NBA and players association agree to 25 percent pay cuts starting May 15

NBA players will start making less money in a month.

The NBA and the NBA Players Association announced Friday afternoon that they have reached an agreement on 25 percent pay cuts for all players starting May 15 in the event the league has to cancel regular season and/or playoff games.

“Through this agreement, and in order to provide players with a more gradual salary reduction schedule, partial reductions of 25 percent will begin with the players’ twice-a-month payment due on May 15,” a statement said.

“The CBA stipulates that the compensation of all NBA roster players shall be reduced in the event of a ‘force majeure’ event, such as an epidemic or government order, in accordance with a formula based on the number of games missed.”

Pay cuts for NBA players have been a topic for the league as the coronavirus pandemic shut basketball down on the night of March 11. There is currently no timetable for the season to resume in any fashion or guarantee the NBA will be able to hold a playoff of any kind to determine a champion. Per ESPN, the agreement is expected to be ratified Friday afternoon.

The Athletic reported earlier in April that the NBA was seeking a 50 percent pay reduction for players. If that was the starting point, halfway seems like a decent compromise on the surface. Most teams have played 64 or 65 of the 82 games on the schedule.

The force majeure clause

A force majeure clause is commonplace in many contracts. In this case, the NBA and its teams could enact the provision and choose not to pay the players based on how many games have been canceled. The NBA’s clause in its collective bargaining agreement with the players includes the following:

“Wars or war-like action ... sabotage, terrorism or threats of sabotage or terrorism; explosions; epidemics; weather or natural disasters, including, but not limited to, fires, floods, droughts, hurricanes, tornados, storms or earthquakes; and any governmental order or action [civil or military].”

An agreement on salary reductions for the current season could also pave the way for discussions regarding the salary cap in future years. The NBA’s cap is determined via a formula that includes league revenues and the pandemic has significantly impacted league revenue this spring. If the salary cap has to go down in future years it sure seems that teams and players would prefer it to go down gradually over a few seasons vs. a large decrease in one season.

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Nick Bromberg is a writer for Yahoo Sports.

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