Storyline: Salary Reductions

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“Not playing, it’s just an economic disaster, it really is,” Marks said. Here’s the Cliff’s Notes version, as gleaned from Marks’ expert accounting: The NBA placed 10 percent of its players’ total salaries — $380 million — into an escrow account, which they use at the end of the year to balance the revenue shares (players are entitled to 51%). That’s gone for the players. They’re not getting that back because the league has already lost too much money.

NBA teams will withhold more than $30 million from player paychecks on Friday, as players receive their first salary reduction since the league and union agreed to a plan to temporarily cut pay by 25%. But six of the NBA’s top 10 earners this season — LeBron James, Stephen Curry, John Wall, Blake Griffin, Kevin Durant and Paul George — have already been paid in full and will not see a pay decrease Friday. Their salary reductions will come out of their advances for the 2020-21 season on Oct. 1 or beginning with their Nov. 15 paychecks. Each player will essentially have an IOU per paycheck to his team ranging from $390,000 (James) to $420,000 (Curry) each time there is a scheduled 25% pay reduction. That amount will increase if games are eventually canceled because of the coronavirus pandemic.

Charania: The NBA regular season is approximately 80 percent complete, depending upon where each team is in its schedule. From what I’m told, the league was in line to generate nearly $9 billion in basketball-related income, and owners and team presidents estimate that canceling the rest of the season would result in $1-to-2 billion in losses. The NBA and its players agreed to reduce paychecks by 25 percent starting May 15, essentially serving as a reserve for if and when play resumes, and players can receive that amount back.

With the coronavirus pandemic keeping the sports industry on pause, players from across the National Basketball Association are urging their colleagues to use the downtime to examine finances and prepare for a possible change in the league’s revenue landscape. “Don’t look at this at this as a timeout,” Oklahoma City point guard Chris Paul told CNBC in an interview. “Look at this as an opportunity to get stronger in however way you see fit. If financial literacy is one of them, which I think that is for a lot of us, then dive in.”

As the coronavirus pandemic continues across the world, NBA owners are hoping for the best but preparing for the worst. The league plans to keep all options to resume the season available for the time being, sources told ESPN, but the financial realities of the situation demand near immediate action. That has become clear in talks between the NBA, the National Basketball Players Association and player agents, sources told ESPN, as the league tries to get its finances in order in the event the rest of the season must be canceled.

The league’s CBA includes a force majeure clause, enabling owners to cancel games and recover salary in the event of a pandemic. This clause also gives the league a 60-day window within which it can rip up the CBA entirely — effectively beginning a work stoppage. No one wants to do that. But it underscores the gravity of the situation. Still, in recent years the two sides have worked as well together as ever, and the CBA isn’t set to expire until 2024.

The agreement between owners and players in the last CBA calls for roughly splitting revenue 50/50 and also splitting the coming losses. So, the owners want to hold back a percentage of players’ checks going forward — both giving them extra money they can use now, if needed, and also to help balance the books in the event some, or all, of the remainder of the season is canceled. From an economic standpoint, both sides would prefer to limit the pain of the shutdown to only this season and not start next season with IOUs on the ledger. Setting the money aside now would help do that.

If the NBA cancels the season, players, especially those who received pay advances, could refund millions of dollars to league owners. Paul said players are “aware” of discussions regarding compensation, but said he doesn’t sense any panic. “As long as we have the conversations about it and try to make sure that guys are prepared as possible, I think we’ll be fine,” Paul said, adding that he’s in constant communication with players who call to seek additional information. “I’m happy guys want to know what’s going on, and guys want to be informed,” he said. “I can’t say it enough: I think we’ve got the best body of players in our league.”

The repayments will hit hardest for players who receive their paychecks on a six-month cycle, who receive more money per pay cycle but don’t get checks during the off-season. (Agents usually prefer 12-month payment plans to protect players from over-spending, and to keep them from struggling once the season ends and paychecks stop rolling in.) It will also hit hard for some players who received advance payments on their contracts. Teams often use advances to lure free agent players to sign deals sooner, at times offering full or partial payment of contracts upfront.

The Lakers plan to ask top-level executives to voluntarily defer 20% of their pay as the team navigates its finances during the COVID-19 pandemic, according to people familiar with the situation. The requests have not been made, but will be done in hopes of avoiding cuts that impact lower level staff members. Once the deferments begin, they will last until the first regular season game of the 2020-21 season or mid-December, whichever comes sooner.

Families who live paycheck to paycheck are now scrambling to pay bills with no idea when they’ll be able to work again. It’s also impacting the finances of professional athletes at all levels. For those at the lower salary level, it is making a larger impact. And many are living close to a paycheck-to-paycheck lifestyle, Portland Trail Blazers shooting guard CJ McCollum told former NBA player Jay Williams on “The Boardroom.” “I would say out of 450 players … 150 probably are living paycheck to paycheck,” McCollum said.

The NBA has no plans to announce the cancellation of games in the immediate future, sources said. The league’s plan has been to continue working on a number of contingencies for returns from a hiatus that started on March 11, based upon how many days the league has to work with to salvage a season, sources said. The NBA has committed to paying full salaries on April 1, but the league and union are discussing ways for an orderly redistribution of money based on the number of regular-season games that could be lost in the 2019-2020 season.

On a recent episode of The Lake Lake Show podcast, Eric Pincus of Bleacher Report suggested that “it could be three or four years until the league is back in balance”. Pincus also went into depth on how the NBA will return. Where he stated that the league are considering canceling games. Which will create financial implications for players, even more so the high-end stars like LeBron James. “Players typically get paid on the 1st and 15th of every month and the 1st would be a full check. But the league hasn’t committed to the 15th… it means they’re considering canceling games. Because by the rules, they can’t dock players for games that are rescheduled. They can only dock from players for games that are canceled.”

The NBA’s collective bargaining agreement allows the league to reduce player salaries by 1/92.6th for each game missed because of, among other things, epidemics: “We’re not promised a check past the first of April I believe,” Danny Green said on ESPN’s First Take. “This is very different than the lockout. We were able to prepare for the lockout, know that there wasn’t going to be basketball for some time and save up. This time, guys were not prepared for this, this happened out of nowhere. “So they’ve gotta be smart with these last two checks that we’ve received,” the Lakers guard continued. “We may be getting past that, we don’t know yet. If we don’t play the rest of the season, it will affect our check and playoffs as well. We have to be very smart with our money.”

Uncertainty about NBA players salaries

The NBA plans to deliver players full salaries due on April 1, but left open the possibility of recouping future salaries for canceled games on April 15, according to a league memo shared with teams Friday. As the coronavirus pandemic paralyzes the NBA and nation, the canceled games and loss of revenue are causing the NBA to leave itself financial flexibility based on the force majeure provision in the collective bargaining agreement.
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August 4, 2020 | 8:50 am EDT Update
Spoelstra is almost afraid to say it out loud, but he prefers the polo look. “Pat would be shocked,” Spoelstra said. “There is so much less to think about. I feel more mobile. The thing I hate most about suits is wearing dress shoes.” Several head coaches echoed Spoelstra’s remark about how the casual look simplifies sartorial decision-making — and packing, a constant headache during normal times.
Frank Vogel, head coach of the Lakers, followed the same path out of the video room as Spoelstra. Before his first game as a graduate assistant under Rick Pitino at the University of Kentucky, Vogel was scribbling scouting tips on the white board when Pitino approached. “You’re not wearing that, are you?” Pitino asked him. Vogel was wearing his only suit — a graduation gift from his parents. He told Pitino he was going to wear it for each game, and change out shirts and ties to avoid detection. Pitino would not have it. He invited Vogel to his house that night, and gave him 15 suits — Armanis and Brionis — plus the number for his tailor, Vogel recalled.
The coaches’ association has taken periodic polls, mostly recently two seasons ago, and found “overwhelming support” for suits over polos, Carlisle said. Carlisle spent two years as an assistant with the New Jersey Nets under Chuck Daly, perhaps the most fashion-forward head coach in NBA history. Daly had a sponsorship deal with Hugo Boss. On one road trip, he invited Carlisle to a Hugo Boss outlet for a shopping spree. “It was the nicest stuff I had ever had to that point,” Carlisle said.
While not typically a critique levied on the New Orleans Pelicans, a recent story from The Athletic’s Seth Partnow revealed a potential glaring weakness for the franchise. After The Athletic did similar reports for NHL and NFL franchises, Partnow took a look at the size of the analytics departments for each NBA franchise. While Partnow admitted to it likely being an incomplete sample size, the Pelicans not only had the smallest analytics department, they had just one full-time staffer in the department.
Storyline: Pelicans Front Office
August 4, 2020 | 3:02 am EDT Update
He did show off more of a willingness to shoot in the scrimmage games as he was able to knock one down in their scrimmage opener against the Memphis Grizzlies. In fact, he took two 3-pointers in that game. The thing is, he hasn’t taken any shots from deep since then. “I went back and studied the game (against the Indiana Pacers),” said coach Brett Brown. “There was one time where I thought ‘Yep, you could’ve fired a perimeter shot’ and it wasn’t even really a three as I remember it. It’s not on my mind like it is everybody else’s. I think he has chewed up space when people sag in. He’s chewed up space and driven in.”
“I do concede when it’s blatantly obvious and he’s spaced out, for instance, we’re posting Joel or Al Horford as an example, and Jo ends up down in that low zone, we can’t have four people on the perimeter,” said Brown. “So there are times where he could grab a corner, sometimes no, sometimes he can be behind a backboard and playing in that dunker spot as I call it, but it’s old news to me, to be truthful. I feel like his head is in a good place to shoot it and produce, but I don’t see it as trepidation or lack of confidence. I don’t see it like that.”
According to ESPN’s Brian Windhorst, those close to the situation believe the Duke product is clearly not in the right state to play in the restart of the 2019-20 NBA season: “When you watch him play, he clearly is not in condition to compete at the highest level,” said Windhorst on The Hoop Collective podcast. “As I watched him play two games, I don’t actually think they should have played him at all the way he’s playing. In fact, I talked to a scout who said to me he shouldn’t be out there right in the condition he’s in. He said to me he’s moving worse than he did in Summer League last summer when he got hurt in his first or second game.
One said that the compact comeback could be a true equalizer. Example: Some league insiders see Portland as a threat to upset the Lakers in a first-round series after welcoming back its previously ailing frontcourt pair of Jusuf Nurkic and Zach Collins. The other executive, by contrast, described the eight seeding games all teams must play before the postseason as a lengthy runway that will afford the Lakers, the Bucks and the Clippers time to regain their March form.

Chris Smith returning to UCLA

The Pac-12 Conference’s most improved player could become its most valuable. Chris Smith is returning to UCLA for his senior season, putting off the NBA for one more chance to continue his dramatic upward college trajectory. Sean Smith, Chris’ father, made the announcement Monday. “Chris is returning to school due to too much uncertainty on both sides of the coin,” said Sean Smith, alluding to the COVID-19 pandemic that led to the cancellation of workouts for NBA prospects and a delayed draft. “He’ll finish his degree and work to improve in the areas he needs to improve on.”
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Gonzaga forward Corey Kispert is withdrawing his name from the NBA draft and will return to the Bulldogs for his senior season, putting them in contention to be the preseason No. 1 team in the country. Kispert was a potential second-round pick, ranking No. 47 overall and No. 6 among small forwards in ESPN’s NBA draft rankings. But he, like teammate Joel Ayayi last week, is heading back to Spokane, Washington, to compete for a national championship.
The NBA on Monday announced the launch of an alternate telecast centered on sports betting for select games, the latest broadcast enhancement for the NBA restart. NBABet Stream will feature overlays displaying point spreads and odds, as well as betting analysis, beginning with the Oklahoma City Thunder-Denver Nuggets game Monday. The NBABet Stream broadcast is available on NBA League Pass, NBA TV via the NBA App and NBA.com through the league’s direct-to-consumer subscription product.
As much as he wanted to be with his New Orleans Pelicans teammates, was going back to basketball worth it under those circumstances? Was it wise to spend months away from his family — Lauren pregnant with their second child — during a worsening pandemic? His actions in the past proved that basketball isn’t everything to him, his family is. One night the answer came to them. When it did, it felt so simple. He would play and donate the remainder of his salary this season, about $5 million, to businesses, nonprofits and higher learning institutions that serve the Black community and communities of color.
“There needed to be a reason why I felt it was worth leaving my family and my pregnant wife to go into this bubble,” Jrue said. “I think that gave me a great reason to go back and play, to feel like I’m doing something for my people and this culture. Donating the rest of my contract was kind of the ultimate decision for why I was going.” The newly created Jrue and Lauren Holiday Fund has committed to donate $1.5 million to organizations and businesses in New Orleans, $1 million in Indianapolis where Lauren is from, and $1.5 million in Los Angeles and Compton. An additional $1 million will be given to Black-owned small businesses in 10 U.S. cities and $500,000 will go to historically Black colleges and universities.
August 3, 2020 | 9:38 pm EDT Update
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“So on that play, at replay, Olynyk, we judged that he took an aggressive swipe and he made some contact into the facial area of Kyle Lowry,” Guthrie said in the pool report. “At replay, in my judgement, I felt like that did meet the criteria for a flagrant foul. After reviewing that more postgame, and thinking about it a little bit more, to me, it now is more of a natural basketball play going for the ball and that the contact really did not rise to the criteria of a flagrant foul. In both of these instances and cases, though, as always, I know that the league office will review them as they always do all flagrant fouls and they’ll make their determinations at the end of the day on what they think they ended up, in their judgement, that it was. But we had our judgments in the live game.”
August 3, 2020 | 7:05 pm EDT Update
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