Report: NBA giving teams $30 million each to help with 2020-21 finances
Like most businesses across the nation, NBA teams have been hit hard by the coronavirus pandemic.
Unlike most businesses — particularly small ones — the NBA has access to capital to help get through this.The NBA is giving each team $30 million to help with finances for this season, a story broken by John Lombardo of the Sports Business Journal.
The $900 million to be given to teams comes from notes issued by the league in the private placement market that typically includes large insurance companies and other institutional investors.
According to multiple sources, each team is expected to receive the $30 million this month as the NBA heads toward its Dec. 22 tipoff of the 2020-21 season. Teams can spend the money for any need within their organization, with the league paying back the notes from “general collective league sources,” according to one source with knowledge of the structure.
That the NBA was able to secure $900 million shows the financial strength of the league — the private placement market isn’t giving the NBA this money out of the generosity of its heart. Those businesses expect to get paid back, with interest.
It’s also a good way to help teams through a tough time when revenues are down. The league tips-off on Dec. 22 in a season with a short turnaround — and games on Christmas Day — because it is what the national television partners wanted. There will be few to no fans in NBA arenas to start the season, and NBA Commissioner Adam Silver said that accounts for 40% of league revenue. The NBA missed its revenue projections by $1.5 billion last season, and that number is likely higher this season.
Owners knew they were going to take a financial hit this season, the hope is to get through it and get back on the league’s traditional schedule — hopefully with arenas full of fans — next October.
Until then, the league got a little float of cash to help get through the tough times.