NBA players’ union tells agents to expect player salary withholding, even some players paying refunds

Michelle Roberts and other executives from the National Basketball Players Association spent an hour on the phone with agents in a conference call on Tuesday.

What came out of that was not new information, but some clarity for agents, according to reports from Jabari Young at CNBC and Keith Pompey at the Philadelphia Inquirer.

Agents were told:

• No decision has been made on resuming the season or playoffs.

• There is no drop-dead date that decision has to be made. The NBA continues to wait for the coronavirus pandemic and response to play out, decisions will be based on what happens.

• They went over the pre-draft guidelines sent out by the league.

• Expect some player salary withholding, and for players who got most of their salary up front there could be refunds requested.

It’s the pay portion that most interested agents (and their clients). From Young at CNBC:

In an hour-long call on Tuesday afternoon, executives at the National Basketball Players Association (NBPA)... told agents that any compensation deal constructed by the NBPA and league owners will include refunds on all NBA contracts.

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.

LeBron James, Kevin Durant, and several other stars get a lot of their money up front. In the case of LeBron and Durant, both of whom are under contract for future seasons with their teams, a deal could be worked out to dock future pay rather than have the player write the team a check. The situation could be different for other players.

Under the current CBA, 10 percent of every player’s check is withheld and put into an escrow account. Then, at the end of the season, when the NBA audits its books, they figure out how much of that withheld money is to be returned to players to meet the CBA-mandated split of Basketball Related Income (the split for both sides can slide between 49 and 51 percent, depending upon if revenues met projections). Some years the players get all of the 10 percent back, some years much less.

What the owners are talking about now is taking a higher percentage of the checks for the escrow accounts, exactly what that percentage would be is under negotiation. From Pompey at the Inquirer:

The agents were told the NBA has yet to do an audit for this season due to the uncertainty involving the remainder of the campaign. As a result, the dollar amount of players’ portion from the league’s revenue sharing has yet to be determined, agents were told. Agents were also informed that next season’s salary cap won’t be determined until after the audit.

None of that is new information, and everything is in flux. The union just wanted to keep agents in the loop.

In the end, NBA players and teams are like the rest of the nation: Everyone is getting hit financially, everyone wants to get back to work, and everyone is waiting to see how the coronavirus pandemic plays out before making the next steps. And that will take time.