Top NBA executives are having their base salaries reduced by 20 per cent for the foreseeable future, a person with knowledge of the details said on Thursday.
The reductions affect the roughly 100 highest-earning executives, as the NBA joins the NHL and NASCAR in cutting salaries while competitions are on hold because of the coronavirus.
The cuts are effective immediately and affect NBA employees both inside the league headquarters in New York, and in global offices, the person told The Associated Press. The person was granted anonymity because the reductions were not announced publicly.
The reductions were first reported by ESPN.
Health benefits remain unaffected and there are no changes for the rest of the organisation, including support and administrative staff.
The NBA suspended its season on March 11 when Rudy Gobert of the Utah Jazz became the first player to test positive. The league is still discussing scenarios for resuming play once allowed.
It had already been a challenging season for the NBA financially, with a loss of revenue from China following Houston Rockets general manager Daryl Morey's tweet in support of Hong Kong anti-government protesters.
Games were taken off the air and relationships with business partners were damaged, with commissioner Adam Silver saying during last month's All-Star Game that the league could lose hundreds of millions of dollars.
Then came the coronavirus pandemic, which has caused a huge impact on sports leagues. The NHL is cutting salaries for league employees 25 per cent starting next month. NASCAR officers will have a 25 per cent reduction in salary, while all other employees will have their salary reduced by 20 per cent.
NBA executives have given up salary before, with former commissioner David Stern taking no pay during work stoppages in 1998 and 2011.
NBA teams will make their next scheduled salary payments to players April 1, but it remains unclear if they will get what would be their next check on April 15.
The league could say the pandemic falls under what is legally known as a Force Majeure Event the term for unforeseeable circumstances, such as war or an epidemic. Per the Collective Bargaining Agreement, when that clause is invoked, players could lose 1.08 per cent of their annual salary for each game missed.
That means Stephen Curry of the Golden State Warriors, the league's highest-paid player this season, could lose about $435,000 for each game that ultimately is not played.
A player who had a two-way contract converted to a regular NBA deal for this season would stand to lose about $9,700 per game.
However, none of that would become finalised until such time as the league officially cancels games. That has not yet occurred.