For the second time, the NBA and National Basketball Players Association have agreed to reject a 60-day window that preserves each party’s rights to terminate the collective bargaining agreement during the coronavirus pandemic, sources told ESPN. Tuesday.
The NBA and NBPA have agreed a deadline of October 15 to complete talks on CBA changes for the 2020-21 season, a date that ensures uninterrupted completion of the NBA playoffs and allows more time for the league and union to improve- informed decisions based on the progress of the virus and the forecast of the championship revenue for the next season.
In May, the NBA and NBPA extended the original negotiation deadline to September 10, sources said.
“The extension is an easy call,” NBPA executive director Michele Roberts told ESPN on Tuesday. “If everyone continues to be well intentioned about how to deal with the economic effects of this virus, we will only make the necessary adjustments and there will be no need to stop CBA at all.”
The NBA is moving to reject this year’s draft, scheduled for October 16, along with the free agency’s early October 18, partly due to the strong likelihood that the provisional opening of the 2020-21 season will be delayed since December. 1, sources told ESPN.
The board of governors on Friday called with the league office, discussions on starting dates for the next season ran from December to March, the sources said. There is still a consensus in hopes that the season could start in late December or January, sources told ESPN.
The NBA and NBPA can now negotiate the zeroing of the 2020-21 salary cap and luxury tax numbers based on this season’s audits and next year’s projections, allowing teams, agents and players to have the right time to prepare. the financial realities of the pandemic’s impact on the league.
The league and union’s biggest motivating force to delay the start of next season comes with the hope that teams can finally find ways to get fans back safely to arenas for games, an integral part of the league’s revenue stream. . Commissioner Adam Silver says game night revenue accounts for around 40% of the league’s revenue.
Despite current and projected revenue losses impacting the union’s 51-49 split of revenue with the league, there is optimism that the parties can reach agreements on temporary changes to the CBA – including salary cap and tax thresholds. on luxury – which would preclude the need to implement the nuclear option of ending CBA.
The demise of the CBA would largely be a mechanism to abolish the current financial structure and would almost certainly lead to a significant disruption to the game. The NBA’s current CBA spans the entire 2023-24 season, with an opt-out mortgage available after the 2022-23 season.
In a normal year, the NBA and NBPA calculate the new salary cap between the end of the project and the start of the free agency. This year, the league is addressing the teams’ urgency to have those new luxury roof and tax figures ahead of draft because it greatly affects how teams approach decisions, including trading and buying and selling choices.
The financial realities of fanless craters championship revenues in arenas would have a dramatic impact on teams, especially smaller market franchises that depend on takings and revenue sharing from large markets like Los Angeles, New York and Golden State. In a scenario where gate entrances are gone or severely limited, big market teams will be limited in the money they can share with those in smaller cities.
Among the worst-case scenarios, some small-market teams tell ESPN they fear they could lose up to $ 20 million in revenue sharing next season. These kinds of projections affect competitive balance and are the patterns the NBA and NBPA would like to evade in these CBA discussions.
For example, the CBA has an expected 2020-21 salary cap of $ 115 million, with a luxury tax threshold of $ 139 million. Due to the loss of revenue streams, some teams worry that the cap and taxes could drop from $ 25 million to $ 30 million. Without the NBA and NBPA negotiating a new limit mechanism, the league could face 25 of its 30 teams stuck in luxury tax payments on the basis of expected paychecks – something that would cool free will and limit. the ability of many organizations to operate in a normal way in the market.
For example, the planned $ 45 million tax penalty by the Golden State Warriors would rise to $ 160 million before the start of free will.
“This CBA was not built for an extensive pandemic,” Silver told the NBPA subscription, according to audio obtained by ESPN in May. “There is no mechanism that works to set the limit correctly when you have so much uncertainty, when our revenue could be $ 10 billion or it could be $ 6 billion. Or less.”
ESPN’s Bobby Marks contributed to this report.
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