NBA's "Force Majeure" Right Examined As Stoppage Continues
The NBA "clearly isn't going to let go" of the remainder of its season unless it has no choice, but the league has not yet determined "what happens if the season is ultimately canceled," according to Keith Smith of YAHOO SPORTS. In that case, the NBA has the "right to enact 'force majeure,' which could involve anything from lower payments to changed pay schedules to a full opt-out of the CBA." The league can "enact force majeure if they feel the season is lost" due to the coronavirus outbreak, and if the league does so, the players "would lose 1/96.2 of their individual salary for each regular season and playoff game missed." That is "across the board for every player." In addition, the clause also "allows the NBA to terminate the CBA," but that is the "last and least likely option for the league." Conservative estimates are that the NBA will lose $500M if games are "canceled or played without fans present" (SPORTS.YAHOO.com, 3/17).
PLAYERS' PERSPECTIVE: NBPA Exec Dir Michele Roberts said for the players, the revenue consequences of force majeure are "significant." Roberts: "Sure, there is language that allows the league to enforce what they perceive to be a 'force majeure' and that would have an impact on compensation for players going forward. But if it happens, there would be a recognition the league is prepared to lose tens of millions of dollars. If we can't play games or we can't have our playoffs, we're going to have an economic hit." Roberts, on conversations with the league being more about how to salvage the season than addressing force majeure, said, "We want to play games and we want to do it in a way that's safe. ... It's very difficult to say by 'X date,' we're going to resume the games. That would be foolish. But we're not throwing in the towel" (USA TODAY, 3/18).
RAISING CREDIT LINE: ESPN's Adrian Wojnarowski cited sources as saying that the NBA is planning to raise its credit line by $550M to now $1.2B, which would "aid the league in handling its expenses through what is expected to be an extended shutdown." The league "discussed the plan on a call" with its BOG yesterday, a meeting that included former Surgeon General Vivek Murthy "delivering a grim forecast for the pandemic's potential impact" on the U.S. Sources said that this "further convinced owners that there could be no resumption before June -- if that is even possible" (ESPN.com, 3/17). Wojnarowski said the move gives the NBA a "chance to have some more cash flow during this extended period without basketball." He added, "The league is hunkering down for what is going to be a very long time without the game" ("Get Up," ESPN, 3/18).
SOON TO GO? In N.Y., Marc Berman cites sources as saying that next on the "coronavirus chopping block could well be the NBA Draft Lottery and Draft Combine." The Lottery is scheduled for May 19 in Chicago, and was to be followed by the Combine in the same city May 21-24 (N.Y. POST, 3/18).