NJ Devils, 76ers owners reverse course on salary reduction amid coronavirus shutdown

Just 24 hours after a controversial 20 percent pay cut for New Jersey Devils and Philadelphia 76ers employees was reported, the company that owns the two teams, Harris Blitzer Sports and Entertainment, has reversed course. 

Salaried employees above $50,000, those previously subjected to a pay reduction, will make their full salaries, while the NHL and NBA are on hiatus due to the COVID-19 pandemic, owner and founder of HBSE Josh Harris announced Tuesday afternoon. 

“Our commitment has been to do our best to keep all of our employees working through this very difficult situation. As part of an effort to do that we asked salaried employees to take a temporary 20 percent pay cut while preserving everyone’s full benefits -- and keeping our 1500 hourly workers paid throughout the regular season,” 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."

Marc Stein of the New York Times first reported the salary reduction Monday night. Devils’ team president Jake Reynolds was taking a hit to his pay, as were Philadelphia general manager Elton Brand and team president Chris Heck and HBSE CEO Scott O’Neil. 

“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," O’Neil said in a statement issued Monday night. "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.”

O’Neil and HBSE also pledged community assistance in the three cities where the teams have operations.

"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,” O’Neil said. "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.” 

However, O’Neil’s statement did little to quiet the public outcry. Harris and his partner David Blitzer took an enormous publicity hit Monday night and it continued into Tuesday morning, with Harris’ name and his net worth trending on Twitter. 

Harris is worth an estimated $3.8 billion while Blitzer is worth $1.3 billion. Michael Rubin, a minority partner, is worth $2.9 billion. 

The move was an attempt to avoid layoffs. HBSE owns the Devils, 76ers and the Prudential Center, where all events have been postponed through March. Several teams and arenas are losing revenue without games, concerts and corporate events and HBSE was not the only group weighing some drastic measures. 

The NHL is temporarily reducing the pay of league office employees by 25 percent, beginning April 1. The intent with the league was the same as it was with HBSE — to avoid layoffs.

The Montreal Canadiens chose the layoff route. Groupe CH announced a temporary 60 percent staff reduction Tuesday afternoon with a $6 million assistance fund to aid those who were affected. Employees will receive 80 percent of their base salary and benefits for eight weeks, starting March 30. 

The NBA suspended operations March 11 and the NHL followed one day later. It’s unclear what these next few months will bring for sports but for now, HBSE employees can breathe a little easier. 

“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,” Harris said. “To our staff and fans, I apologize for getting this wrong.”

Abbey Mastracco is the Devils beat writer for NorthJersey.com. For unlimited access to all Devils analysis, news, trades and more, please subscribe today and download our app. 

Email: mastraccoa@northjersey.com Twitter: @abbeymastracco