Economic Situation of the NBA

When the NBA decided to suspend the season on March 11 due to the coronavirus outbreak, many people became concerned about the arena staff workers, who are not getting paychecks from the NBA during the postponement.  

The league doesn’t have a set plan to pay for arena workers’ salaries. This led to owners and players pledging to help cover the salaries of the arena workers. Dallas Mavericks owner Mark Cuban was the first and others followed suit until all NBA-host arena workers were covered.  

“They get paid by the hour, and this was their source of income. So, we’ll do some things there,” Cuban said. “We may ask them to go do some volunteer work in exchange, but we’ve already started the process of having a program in place. I don’t have any details to give, but it’s certainly something that’s important to me.”

Cuban said that the way companies act in this crisis will define their brand for decades, and that people will find out how some businesses really operate.

After his announcement, many teams and players announced they would join Cuban in helping pay their arena workers, including Blake Griffin, Giannis Antetokounmpo and Zion Williamson.  

On March 26, the NBA announced that they would be reducing base salaries by 20 percent of approximately 100 of the league office’s top-earning executives, per Adrian Wojnarowski of ESPN.  

The NBA is reducing base salaries by 20 percent of approximately 100 of the league office’s top-earning executives around the world, sources tell ESPN.

— Adrian Wojnarowski (@wojespn) March 26, 2020

Players were not involved in this pay cut because teams do not have the right to enforce pay cuts on their players. 

“These are unprecedented times and, like other companies across all industries, we need to take short-term steps to deal with the harsh economic impact on our business and organization,” said NBA spokesman Mike Bass.  

Philadelphia 76ers owner Josh Harris had originally announced that he would be reducing staff pay by 20 percent, which outraged many, including 76ers part-owner Michael Rubin. Rubin was reportedly “upset and outraged,” according to Shams Charania of Stadium.

The backlash from fans and media made Harris change course. One day after announcing the cuts, he released a second statement, saying that the staff had convinced him that he’d made the wrong decision.  

Joel Embiid showed his support for the 76ers organization on Twitter: 

In these trying times, I’m proud of the Sixers organization for reversing course and “doing a 180”. Let’s focus on beating this Coronavirus now. Let’s be responsible and Trust the Process!!

— Joel “Do a 180” Embiid??? (@JoelEmbiid) March 24, 2020

The backlash towards Harris seemed to have sparked much of this narrative.

Other NBA owners are watching Sixers and weighing the PR fallout vs. desire to do the same with salary reductions — including some considering furloughs, staff cutbacks, etc. No owner wants to log into Twitter and see his net worth trending after announcing this kind of news.

— Adrian Wojnarowski (@wojespn) March 24, 2020

The criticism that Harris received before switching course shed light on how NBA owners are operating and will operate throughout this pandemic.