NBA: The current hiatus could impact future salary cap projections
In the midst of a regular-season hiatus, there’s a chance that the NBA could see impacts on the current salary cap projections.
The projected salary cap for the 2019-20 NBA campaign was $109.14 million. Now, with a suspended NBA season, and not knowing the contingency of its return, many franchises could experience a plummet in salary caps.
According to the NBA’s Collective Bargaining Agreement, there’s a limitation on the total amount of money that a franchise can spend on a player. This controls costs, and benefits parity. But with the pervasiveness of COVID-19, could teams see a dwindling effect in salary caps? And, will teams have enough to pay their players in the midst of a worldly atrocity? That’s still being ascertained by NBA executives and higher-ups.
ESPN’s Bobby Marks reported that there is a provision in the collective bargaining agreement that would allow for the league to not pay players for missed games during extreme events, including an epidemic.
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"According to the Collective Bargaining Agreement, Article XXXIX, section 5, players lose 1/92.6 of their salary for every game missed as a result of a Force Majeure Event (“FME”) — this refers to events or conditions that make it impossible for the NBA to perform its obligation under the CBA."
That agreement could ensure player compensation for missed games during the suspension. However, because of the discontinuity that’s been ordered by health officials, the NBA could potentially lose millions of dollars in basketball-related income (BRI). The projected 2020-21 salary cap of $116 million has dropped to $115 million. The uncertainty remains until the season resumes.
The NBA has to think about their options while circumventing the mandatory restrictions of (COVID-19) imposed by the Centers for Disease Control and Prevention. There’s no timetable as to when the season will resume. And, there might not be a postseason where a champion is crowned. Without playoffs, fans, merchandise, and regular-season games; how do you rectify the financial loss that could potentially take effect?
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That answer could take weeks, maybe months.
For more information about COVID-19, visit the CDC’s website or the website for your state’s Department of Health.