NEWSLETTER
The Larry H. Miller group is a relatively enormous collection of companies once owned by the now-deceased Larry H. Miller, featuring over 60 automative dealerships among other various industries and businesses. Tucked away inside that group is the Utah Jazz, who play their games in Miller’s hometown of Salt Lake City, Utah.
Unfortunately, due to COVID-19, the Larry H. Miller group is deploying cutbacks and layoffs across their suite of companies, and the Jazz are not immune:
As part of cutbacks within approximately 80 companies within the Larry H. Miller Group, there are layoffs underway with the Utah Jazz, organizaton tells ESPN. Sources say those cutbacks are limited to non-basketball staff and some employees are taking compensation reductions.
— Adrian Wojnarowski (@wojespn) April 3, 2020
They’re not the first professional sports team to tighten their belts in the face of this global pandemic, and they won’t be the last. Fair or not, a prolonged period of near-identical costs, but no additional revenue is going to be a shock to any business. You just hope – absent an unexpectedly quick return to action – that enough teams can weather the storm long enough to keep all of their workers employed and at full salary. And to that end, the league is trying to be proactive, albeit at the expense of the players.
Here’s the latest from Shams Charania:
Sources: The NBA is proposing to the NBPA that players take a 50 percent paycheck reduction beginning April 15. The NBPA has counter-proposed a 25 percent reduction of paychecks starting in mid-May.
— Shams Charania (@ShamsCharania) April 3, 2020
The NBA is proposing an enormous 50% salary cut to the Players Association, beginning in the next pay period (April 15th) and lasting, presumably, until games start back up. The Association, meanwhile, has countered with a cut half the size (25%) beginning a full month later. As you can imagine, that’s quite a bit of ground to bridge
But I’d say there are some good signs here that a deal gets done.
For one, the Association is pretty clearly not negotiating from a position of strength. If they were, they wouldn’t have opened up with something as dramatic as a 25% reduction, regardless of the start date. And, of course, that assumption is at least partially supported by the unfortunate realities of their own CBA: “The collective bargaining agreement maintains that players lose approximately 1% of salary per canceled game, based on a force majeure provision, which covers several catastrophic circumstances, including epidemics and pandemics.”
Basically, the league can unilaterally garnish wages based on this force majeure provision in the CBA, so their presence at the negotiating table – at all – seems to be mostly in good faith. And, indeed, the league has indicated a willingness to meet in the middle. Part of that may be altruistic, but part of that is certainly an attempt to avoid bad press. Either way, it’s a good result, so whatever. But in the face of that leverage, there’s really no doubt: the association will have to accept something eventually.
The other reason I can see a deal getting done is the various levers available to both sides. Basically, there’s a lot of room between 25-50% and there’s a lot of days between April 15th-May 15th. When there’s more than one variable to adjust, the flexibility increases significantly for both sides: We’ll accept a higher percentage, but at a later start date. We’ll start right away, but take less of a cut. We’ll start with a smaller cut, and adjust it as time goes by. Etc.Â
Something should get done.
And let’s not lose the forest for the trees here.
While I don’t necessarily believe billionaire owners should be saving money from the salaries of players … many of these players are millionaires, themselves. And considering my personal focus on the stadium and gameday employees, whose wages are far more important to them than they are to professional athletes and team owners, I’d say getting a deal done that can help the owners keep them paid in full is paramount. Obviously, that’s a bit of an assumption, but as we’ve seen with the Larry H. Miller group/Utah Jazz, cutbacks and layoffs are already happening.
Here’s to an uneventful, friendly round of negotiations and a quick deal to help out regular people as much as possible.
