If the coronavirus outbreak ultimately forces the National Basketball Association to cancel games, the league has terms in its labour agreement that could soften the blow for owners.
Under the force majeure clause in the contract, each player on the roster could forfeit about one per cent of his pay per game cancelled. The formula takes into account preseason, regular season and potential postseason play.
Some sporting events have already been lost to the outbreak. The BNP Paribas tennis tournament was cancelled Sunday after public health officials in California declared an emergency. Sports across Europe, including soccer matches that involved marquee teams and players, are being staged without fans. Italy has halted all events through April 3.
The clause in the NBA contract was negotiated after the September 11 attacks, and includes events like war, sabotage, terrorism, natural disasters, explosions, government orders and epidemics.
So the Los Angeles Lakers, for instance, would withhold about US$404,000 per cancelled game from LeBron James’s salary of about $37.4 million.
The NHL, which like the NBA is heading toward its playoffs, has a similar clause in its standard contract, though it doesn’t specify epidemics. It, too, calls for a prorated reduction in pay for “any condition arising from a state of war or other cause beyond the control of the league.”
Neither contract offers team owners any pay concessions if games are played without fans in the seats, resulting in revenue lost from concessions and parking.
The NBA’s salary cap, or the total amount teams can pay their players, is tied to revenue. A dip in revenue would mean a lower cap, which translates into lower player salaries.
The NBA regular season ends April 15, while the NHL’s ends April 4.