Monday night, Marc Stein reported that Sixers and Devils at-will employees making more than $50,000 were informed that they would be subject to “temporary salary reductions of up to 20 percent”, a policy that would start on April 15th and continue through June. Stein went on to say that members of the coaching staff and front office were also asked to participate, but cannot be forced to do so.
This caused a huge stir on social media and it’s all over the radio this morning, confirmed by the Sixers in a statement that reads like this:
“As we navigate this evolving COVID-19 environment, we are mindful of the long-term impact the suspension of live events and games will have on our organization and industry. To ensure we can continue to support and operate our businesses during these uncertain times without reducing our workforce, we are asking our full-time, salaried employees to temporarily reduce their pay by up to 20 percent and move to a four-day week. In addition to supporting our people, we are committed to playing an ongoing role in funding efforts to help the most impacted residents in our home cities. In the coming days, we will enter into additional partnerships in Philadelphia, Camden and Newark to assist our neighbors with food and resource distribution during this public health crisis.”
– Scott O’Neil, CEO of HBSE
Howard Eskin was on Twitter around midnight reporting that Michael Rubin was not happy with this strategy, pinning the decision primarily on Josh Harris and Scott O’Neil.
My thoughts, in no real order here:
I took a look at the Sixers’ front office directory and there are more than 150 people listed there. We have no idea who earns more than $50k and less than $50k, or what their specific earnings are, but if we did an exercise picking a totally arbitrary number, say 100 people making $100,000 a year, the math would look something like this:
A totally arbitrary number, but it’s not a lot. A drop in the bucket in the grand scheme of NBA finances.
Reducing pay and asking employees to furlough is not some new or crazy idea here, it just looks bad optically because sports franchises – particularly in the NBA – have been in boom times lately, with growth fueled by hefty TV contracts, globalization, increased ticket prices, and nascent sports betting industry. Sometimes you can’t put a price on goodwill. Or at least you shouldn’t try.
EDIT:
Here’s an article from NJ.Com quoting a Devils spokesman, who says the salary threshold is different –
All of Harris’ salaried, full-time employees making at least $100,000 have been notified that their pay will be temporarily cut beginning in April due to the NHL and NBA seasons being stopped because of the coronavirus pandemic. Also, those employees will move to four-day work weeks.
Employees making $125,000 or more may lose up to 20 percent of their pay.
A report by ESPN.com stated Harris employee making $50,000 or more would be affected, but a Devils’ spokesman contacted NJ Advance Media to report “the floor is now $100K, not $50K.”
“The floor is now $100k”