MUST SEE: Coronavirus Set To Cost NBA At Least $773 million
March. 12, 2020
The 19-20 NBA season is currently in disarray after thursday’s announcement that all games have been suspended indefinitely following Utah Jazz player Rudy Gobert contracting the coronavirus.
NBA is undecided when teams will return to action, with the 19/20 season originally scheduled to finish on April 16, with the playoffs to get underway three days later. Most teams have already played between 64 and 66 games of the scheduled 82.
Players and staff who have been in contact with Gobert are likely to be quarantined for at least 14 days because of his confirmed case but that is not all that is at stake.
The NBA salary structure will no doubt be greatly affected by any suspension of games, because the final number depends on the Basketball-Related Income (BRI) of the previous season. That number is now guaranteed to plummet.
The Athletic reported that NBA teams earn just under $US2 million for each home game, though it depends on the market. For example Golden State earns over $US3 million a game, while smaller teams like Memphis or New Orleans would earn closer to $US1 million.
That would mean if the remainder of the NBA regular season is cancelled, the league stands to lose over $US500 million.
“Because BRI is roughly split with the players and then is cut 30 ways to produce a cap number, playing the rest of the season in front of empty crowds could theoretically drop next year’s cap by $8M,” The Athletic’s John Hollinger and Danny Leroux wrote.
This is a significant blow. According to Spotrac, the current NBA salary cap is $US109 million with a luxury tax threshold of $US132.6 million - the absolute maximum teams can get to. The 2020-21 salary cap is set to be $US115 million, with a luxury tax threshold of $US139 million.
Therefore if no other regular season games are played, the cap number will fall next year. If playoff games are impacted - which gain much more revenue than regular season games due to higher ticket prices - it could drop even further.
This could mean teams have to cut or trade players in order to dump salary and fit under the cap next season.
“Our best guess is that a significant drop in gate revenue and related income for the 2019-20 season will produce both a lower 2020-21 salary cap than previously projected and some genuine public frustrations between the owners and players because of the unusual circumstances,” Hollinger and Leroux wrote.