The NBA took a major financial hit as a result of the COVID-19 pandemic. Empty stadiums coupled with a major drop in ratings since the hiatus began in March have cost the NBA over a billion dollars in revenue.
As Adam Silver and league executives continue to work to recover from their losses, players stand to take a hit in their pay as well, with some projecting a 40% loss in salary.
Per the CBA, a portion of the players’ annual salary (usually 10%) is withheld to account for that year’s revenue — it’s called escrow. Under normal circumstances, the money is returned to the player if the league makes more as much revenue as was expected. If the revenue dips, however, that portion of the contract goes to the owners.
Usually, this isn’t a huge deal for either party, especially since the league does a good job hitting its mark financially.
But with the spread of COVID-19 and the financial implications involved, it will have on the 2020-21 season, the escrow number could grow by up to 40%. In the case of a guy like Steph Curry, who is projected to make over $40 million next season, he could lose over $17.2 million.
Example of players new salaries if games are reduced for next season and different escrow percentages. 🧐 pic.twitter.com/rDm1mYIPHO
— Hoop Central (@TheHoopCentral) October 30, 2020
Obviously, these players are still living well above their means, but it can’t be a good feeling to lose hundreds of thousands (or, in Steph’s case, millions) of dollars.
This recovery process isn’t just the NBA’s problem, it’s the players’ problem as well and you can bet all minds will be working towards a solution over these next few weeks.