Amid postponements NBA awaits vaccine, mulls mandate

Editor’s Update: Adam Silver spoke about the NBA’s vaccine policy today (1/19/21) on Sportico’s NBA Valuations Panel. Silver highlighted the role that players might have in promoting vaccine efficacy to skeptical populations. Specifically, members of the African American community may understandably mistrust the vaccine given the racist history of vaccination in this country. Silver also reiterated that the league would wait until public health officials agree it’s the right time to vaccinate players.

It is not uncommon for a team’s roster to fluctuate in size as a result of players’ injuries or other personal reasons. However, nowadays rosters seem to be thinning faster due to contact tracing and other COVID-19 health and safety protocols. Last Sunday’s game between the Boston Celtics and Miami Heat was postponed after Miami fell short of the eight-player minimum due to COVID-19 contact-tracing concerns. Per ESPN, Miami guard Avery Bradley was out due to health and safety protocols. Forward Kelly Olynyk, guard Goran Dragic, and center Meyers Leonard were also among the players potentially unable to play due to injury. The Celtics, however, do not have a brimming roster to boast of as of now either. Last week, seven players on the Boston team were out due to health and safety protocols. In fact, Jason Tatum has recently tested positive and is undergoing a 10-14 day quarantine. The Philadelphia 76ers are also currently missing players as Seth Curry tested positive earlier last week, which meant that four of his teammates had to also go into quarantine per the league’s health and safety protocol.  

Teams appear to be short-handed at this point in the season; however, according to ESPN’s Wojnarowski, the NBA has no plans to pause the season. The 2020-21 NBA Health and Safety protocol is reported to be extensive at 158 pages; however, it does not list criteria for the season to be suspended. Monitoring the virus and preventing outbreaks is significantly more challenging outside of last season’s Orlando bubble; however, teams have avoided a single large outbreak. Since last week, twelve more games have been postponed, bringing the total to fourteen. The thing that seems to be counteracting the considerable inconveniences, such as precarious competitive balance across teams and continually disrupted chemistry, is the collective sense of hope for a vaccine and a less volatile latter half of the season. The league’s health safety protocol states, “Once a vaccine is available, the league and the National Basketball Players Association will negotiate whether players, coaches, and staff will be required to receive it. If it is not required, adjustments to the safety provisions — such as requiring more masking or testing of those who choose not to receive the vaccination — might be implemented.” 

Decisions surrounding the distribution of the vaccine will be interesting to observe across professional sports leagues given that considerable skepticism already seems to exist. For example, Utah Jazz forward Derrick Favors told USA Today, “I’m a guy that don’t really take any vaccines. I try to stay away from a lot of medicine.”  Moreover, Denver Nuggets forward Michael Porter Jr. raised some eyebrows over the summer when he suggested that coronavirus was “being used for a bigger agenda” and revealed that he had never been vaccinated. Porter contracted the virus earlier in January and is currently on the list of players sidelined for the duration of their quarantine. Undoubtedly, a mandatory vaccine (assuming it’s ethical, safe, and effective) of all players, coaches, and staff could very much ease the season’s flow and ensure a quicker return to normal. So, can the NBA mandate a vaccine? Take the flu vaccine, for example. The league “strongly recommends” it, and all players and their households receive the option to take the vaccine. In the case of denial, the respective team has the right to provide the player with an educational course on the vaccine’s benefits. However, in 2021, the world is dealing with much more than just the annual flu, so how will the process be handled?

While the NBA has avoided comment on how it will handle the issue so far, history may provide insight on the legality of a potential mandate. A most relevant landmark case is Jacobson v. Massachusetts; a 7-2 decision held that Cambridge, Massachusetts could fine residents who refused to receive smallpox injections during the 1905 epidemic. Jacobson’s side argued that introducing smallpox to a healthy functioning immune system is a violation of the 14th Amendment, specifically of life and liberty. In response, the court reasoned that under the 10th Amendment, states have the authority to enact reasonable legislative action to protect public health. While this decision is over one hundred years old, there is little precedent on vaccine mandates and the NBA may look to this holding as a means to justify enforcement.  However, this determination seemed to grant power to respective states and it is uncertain how it can be applied in the context of an organization. Interestingly, although personal and ethical views are usually insufficient, “sincerely held religious belief” may qualify an exemption from a mandatory vaccination policy under Title VII. However, the current pandemic is largely uncharted territory. The consequences of a player or a coach denying the vaccine may be significant. In light of this, the conversation surrounding risk-management is likely to develop further, and shift legal determinations. Additional federal and state guidelines will likely also inform league decisions surrounding vaccination protocols. For now, Adam Silver has commented that the NBA will not “jump the line in any form whatsoever” in terms of receiving the vaccine.

Pricey Pandemic Insurance Policy Sets Wimbledon Up For $141 Million Payout

While the rest of the sports world is sustaining huge losses, one organization is well positioned to navigate through the global recession. The AELTC (All English Lawn Tennis & Croquet Club) is the association responsible for hosting and operating the prestigious Wimbledon Championships that were set to take place this June. And while COVID-19 is causing most leagues to scramble to find any salvageable solutions, Wimbledon has had the “luxury” of simply cancelling the tournament, and recouping $141 million in the process.

Despite the fact that Wimbledon was projected to generate more than $300 million in revenue this year, the roughly $150 million loss they will see as a result of the pandemic pales in comparison to those of other major leagues and events. Forbes estimated that the NCAA will see damages of $1 billion, the NBA – $1.2 billion, and the MLB (whose season had not yet even started) – as much as $2 billion. These numbers are all based around an assumption that the leagues will resume sometime over the summer, but given the uncertainty it is possible — even likely — that the true figures will be much higher.

So, how exactly did Wimbledon “ace” its handling of the coronavirus chaos? The story reportedly traces back to 2003, the year in which SARS rattled the world and brought pandemic preparedness to the forefront of international dialogue. Though SARS didn’t uproot the sports world like COVID-19 is doing now, the AELTC understood the potential of a global spread and updated its insurance policy to cover an infectious disease clause. That amendment didn’t come cheap however; it cost the AELTC a whopping $2 million per year to protect its premier event from what most others considered a once-in-a-lifetime fluke that wouldn’t repeat itself.

Until it did.

17 years and $34 million later, AELTC is seeing the worst case scenario (in the sports world, at least) unfold, but its directors can rest easy knowing Wimbledon is covered and well-poised for a 2021 return. The policy is exactly why AELTC didn’t need to postpone or reschedule Wimbledon, in fact, the London-based club reportedly had to cancel by a certain date in order to recoup the insurance premium.

Meanwhile, other leagues and major events are trying to brainstorm any possibility to soften the financial blow each one is facing. Even if the NBA returns late in the summer and skips straight to playoffs, or the MLB’s “quarantine league” comes to fruition, these events will undoubtedly be held without crowds and the leagues will still suffer substantially this year. So, a question many are likely wondering is: why didn’t these organizations have any protections on their events like the AELTC did with Wimbledon? The short answer is that they actually did, just to a limited extent.

Most contracts include force majeure clauses, which excuses certain contractual obligations due to a “superior force”. These forces consist of circumstances that are largely out of both parties’ control such as natural disasters, acts of terrorism or say, a global pandemic like the novel coronavirus. However, while sporting organizations can invoke the force majeure clause, the primary benefit in doing so would derive from these organizations’ ability to withhold pay for missed games.

Accordingly, this contract language (if enforced) only really protects these companies from the costs to their thousands of employees, rather than safeguarding them from losses to the revenue, highlighting the true value of AELTC’s insurance. However, at this point, the money these leagues could save by invoking force majeure is far outweighed by the revenue that any semblance of a season would drive, even if it means fan-less events. The reality is, if leagues are going to see any sort of monetary light at the end of this coronavirus tunnel, the government will likely be the one shining it.

In a summary published by lawyers from White & Case, they believe that governments will be willing to provide financial support to prop up the sports industry as it looks to restart itself. Given both the economic and social impact of sports, the government has a vested interest in doing so, however the report warns to expect some form of lengthy litigation in leagues’ pursuit of federal compensation. In any event, whatever kickback AELTC receives down the line will be icing on Wimbledon’s well-insured cake.

COVID-19’s Impact on Sports Broadcasting and Salaries

It’s been just over two weeks since the last live broadcast of a professional sporting event and the effects are rippling through the world of sports business. COVID-19’s arrival and subsequent spread across the United States prompted the suspensions of the NBA’s, NHL’s and XFL’s seasons, as well as the delay to the start of the MLB season and countless other disruptions throughout sports. Much like almost every other area of the U.S. economy, sports have taken an enormous hit and while fans and organizations alike are eager to see their favorite athletes return to competition, it is uncertain as to when they will be able to safely, and lucratively, do so.

Between the timing of COVID-19’s lockdown on U.S. sporting events and the ambiguous 2-to-6 month timeframe medical experts are forecasting for a full recovery, each league has tailored its own plan in response to sudden halt of play. Below is a quick summary of just a few of the major sporting organizations’ financial and/or scheduling proposals.

NBA: After announcing that players would receive full salaries on the April 1st due date, the NBA announced earlier this week that it would be reducing the pay of 100 of the leagues’ highest-paid executives by 20% for the duration of the coronavirus crisis. Moreover, the league has extended its credit limit to $1.2 billion for added flexibility in covering its coming expenses. While there is no set plan on when play for the current season will resume, league commissioner Adam Silver has insisted that regardless of timeline, the league would prefer to salvage some portion of the season and crown a champion for the 2019-2020 season. Among the avalanche of proposals of how to “save the season,” Atlanta Hawks CEO Steve Koonin, recommended permanently pushing back the start date of the NBA season to December and concluding with the NBA Finals in late summer, given the current season would optimistically end in August or September. Moreover, Brooklyn Nets point guard Spencer Dinwiddie tweeted out an interesting idea in which the NBA season would resume with a March-Madness style tournament involving all 30 teams.

MLB: The MLB reported this week that it had reached an agreement with the MLBPA on a loose framework of financial and scheduling logistics regarding the upcoming season. Perhaps the most shocking news was the revelation that IF the season is cancelled, players would receive the same amount of service time they received the season prior. This means that players with a year remaining on their contract, such as recently-acquired outfielder Mookie Betts, will hit free agency in 2021 without ever playing a game for the Los Angeles Dodgers who traded valuable assets for his services this year. Also, in the event that the season is cancelled, the MLB made it clear that players would not be able to sue for full salaries, however all players will be receiving a $170 million advance over the next two months. Despite these insurance measures, Commissioner Rob Manfred is hopeful that the MLB resumes play this summer, while he acknowledges that a full 162-game season is likely off the table. The reported contingency plan includes 1) beginning the season once there are no bans on mass gatherings that limit the ability to play in front of fans, 2) no travel restrictions, 3) medical experts determine that games will not pose a risk to the health of teams and fans. Moreover, if/when play resumes, the MLB noted that doubleheaders, a 14-team playoff format, and a neutral, warm-weather location for a November/December World Series are all in serious consideration.

NHL: While the NBA and MLB have quickly pivoted to rescuing their seasons, the NHL has not matched their optimism nor their speed in announcing contingency options. The league has not yet united around a financial agenda, yet both the Dallas Stars President and General Manager have taken voluntary 50% pay cuts. Meanwhile, the Boston Bruins and Montreal Canadiens announced layoffs as their own responses. While many see the cancellation of the rest of the season as the most realistic scenario, others have proposed a timeline similar to that of the NBA with the season picking back up in July/August and ending in August/September. Most notably, star players Alex Ovechkin and Sidney Crosby said that they would be “OK” with skipping straight to the playoffs if and when the season is able to resume, however they acknowledged the question of fair play and keeping the integrity of the sport.

XFL: I really feel for the XFL here. Riding a strong start in its inaugural season, the decision to not only suspend but cancel its remainder must have been decisively more difficult than those of other sporting leagues. The XFL was exactly at the midway point of its season having played through five weeks of its ten week schedule (excluding a two-week playoff in April). Though the eight-team football league had been dealing with declining ratings following its initial excitement, it immediately committed to paying its players’ full salaries and returning refunds or credit to its ticket holders. The XFL also announced that it will be back for a 2021 season and has great reason to do so. Ten former XFL players have already signed contracts with NFL teams for the upcoming season with more likely to follow in the coming days.

MLS: Major League Soccer was in the midst of only the second week of its season when it made the decision to postpone its season for 30 days. As updates of the spread across the U.S. have come in, the Commissioner Don Garber pushed the deadline back to May 10th, but will likely have to do so again under the current climate. Garber, however, is adamant that when soccer returns, the MLS will play a full season’s worth of games even if it means extending the calendar of the season. While there has not been an unanimous response to salary fulfillment across the MLS, one team came under scrutiny for sending an email to its game day staff suggesting they file for unemployment while naming corporate partners who might be hiring.

BIG3…?: I was hesitant to include the Big3 in this rundown of major sporting organizations, however its response to the coronavirus crisis may just elevate its status to that of the leagues listed above. For those who are not familiar with the Big3, it is a 3-on-3 basketball league composed of former NBA and college players such as Amar’e Stoudemire and Joe Johnson. The games are played half-court style with rule oddities that differentiate it from the NBA such as the addition of a 4-point shot and first team to score 60 points as the winner. As for the coronavirus’ impact on the BIG3, originally games were supposed to be played around the country in Memphis, New York and more. However, BIG3 co-founder Ice Cube announced yesterday that the organization will be partnering with the producers of reality TV show “Big Brother” in efforts to air a basketball tournament-reality TV show hybrid to fill the significant void in the sports world. It was reported that the tournament will feature 16-22 players, who be previously tested for COVID-19 and if selected, will be quarantined in a house together for the duration of the season with anyone who breaks quarantine being kicked from the house. It was also reported that some of those selected may even in former top women’s basketball players.

The idea is that the three-person teams would shuffle teams each round and once an individual player accumulates three losses they would be eliminated from contention. Then, the final three players would win cash prizes with the top prize being at least seven figures. The goal is to air the tournament starting in May and given the current sport’s climate, or lack thereof, the BIG3 will surely see a large opportunity to scoop up hungry sports fans across the country craving any form of live competition. There is no word yet on whether or not these fans will be able to bet on these contests, however given the nationwide craving to slowly restart the economy, it wouldn’t a surprise to see Las Vegas announce the lines once the details of the BIG3’s proposal are ironed out. In any event, every other aforementioned league is looking at June start/resume dates in their most optimistic scenarios, so at the very least the BIG3 has at least a month to show us all what it has to offer, and hopefully hold us sports fans over until our favorite teams are back in action.