Philadelphia 76ers and New Jersey Devils owner Josh Harris changed course on a plan for a 20% reduction on employee salaries, calling it a mistake and apologizing to staff and fans.
In the face of a tenacious public backlash -- and pushback within his own organizations -- ownership gathered on a conference call Tuesday afternoon and relented on a plan to require at-will employees making more than $50,000 a year to take pay reductions.
Harris had made the decision based on current and projected financial losses of the professional sports shutdowns that impacted the Sixers and Devils in the wake of the coronavirus pandemic. Harris had framed the pay cut as a way to avoid layoffs and keep full benefits for the company's 1,500 employees.
"Our commitment has been to do our best to keep all of our employees working through this very difficult situation," Harris said in a statement. "... After listening to our staff and players, it's clear that was the wrong decision. We have reversed it and will be paying these employees their full salaries. This is an extraordinary time in our world -- unlike any most of us have ever lived through before -- and ordinary business decisions are not enough to meet the moment. To our staff and fans, I apologize for getting this wrong."
The Sixers couldn't require contract workers to agree to the pay cut, and had given them a Thursday deadline to volunteer, sources said. Members of the Sixers' front office and coaching staff were angry with the directive, and largely unwilling to accept the reduction, sources said. With uncertainty surrounding their future employment with the Sixers, much of it possibly based on the team's postseason performance if and when the season resumes, there was confusion about why it would make sense for them to agree to the reductions, sources said.
The 76ers' Joel Embiid, who told ESPN's Ramona Shelburne on Tuesday that he would pledge $500,000 for coronavirus medical relief, tweeted his approval of ownership's reversal.
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
Owners and players share in the financial success and downturns of revenue, but contracts are safeguards for employees who don't get to share in the financial upside of plentiful times.
Several Sixers and Devils executives -- including GM Elton Brand -- did agree to the 20% salary reductions.