

NBPA Sends Memo To Players Detailing Doomsday Provision In CBA

Adrian Wojnarowski/ESPN

NBA Would Lose $500M In Ticket Revenue Alone If Season Canceled

Tom Haberstroh/NBC Sports

NBA Intends To Resume Season 'If And When It Becomes Safe For All Concerned'

RealGM Staff Report

NBA, NBPA Have Yet To Discuss Possible Reduction Of Player Salaries

Marc Stein, Sopan Deb, Scott Cacciola, Kevin Draper/New York Times

NBA Bracing For Hundreds Of Millions In Lost Revenue Due To Coronavirus

Zach Lowe, Adrian Wojnarowski/ESPN

NBPA Announces Search For Successor To Michele Roberts

RealGM Staff Report