While the NBA is losing money as the NBA season remains suspended, the loss will be much more if the league cancels the 2019-20 season. As the organization is looking at various ways to resume the season, they have to also consider the financial consequences if the games are cancelled. As per recent reports, the league can lose around $900 million NBA TV revenue if the season is cancelled.
According to recent reports, cancelling the NBA playoffs will cost the league $900 million. However, this calculation does not include TV revenues that will be lost if the league cancels the remaining regular-season games. Regional sports networks are mostly owed at least 70 games in their deals with the NBA. Most teams have played around 60 games when the season was suspended.
Even if the NBA decides to complete their regular-season games, they will lose maximum of their revenues due to fans not attending the game. According to a recent analysis, 40% of the total NBA revenues is from ticket sales. Without fans attending games, most of the review comes from the games being televised. This is why resuming the season is extremely important for the league for a financial standpoint. Earlier reports have also hinted that if the league is cancelled, the effects of the losses will be faced by the following few seasons.
To soften the financial blow, the salaries of NBA players and officials have already been cut. Players with larger contracts like LeBron James and Steph Curry can reportedly owe the league $420,000. Despite the using methods like escrow withholdings and reclaiming money via the Force Majeure clause, the Collective Bargaining Agreement (CBA) will not be able to cover the lost revenues caused by the suspension. Various reports have suggested long-term methods like lowering salary cap to deal with the loss.
Recent reports have confirmed that the league will be lowering the NBA salary cap, which could affect free agents and luxury tax. While no official statement has been made, NBA commissioner Adam Silver will reportedly make a decision in 2-4 weeks.