Nobody knows what happens next with the NBA season. Maybe it starts back up again not long after the current 30-day suspension; maybe it goes on much longer.
And maybe the entire season and playoffs are canceled.
If that worst-case scenario plays out, it’s going to hit the NBA hard financially, in a season it’s already taken a several hundred million dollar hit from the controversy with China back during the preseason.
How big a hit? Maybe half a billion dollars. NBC’s own Tom Haberstroh did some back-of-the-envelope math on just how much gate revenue alone the NBA could lose if there are no more games.As a rule of thumb, the source said, the NBA makes an average of $1.2 million in gate revenue per regular season game and $2 million for each playoff game. With 259 of 1,230 regular season games remaining, that means roughly $300 million of ticket revenue lost if fans couldn’t purchase tickets. Over the past decade, on average, there have been 83 playoff games in each postseason, which would lead to another loss of about $166 million.
That’s nearly $500 million in estimated lost ticket revenue if the NBA doesn’t allow fans to attend the full slate of games.
Gate revenue varies widely from arena to arena. There are some smaller markets where the gate revenue number is closer to $500,000 a game (or lower some nights), while the Warriors are estimated to make $3.5 million a game or more in the new Chase Center.
Haberstroh’s numbers are just gate revenue, it does not include money from sales of jerseys, foam fingers, and other team merchandise. It does not get into money the arena makes on sales of beer and roast beef sandwiches (some of which can kick back to the league).
We haven’t even touched on broadcast rights and making ESPN/ABC, TNT, and a host of regional sports networks whole after lost games.
All of this would trickle down to the players. There is a provision in the CBA that would allow the league to withhold a portion of a players’ salary due to the extraordinary circumstances surrounding the epidemic and games missed. However, the union would undoubtedly fight that. So far, nobody has had that discussion, but the NBA players union sent a letter to the players warning them that clause does exist and the topic could come up.
The other way players would feel the pinch is a decrease in the salary cap — there might be a lot less money for teams to spend next offseason if revenues take a serious dip. The league has already reduced the projected salary cap for next season in the wake of the China situation, a loss of games likely makes that worse.
None of that should be first or foremost on the minds of league officials or players right now. What matters now is getting healthy, taking steps to reduce the spread of the disease, and helping out the part-time hourly workers around the league hurt by the loss of games and without a safety net to catch them.
But this is going to cost the league and the players money, too.